The $200 Campaign Finance Fix

· Provide realistic spending limits. Presidential candidates stopped using the public financing system when the spending limits failed to reflect the costs of a modern campaign. Realistic spending limits remain important, however, to prevent arms-race fundraising and to constrain the role of bundlers and influence-money in presidential elections.

The spending limits in the current system should be increased for the primary and general elections from current levels -- $50 million and $84 million, respectively -- to $250 million per election. This should be accompanied by an exemption from the spending limits for aggregate contributions of $200 or less per donor to further increase the importance of small donors and to provide candidates with greater flexibility to meet the costs of their campaigns.

· Reduce the individual contribution limit. A presidential candidate who participates in the primary system should have to abide by a lower contribution limit than the existing maximum, $2,300 per individual, to take effect once the candidate has raised a threshold amount of seed money to get started. Under this approach, the relative importance of $200 contributions would be further increased, and the importance of bundlers further reduced.

· Close the loophole for joint fundraising committees. This year, both major-party presidential nominees used candidate and party joint fundraising committees to skirt the limits on contributions to candidates. John McCain solicited contributions of as much as $70,000 per individual and Obama of as much as $30,800 per individual for these committees; they raised $177 million and $172 million, respectively, according to Public Citizen.

To donors, limited by law to giving $2,300 per candidate per election, contributions to joint committees are equivalent to making the much larger contribution directly to candidates. To end this circumvention, candidates should be prohibited from setting up joint candidate-party fundraising committees.

Public financing is an optional system, and one we need to improve. Presidential candidates ought to have the choice of running competitive campaigns based on small contributions and public funds rather than having to rely on bundlers, special interests and larger contributions.

The writer is president of Democracy 21, a nonpartisan public policy organization. This column is the second in an occasional series on policy issues facing the Obama administration.