After initially saying that he would operate within the limits prescribed by the campaign financing rules, Barack Obama turned around and went on to raise 600 million dollars. John McCain, on the other hand, seeing as how he was one of the principal authors of the public campaign financing rules, has stuck to his guns and has been trying to make do with a little over 84 million dollars.
However you slice it, that is a huge disparity. And Obama – not to mention the American public in general – has no qualms about pouring that money into his campaign. Tonight (Wednesday, 28 October), Obama will put out a 30-minute primetime ad on CBS, NBC, and Fox. The three, each costing nearly a million dollars, puts Obama’s campaign on track to exceeding the US$188 million George W. Bush spent in 2004. Some say, before Tuesday next week, Obama will have spent close to US$230 million just to get elected President of the United States.
Coming from the Philippines, I cannot even begin to express how mind-boggling these sums are. At current rates, the projected final cost of Obama’s campaign translates to a staggering 11.3 billion pesos. That’s more than we spent on the automation of the 2008 Elections in the Autonomous Region in Muslim Mindanao.
So as you can imagine, the first question that came to mind was: “Don’t you have spending limits?” The answer was quick “it depends.”
On the one hand, there is the system of public funding of presidential elections where public money is given to a candidate to help defray the cost of campaigning. The funds come from a taxpayer check-off (basically the taxpayer checks off a box on his tax form giving his consent to having a portion of his tax money go to public campaigning financing).
The way this works is that the candidate who accepts public financing agrees not to raise money from other sources, thereby effectively limiting the amount of money he can spend to the amount of public financing available. In 2008, that’s approximately US$84 million (the amount of public financing is generally indexed to inflation).
So, while there is no direct limit on spending, the amount of public money available – and the pledge not to raise anymore – operates as a spending limit anyway. According to the US Supreme Court, this would not be an infringement of the right of speech because the limitation is voluntary. A candidate, after all, can choose not to receive public money, and therefore not be subject to spending limits.
Self Funded Campaigns
Candidates who refuse to accept public funding needed to raise their own money. As the Supreme Court pointed out, this removes all limitations on spending and the sky literally becomes the limit. Ross Perot did it in 1992, and now Barack Obama is doing it in 2008.
Under a self-finded campaign, the candidate is responsible for raising money through donations. However, while the money can be spent without limit, the amount of money that can be donated is subject to regulation.
Individuals can contribute up to US$2,300 to a presidential candidate during the primary election campaign. If the candidate is nominated and refuses to accept public financing (as Obama did), individuals can contribute another US$2,300. Corporations can’t donate money to a campaign either.
However, there are numerous ways of getting around these restrictions. Political action committees (PACs), for instance, can spend practically unlimited amounts in support of a candidate. Certain types of loosely regulated organizations (527s, named after section of the Internal Revenue Code that governs them) are allowed to raise money, technically for advocacies and not for campaigns – although in reality the distinction is practically non-existent. So, it’d be fair to say that even if 527s were raising money ostensibly for advocacies, the money can also find its way eventually to a candidate’s campaign. And then there are other organizations even more loosely regulated than 527s that can make donations towards parties’ national conventions and inaugurations. Under Federal Election Commission regulations, donations for national conventions and inaugurations are not considered donations to parties. So again, the money – while given for another purpose – still ultimately benefits a candidate’s campaign.
The reason campaign spending isn’t regulated in the States is that they consider spending money a form of free speech. If you limit how much a person can spend, you are basically limiting the free expression of his will.
We can argue – as we do in the Philippines – that there is public interest in limiting the cost of elections. We say we want to ensure a level-playing field where the candidate with less money would not be overwhelmed by the candidate with more money. In other words, the theory is that government should step in to protect the chances of the smaller guy.
Here, the ‘chances of the smaller guy’ are not as crucial to public interest as the protection of the individual’s right to express himself freely. This keys in to one of the core values of Americans – individualism. So, while small candidates are not entirely left to sink or swim on their own – precisely because the system provides for public financing – those who can are also given the opportunity to make sure that the money they have is commensurate to the effort they put in to get it.
Testing the limits
Still, with Obama’s campaign breaking all sorts of spending records, there are many who are disturbed. Owing perhaps to the current financial crisis, some people have expressed reservations about the propriety of spending so much on a campaign.
The limits of the freedom accorded to self-funded campaigns is definitely being tested by Obama. His spending is raising the question of the exact nature of the influence money has on elections, and whether fundamental principles of fairplay are not being somehow affronted. Certainly, Obama’s spending spree has reinforced the perception that elected positions can be effectively ‘bought.’
Will this result in the further evolution of the public campaign financing system? Likely. Among other things, the amount of money that can be spent under that system is widely viewed as insufficient. So the system might see some adjustment in terms of spending limits being raised. Another change might be in the introduction of a requirement that free air time be given to candidates. Free airtime means the candidates get to spend their money on other things, effectively ‘increasing’ the money they have. I should mention that our own Fair Elections Act already provides for free air time for candidates, so it would be interesting to see how this develops in the States.