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June 19th, 2008
09:16 PM ET

Obama and The Small Donor Effect

Michael Waldman
Executive Director, Brennan Center for Justice, NYU School of Law
Author of A Return to Common Sense

Barack Obama's decision to opt out of public funding for the general election is not a surprise. It was so well telegraphed, he should take out a patent.

The presidential public funding system worked well for three decades after it was enacted in the early 1970s. It leveled the playing field, boosted competition and reduced corruption. Think of it this way: in the first five elections under presidential public funding, a challenger beat an incumbent president three times. There's no congressional district in America with that much competition!

But the presidential system needs repair. Principally, candidates simply don't get enough money to mount a fully strong race in a modern election. The amount, when it was set, was about two thirds of the amount spent by the McGovern campaign of 1972 - in other words, two thirds of the least successful presidential campaign in modern history!

One reason Obama spurned public funds is that he has reaped an unprecedented flood of small donor contributions, given largely over the Internet. But in Congress, candidates are still raising funds the old fashioned way: just 10 percent of contributions are from "small donors." The small donor revolution is just a rumor on Capitol Hill, where few candidates have Obama's charisma. Why not improve the public funding plan by letting candidates raise more money from small contributions? That will push candidates to spend time on grassroots organizing - another boost for participation.

Obama is running on "change," and McCain on "reform." There's a rare moment when both parties are competing to tell voters what they will do to boost democracy and fix the system. It's up to us voters to make the most of it. The real question is not what the candidates do in 2008. What we should ask is: what are you going to do in 2009?


Filed under: Barack Obama • Raw Politics
soundoff (22 Responses)
  1. Sandee

    This was/is the right decision for Sen. Obama. McCain nor anyone else should be able to dictate how his campaign finances are handled as long as he is not doing anything illegal. I do not understand why McCain or his supporters are so up-set about Obama changing his mind about funding. He has every right to do so if it is for the betterment of his financial standing during this tough and ungracious campaign. In regards to not trusting Obama, go on to his website and listen when he speaks. He has done nothing but make an attempt to open up about his history. Those of you who have not heard him was not listening. Sen. Obama has ran a very respectful campaign and many non supporters have found every reason not to give him the benefit of the doubt. It is time for the USA to come together as a nation. We are all humans and should be treated with as such unless given a reason not to and Sen Obama has not done so. He is a very passionate and dedicated individual. When given the opportunity he will be a wonderful president.

    June 20, 2008 at 8:43 am |
  2. Shana

    It seems that the majority of posts are negative and are against Senator Obama. Let's play equal why don't we. I have a comment that is in moderation from last night. The country is hurting and perhaps the legislature can come behind Obama and use that money to pay down the cost of fuel, help pay for extended unemployment benefits, go into the social security system or go toward some "green" change or research. I agree with Senator Obama. He has not failed anyone. He is honorable and he is spearheading the best kind of change. My kids, family and neighbors love you Obama.

    June 20, 2008 at 8:13 am |
  3. janet rigg

    obama should not take public funding

    June 20, 2008 at 5:58 am |
  4. kirisipeni

    If McCain was raising more money than Obama he would have done the the same thing as Obama. Welcome to politics 101.

    June 20, 2008 at 3:05 am |
  5. Tara

    Keith ,
    Are you really so naive as to believe that small donations make up the bulk of money raised for the Obama campaign.
    Is there a public record of these payments and if not , somebody should follow the paper trail.
    Anyway , one way or the other , these amounts of money are obscene .
    Think of the many needy causes , a fraction of that money would offer great relief.

    June 20, 2008 at 1:38 am |
  6. gary hern

    Anderson, It is amazing that Obama's camp is raising soo much money. Then I started tinking is some of this money what would
    have gone to donations for catastrophic relief? Will the tax rebate
    sent to give reliev to off-set higher fuel prices or a needed vacation
    being sent to support Obama? The issue of not needing campaign
    support is refreshing and welcomed. The McCain camp is surviving
    on one third the money that the Obama camp is raising and spending.
    The pros and cons just keep adding up as fast as a sunday cake bake
    sale by the ladies club. What does move the economy, donations or
    businesses fueled by that other cake, oil!

