Dean Skipping Public Financing

Howard Dean announces to his supporters that he will forego public financing for his primary campaign.
CBS
In a historic move, Democratic presidential hopeful Howard Dean said Saturday he will skip public financing and the spending limits that come with it, hoping his money-raising power can help win the nomination and unseat President Bush.

"We have supported public financing but the unabashed actions of this president to undercut our Democratic process with floods of special interest money have forced us to abandon a broken system," Dean said at a news conference.

The 2004 race is the first time that candidates from both major parties will forgo the Watergate-era public financing system. Mr. Bush also is opting out, as he did in the 2000 Republican primaries and raised a record $100-plus million.

Dean made his decision based on a high-tech tally of 600,000 supporters, whom he asked to vote by e-mail, Internet, telephone or regular mail through Friday.

The former Vermont governor said 85 percent of those who weighed in — 105,000, according to campaign officials — urged him to opt out. He becomes the first candidate in Democratic Party history to take such a step.

CBS News Reporter Eric Salzman observes that Dean's supporters do indeed appear enthusiastic about Dean's move. In the past 48 hours, Dean said, the campaign has received over $5 million in pledges for new contributions and the campaign Web site has been extremely active since the announcement.

Campaign manager Joe Trippi insisted to Salzman that his team would have abided by the supporters' vote had it gone the other way.

"The whole finance staff was told that if people voted to opt in, they were going home," he said in reference to the fact that the Dean campaign would not have had any use for more fundraising if it took matching funds, because the campaign had already reached the maximum.

Trippi, a key player in Walter Mondale's Presidential bid, all but disappeared from the political scene during the 1990s because of the role money was playing in politics. "It's actually the reason I kind of phased out," he told Salzman. "I started to think the thing was so messed up you couldn't make a difference any more."

But now Trippi is as enthusiastic as anyone about the money pouring into the Dean campaign. He stopped short of saying money is the most important thing in a campaign, but said that "when a guy is spending $200 million against you the way George Bush and Karl Rove will be, (money is) pretty important for any Democrat who intends to compete."

At least two Democratic rivals — Massachusetts Sen. John Kerry and retired Gen. Wesley Clark — also have been considering opting out.

Like Mr. Bush in his primaries, Dean now can spend unlimited amounts on his campaign for the nomination and, if successful, through the summer before the general election season starts.

Candidates who accept public dollars in the primaries can get up to $18.7 million in taxpayer money but are limited to about $45 million in spending.

A campaign official said Dean has no plans to limit his spending through the primaries to that threshold, as some campaign finance watchdogs have urged.

Dean was the first 2004 hopeful to qualify for the government money. He told The Associated Press last March that he was committed to taking it, in part because he believed in campaign finance reform.

He began to rethink that plan over the summer after his campaign saw an unprecedented flood of contributions over the Internet.

In the latest three months of fund raising, through September, Dean raised nearly $5 million over his Web site in just over a week, astounding his rivals with a record $14.8 million for the time period.

Democratic National Committee Chairman Terry McAuliffe has urged his party's candidates to seriously consider turning away the government money, arguing that Bush removed it as a campaign issue when he did so in 2000 with no public outcry.

McAuliffe and other Democratic strategists have worried that public financing's strict spending limit would leave their nominee low on cash after several bruising primaries. Bush, facing no GOP opponent, would have tens of millions left to spend next spring and summer. Bush already is closing in on $100 million since starting to raise money in May.

The new campaign finance law also doubled the individual contribution limit to $2,000. That makes the government match of up to $250 for each donation less attractive.

The program was created after Watergate to try to try to reduce presidential candidates' reliance on big donors. Congress has done little to it since, and even the system's supporters say it has failed to keep pace with the cost of campaigns.

The system is financed by taxpayers who check a box on their tax returns to direct $3 to the program. Though marking the box doesn't increase their tax bills, only about one in 11 taxpayers do so, leaving the program short on cash when candidates get their first payments in January of the election year.

Dean's decision to opt out is not without risk.

Some politicians have criticized his change in position as a flip-flop.

"Three months ago, Governor Dean was saying what a Democratic principle it is to have campaign finance reform and what a big issue it would be if someone stepped outside," Kerry said Saturday in Concord, N.H.

"That's when he wasn't raising a lot of money. Now, Mr. Change-Your-Opinion-for-Expediency is saying, 'Oh, I'm now able to raise money. Maybe we should get out of the system.' I think somewhere along the line, fundamental principles are important," Kerry said.

Dean, with about $25 million raised through September, will need a continued flood of contributions to make up for the $18.9 million in government money he's turning away.

No major-party candidate has ever skipped public financing in the general election, in part because that money covers a much shorter period. The nominees selected at the Democratic and GOP conventions next summer will each be eligible for about $74 million in full government dollars for the Nov. 2 election.