Clinton Bid Heralds Demise of Public Financing

A Clinton campaign official, defending her decision to opt out of all public financing, said the escalating cost of campaigns makes it difficult to stay within the current limits. "These dramatic increases make it clear that the current public financing system is in need of an update," said campaign spokesman Phil Singer, "and Senator Clinton would support modernizing it."

Among the presidential candidates, McCain has long championed the importance of campaign finance laws. Yesterday, his spokesman, Danny Diaz, said the senator thinks the current public finance system "is not fulfilling its original goal" and is also contemplating opting out.

The Watergate scandal helped produce a new system for financing campaigns, one that established limits on individual contributions to presidential candidates and disclosure requirements for campaigns to provide greater transparency about how money is raised and spent.

That system provided a carrot and stick for candidates designed to limit spending. For the primary season, the federal government agreed to match the first $250 of any individual contribution. In return, candidates agree to abide by strict state-by-state and overall spending limits during their nomination campaigns.

The system began to break down in 2000, when Bush decided to give up federal matching funds during his campaign for the nomination. That allowed him to raise and spend as much money as he could to win the nomination -- putting his rivals at a distinct disadvantage. He raised almost $100 million, breaking all previous records.

In 2004, Democrats John F. Kerry and Howard Dean joined Bush in opting out of public financing for the primaries. Bush and Kerry, the two nominees, both swamped Bush's 2000 campaign spending record. Kerry raised almost $235 million, Bush $270 million.

Both, however, chose to accept more than $80 million in public funds for their general election campaigns, though Kerry gave serious consideration to opting out. Few experts believe that either nominee will remain within the public financing system in 2008.

The system has broken down for several reasons, including the growing length of campaigns and escalating costs, especially for television advertising.

Public financing for the general election was designed to create a level playing field for the two nominees and relieve candidates of the need to raise money during the final months of the campaign. But candidates still see imbalances that can favor the party that holds the later convention, and the costs of both television and state-by-state organizations have strained what seem like generous allotments from the federal government.

Under new threshold limits adopted yesterday, individuals will be able to contribute up to $2,300 to a presidential candidate for the primaries and up to $2,300 for the general election. The limits are similar to those governing candidates for the House and Senate, but there is no public financing component for congressional candidates.

Clinton now will be raising money simultaneously for the presidential primaries and a possible general election campaign. Under federal rules, money for the general election cannot be spent until the candidate secures the nomination. If the candidate fails to win the nomination, the money must be returned.

Her campaign has another wrinkle in its fundraising plan. Like others before her, Clinton will have a group of big-time fundraisers tap their networks to help assemble hundreds of thousands of dollars for the campaign. But she also is recruiting what the campaign calls "Hillraisers."

Supporters can set up accounts on their Web sites and encourage friends to contribute to Clinton's campaign. Those contributions will be credited to the Hillraiser's account, and the campaign Web site will maintain a running total of how much each person produces.

Washingtonpost.com staff writer Chris Cillizza contributed to this report.