Michael Bloomberg's flirtation with the presidency dramatizes the breakdown of our campaign-finance system. His third-party threat is only realistic because he is able to spend a billion dollars of his own money. Even if this isn't enough to get him to the White House, it might well shift the balance between the candidates of the major parties, turning 2008 into a parody of 2000, with Plutocrat Bloomberg playing the destabilizing role of Citizen Nader.
The Supreme Court says that Bloomberg has a constitutional right to spend unlimited money out of his own pocket, but there is a perfectly practical reform that would allow ordinary citizens to strike back. Give every voter a special credit card account containing $25 that they can spend at any time during presidential election campaigns. Voters could use these cards at local ATMs whenever they liked to send their "Patriot Dollars" to the candidate they favor for president.
If 2008 is like 2004, about 120 million Americans will go to the polls. If they could also go to their ATMs, they would contribute $3 billion in federal funds to qualifying candidates. Bloomberg would be free to compete for these funds if he agreed to keep his personal spending to a modest amount within the range of mere mortals—say, $50,000, a limit already upheld by the Supreme Court. But if the New York City mayor insisted on spending his own billions, he could be constitutionally barred from the patriot market—leaving his rivals free to campaign for the financial support of their fellow citizens. Whichever option Bloomberg chose, he could not crush ordinary candidates with his overwhelming wealth. Indeed, the very existence of Patriot Dollars will force plutocrats to think twice before trying to buy their way to the presidency.
A citizens' fund for campaign contributions would also democratize money-raising for primary elections, which at present gives too much power to a small number of big givers. Even though the latest Gallup poll shows John McCain to be the favorite of 18 percent of Republicans, compared to 7 percent for Romney, McCain is on the ropes because he isn't raising enough money to keep up. The betting markets say that Romney is twice as likely to win the nomination. John Edwards' standing is also threatened by his relatively low fund-raising totals; he came up with only $14 million in the first quarter compared to Hillary Clinton's record-breaking $25 million. If the Federal Election Commission reports another disappointing performance at the end of this month, the media might declare Edwards a "second tier" candidate and deprive him of a fair chance to plead his case in Iowa by downgrading his press coverage.
It's not surprising that McCain and Edwards are having a particularly tough time raising money from big givers. McCain's advocacy of campaign reform has never been a favorite among top donors, and Edwards' sharp turn to the left isn't a big crowd-pleaser, either—at least when the crowd consists of the small group of Americans who can deliver $2,300 apiece from a bunch of friends or business associates. Our present money primary doesn't even pretend to be consistent with the one person-one vote principles that govern our democracy—and in the disconnect between poll numbers and contribution levels, we are beginning to see the distorting consequences. With big primaries pushed into February, candidates need money now to compete effectively. The current setup is a standing invitation for big givers to determine the choices that ordinary voters will be allowed to confront at the polls.
Patriot Dollars would mark a decisive advance over the existing system of federal funding initiated in the aftermath of Watergate. Congress then tried to break the domination of big money by offering presidential candidates a federal subsidy if they limited their private fund raising. If, for example, a candidate in this year's primaries restricts fund raising to $40 million, the government will match each $250 private contribution with $250 in federal funds, up to a ceiling of $20 million. While this yields a total budget of $60 million, front-runners have no incentive to accept the deal when they can raise $25 million a quarter. Once a single candidate opts out, competitors must do the same or face a crushing blitz of TV ads. While the Watergate system remains on the books, it is irrelevant in practice. Indeed, the leading candidates have already made it clear that they will also refuse federal money and rely exclusively on private financing in the general election.
Even when it was operational, the old funding scheme pushed ordinary citizens to the sidelines. The Federal Election Commission simply writes each qualifying candidate a fat check. Ordinary citizens play a minor role—they can send a few of their tax dollars to the generic presidential campaign fund by checking an appropriate box on their 1040 on April 15, but they can't choose a particular candidate as a beneficiary. Unsurprisingly, a mere 8 percent of taxpayers have bothered to check the right box in recent years, leaving only $170 million in the federal kitty. This paltry sum is insufficient to fend off a Bloomberg-style attack, even if candidates were inclined to take the federal money.
In contrast, our initiative transforms campaign finance into a vehicle for active citizenship. Voters are invited to send their $25 to the candidate of their choice at the time when it really counts. Since the system puts ordinary citizens at center stage, they will give broad support for a plan that can finally allow them to take control of campaign finance away from big givers. Their Patriot Dollars will overwhelm the $1 billion that the current crop of candidates are expected to raise during this entire campaign cycle (assuming Bloomberg stays out).
Nothing can be done in time for the current campaign for 2008. It's just too late for serious consideration, and Bush would veto such a proposal anyway. But at the very least, the present crop of candidates should be pressed to propose Patriot Dollars for 2012. The plan won't solve all our problems. It would still allow candidates to raise large sums from special interests under the McCain-Feingold rules. But it represents a practical and constitutional response to the increasing dominance of big money. $3 billion is a small price for democratizing presidential politics.