More Supply, More Demand: The Changing Nature of Campaign Financing for Presidential Primary Candidates

Abstract

Financing a presidential party nomination campaign has been a complicated affair for some time: candidates face contribution limits, source limitations, extensive reporting requirements, and, for those candidates opting into the voluntary public financing program, a strict spending limit. Moreover, the campaign financing system is not only complex but dynamic. The system recently has undergone two fundamental changes: (1) the voluntary public financing system, with its accompanying strict spending limit, is no longer an option for serious presidential candidates, who would be grossly outspent by nonparticipating rivals; and (2), the campaigns have come to rely ever more upon campaign finance bundlers, who collect maximum contributions (currently set at $2,300) from friends and associates, and upon "micro-donors," who give less than $200 in the aggregate to a primary campaign. These changes arose because of the changing legal rules governing money in presidential elections and a dramatic lowering of the costs of campaigning facilitated by the Internet. They may alter both the nature of presidential campaigns as well as the types of candidates who are viable to become general election candidates.

This paper has three parts. First, it describes the two recently-emerging fundamental changes in the campaign financing system for presidential primary candidates. Second, it explains why these changes have emerged now. Finally, it evaluates whether these changes are likely to be positive or negative from the standpoint of political equality and in terms of the quality and type of presidential candidates who win their parties' nominations.