A Public Funding System in Jeopardy: Lessons from the Presidential Nomination Contest of 2004

The Bipartisan Campaign Reform Act (BCRA) did little directly to change the presidential campaign finance system in place since 1974. However, BCRA did increase the maximum individual contribution from $1,000 to $2,000. Because the new law increased the value of large contributions, while being silent about the public matching fund formula that is supposed to increase worth of small ones, the general expectation was that BCRA, through a back door, had affected the presidential system substantially. Since George W. Bush had rejected public financing for the 2000 primaries— raising a record number of $1,000 contributions in the process—it was widely predicted that Bush in 2004 would reject public funding again and persuade his former $1,000 donors to increase their contributions (Wilcox et al. 2003). This in turn would put severe strains on any Democrat who stayed in the system. The general expectation therefore was that one or more Democrats would also be likely to opt out of the system (Campaign Finance Institute Task Force on Financing Presidential Nominations 2003). As it happened, Bush, John Kerry, and Howard Dean all did opt out of public funding, with Bush and Kerry eventually raising and spending more than five times as much as they would have been allowed to spend had they accepted matching funds. However, Bush’s money did not come from simply the same old donors. Most of his, and Kerry’s, donors were new. The major policy question about presidential finance to emerge from 2004 was whether the public matching fund system still served a useful purpose. With