    June 20, 2008 at 1:32 am |
  7. Drew

    Obama is right the "public financing" system is broken and McCain and the RNC (which buy the way raised twice as much funds as the DNC) will use tricks to spend more money than the allowed 85 million with 527 groups like Karl Roves' "Freedom's Watch" that can spend an unlimited amount of millions of dollar to attack and defeat Obama it would of been stupid of him to accept an offer with so many loop holes that the republicans will gladly exploit
    Also I don't believe its right to use tax payer money on campaigns instead it should be the people who want that candidate to win who finance them thats true public financing

    June 20, 2008 at 1:32 am |
  8. William Joseph Miller

    As one of Obama's small donors, I really wish there was a better way to fund candidates, but in the real world, the Republican party enjoys a multi-billion dollar advantage with PAC's and 527's – not to mention the media, including CNN, which are largely puppets of wealthy corporations. (Consider the way the media sold out before the Iraqi war by embedding so-called "experts" hand-picked by the Pentagon to lie to the public.)

    The real world is simple. Rich people are not nice people. Republicans are not nice people. Corporations are not nice people. And the talking heads on CNN who are making money hand and foot from the Iraqi war are not nice people. Even the public information commericals put out by the nuclear industry and oil industry are full of lies and misrepresentations.

    Right now, the carbon dioxide level of this planet is about 382 parts per million. It's going up 2 parts per million each year. When it reaches 450 parts per million, human life will perish. The threat from methane is even worse. The survival of this planet is at stake. McCain simply does not understand these states. For the sake of the planet,. we need a change we can believe in – a change Obama can bring –
    And that's the reason, the only reason, I'll keep saving my nickels and dimes to help get Obama, as well as a Democratic team, elected.

    June 20, 2008 at 1:14 am |
  9. GiaM

    Would John McCain take public funding if he raised the amount of
    money that Obama has raised?

    June 20, 2008 at 1:12 am |
  10. Michele, Oregon

    In theory I used to agree with public financing seeing it as a kind of leveling the playing field, but with further review, the lesser known candidate out there needs more campaign cash to fight the institutional candidate. Why wouldn't Obama keep the grassroots efforts to elect him going when it benefits the people, his campaign, and takes less from the government.

    And there is truth that the FEC is dysfunctional because they have not had enough members to make a quarum. McCain has benefitted by this in that allegations that his campaign broke the rules have sat in limbo due to this. A little bit of the pot calling the kettle black.

    June 20, 2008 at 1:03 am |
  11. Anita

    It really does not matter. Those that are for Obama are not going to care if he changed his mind. And those that don't like him will see only the negative in him anyway.
    In reality McCain can not rise as much money as Obama and they are pissed about it. Obama’s campaign has been very creative and out smarting its opponent in ways that others cannot conceive.
    This is the kind of thinking we need, somebody that thinks outside the box. Somebody that does things outside the normal. Somebody with FRESH NEW IDEAS I think it is GREAT!
    He is making history again, being the only candidate to not use public funds in the usual way.

    June 20, 2008 at 12:38 am |
  12. Gecko-San

    You guys are naive if you think that not every politician is corrupt. John Mckain is no exception. Mr. Obama is little more open about how he will do things he told us about it when it doesn't really even matter. WHAT MATTER PEOPLE ARE THE ISSUES and if extra money coming from his supporters allows us to hear them let them be heard loud and clear so people with a real mind and no party can vote for the best not the person that looks best on the blue or red side. Real Americans care about how the presidents view on things work its not like we are getting married to them. I want to know if gay is going to reach 6.00$ and I want to know if supermarket prices will go down I am a voter of issues not morality because then neither of these men would be elected do not forget yesterday john McCain broke his promise that he would be different then both on the environment. I don't care when politicians get their dirty money. I just want my everyday dollar of a struggling person working 40 hours a week to go further. I spent 285$ for 3 people when I went grocery shopping all I bought was for a food bin in my room and enough drinks for a mini fridge.

    Gecko-San – VA

    June 20, 2008 at 12:33 am |
  13. Angry Man

    I’ve been wondering about O’bama’s big money. Why doesn’t anyone talk about all the Republican money that has flooded into the O’bama campaign? The only Democratic name that flushes the color from a Republican’s face is Clinton. They wanted McCain to run against a specific Democratic candidate in the worst way and have gotten exactly what they wanted. Talk about it, don’t ignore it.

    June 19, 2008 at 11:41 pm |
  14. Pamela

    I would like to see better disclosure regarding Obama's fund-raising. Specifically, each report seems to trumpet the "small donor" effect, when, in fact, half of the Obama campaign war chest has come from the fund-raising efforts of large, wealthy, corporately-connected "bundlers." Hillary Clinton was excoriated for the same technique. Why does Obama get a pass on this?

    Obama may, indeed, be a political breath of fresh air as he is characterized by most media outlets. Or he may be a hollow suit, created by media hype and omission. But can an Obama presidency be sustained purely by public relations? Sooner or later, there has to be an accounting for results, not just beautiful rhetoric.

    June 19, 2008 at 11:18 pm |
  15. bk

    This would have put Obama and McCain on even $$ and Obama doesn't want to play fair. Just like how he won the election in Chicago and the primary not wanting a revote. I don't trust Obama and will not vote for him.

    June 19, 2008 at 11:08 pm |
  16. Marla OK

    To say all his donors were individuals with small donations is a distortion fo the truth. He has received millions and millions from large and smal corporations as well as special interest groups or people. And he is a flip-flopper about taking/not taking public funding. So many lies and distortions from the Obama camp. SAD.

    June 19, 2008 at 10:47 pm |
  17. tan

    Thanks senator BO for this decision. We are in to win. Life is all about choice! Fire up and ready to go!

    June 19, 2008 at 10:47 pm |
  18. Keith

    Another way of pushing change by opting out of public funding was a good move. His method of raising money through small donations and getting people to believe that change is truly possible have proved productive thus far. McCain was so quick to retailiate by insinuating that Obama says one thing a mean other. Does he quickly discussing his decision to NOW support offshore drilling?

    June 19, 2008 at 10:39 pm |
  19. Franky

    This is crazy!!! I gotta say, some serious cash is gonna be flowing....

    June 19, 2008 at 10:22 pm |
  20. Greg Erie PA

    Suprise! Obama changes his mind about something and then accuses someone else did it first. WAKE UP AMERICA! You can't trust this man to do the right thing.

    June 19, 2008 at 10:12 pm |
  21. Susan - North Haven, CT

    The real question is not what the candidates do in 2008.
    What we should ask is: what are you going to do in 2009?

    AMEN!!! Finally SOMEONE is putting this issue "out there". Thanks Michael.

    And not only WHAT?... but HOW? I have heard nothing of substance from Obama where he explains HOW he is going to execute all of his inspirational, hopeful agendas INTO REALITY.

    I'm a Democrat. But I can't vote for him.

    As for the $$ issue? Obama has Oprah. Need I say more?

    June 19, 2008 at 9:53 pm |
  22. Cindy

    I think that all of the elections should be paid for by the government. Yes they need to revamp it to allow for more money to be given to each candidate but at least they'd be on an even playing field. The way that it is now the one with more money has a much better shot at winning. And they can and often are given money for favors.

    If they both are running on change and reform then it looks like this would be a great first step at proving it! It's a shame that Obama can't step up to the plate...so is he all talk and no do for real!?

    Cindy...Ga.

    June 19, 2008 at 9:29 pm |