Bullock chooses public financing for his campaign

First up today, Montana Governor Steve Bullock is making a major change to how he pays for his primary campaign. He applied today for public financing. He is so far the only major candidate to make this move, and let’s talk about what that means.

So you know when you do your taxes, how there’s that little checkbox way up at the top where you can send $3 dollars to the Presidential Election Campaign Fund? Let’s talk about where those dollars go and why.

Starting in 1974, back when the checkbox was just one dollar, the money goes into what amounts to a federal bank account. Then that money is used to match donations from individuals to certain kinds of candidates who have opted in. And among that group you’ll find candidates in the primary election for president.

So if a candidate opts into this system, it means that when someone donates to their campaign, that money is matched—it’s doubled—using money from the campaign fund. This match currently goes up to $250 dollars per donor in a primary election. So, as an example, let’s say I give $100 dollars to Bullock now that he has signed up for this system. He gets my $100 dollars, plus another $100 dollars from the federal campaign fund. He just doubled his money. Not bad.

Now before you all turn off this podcast and rush to fill out the paperwork to run in the primary so you can get free money, you do have to raise a lot of money FIRST to demonstrate that you’re a serious candidate. Right now, you need to raise at least $5,000 dollars on your own in each of 20 different states, and then send that info to the Federal Election Commission, or FEC. And then there’s more paperwork.

So what’s the catch? Well, once you opt into this system, you are subject to an overall spending limit on the election. So let’s say Bullock’s campaign really takes off, and he starts getting a ton of donations. He is capped at spending a total of around $60 million dollars on his primary campaign, PLUS there are state-by-state limits on how much he can spend in each area. However, the odds of Bullock hitting that cap are pretty slim. In Q2, he brought in just over $2 million dollars, and I don’t have his Q3 number yet, but it might be similar. If it’s unlikely at that Bullock would ever hit $60 million bucks, he might as well take the public funding, which gives him extra money RIGHT NOW, right before we head into the key stretch before early voting. Now, the other big catch is you cannot take Political Action Committee money if you opt into this system.

Reading here from an article in the Associated Press by Brian Slodysko:

“Top presidential contenders for years fueled their campaigns using the public financing system, which was established to reduce the influence of big donors in the wake of the Watergate scandal. But that’s waned ever since George W. Bush rejected the assistance in 2000. And the trend has become even more pronounced following a series of court rulings and regulatory changes that allowed even more cash to course through elections.
Bullock, who filed legal challenges to reverse those rulings when he was Montana’s attorney general, says his turn to public financing demonstrates that he is “walking the walk” at a time when rejecting big money in politics has become an animating issue for party activists. […]
“As the only candidate for President who is choosing to participate in the public finance process, Governor Bullock is leading with his values and defending our shared belief that our democracy should never be for sale to the highest bidder,” campaign manager Jennifer Ridder says in a memo provided to The Associated Press that outlines his rationale.”

So, in theory, this move should infuse the Bullock campaign with a big pile of money right away. His Q2 money, which was already reported to the FEC, becomes eligible. And so does his Q3 money, whatever that was, which he has to report by October 15th.

In total, that could bring in literally millions of dollars. So, Bullock’s in good shape, right?

Well, there is one big problem. His paperwork goes to the FEC, which would then have to hold a meeting and approve it. And because the FEC currently does not have enough members to achieve a quorum, it cannot meet, and it cannot approve that request.

So, right now, like so many other things in campaign finance, nothing will happen. Bullock will not get the matching money, because the FEC doesn’t have the proper number of people. At least, not right now.

This could easily be fixed by a quick vote in the Senate on the candidate that has already been nominated by the president. Let’s hope that gets cleared up soon.

A trivia note on how that three-dollar checkbox on your tax form works

Let’s go a little deeper on that previous story. So, I have filled out my taxes for many years, and I have seen that little checkbox for the $3 dollars at the top. But what I always assumed was that it ADDED three bucks to my overall federal tax bill. Still, that dollar amount is super low, so for the most part, I check that box.

But here’s an interesting and useful tidbit for your next dinner party, or your next political gathering. If you check that box, you are NOT spending three dollars. What you’re actually doing is saying, hey, federal government, take three of the dollars I was giving you anyway and put those dollars in the presidential election campaign fund RATHER THAN the general fund. You don’t spend any more, you just get to choose where it goes.

And this is pretty notable, because there aren’t a ton of things in our tax life where we get to choose explicitly how we want the federal government to spend our money. At least not directly—it goes through Congress. So, let me quickly read again the text of the checkbox question:

“Do you want $3 [dollars] of your federal tax to go to the Presidential Election Campaign Fund?”

Now that you know that’s not an ADDITIONAL three dollars, that wording actually seems pretty clear. But for those of you, who—like me—weren’t totally clear on that, now you are. So think about that next time you fill out your federal taxes.

Sanders raises $25 million dollars

Next up, Senator Bernie Sanders announced that in Q3 his campaign raised more than $25 million dollars. That is, at least SO FAR, the largest raise in any quarter for any Democratic presidential candidate in this cycle.

We expected a big number, given that he recently announced passing more than one million individual donors. It’s also a nice bump up from his Q1 and Q2, which were each around $18 million dollars. Showing growth is good, and frankly necessary to engage in the early voting that is to come.

Now, here’s a great example of why somebody might NOT take public financing. If you take the existing Sanders numbers and tack on today’s announcement, he’s well above $70 million dollars overall, and he’s still got another quarter this year, and then a little bit of next year before any actual primary voting occurs.

So if his spending had been capped at $60 million dollars, he would be stuck at this point. Now, he might’ve gotten to this point earlier because of the matching, but still, he’d be sitting on money he couldn’t spend. So it really is a better strategy for somebody with that level of reach to go his own way and not take public funding.

Sanders reported that his average donation for the quarter was just $19 dollars, and that 99.9% of his donors can give again. Meaning, they are not up against the maximum dollar amount for donations. Doing a little math there, if we assume one million donors, that means that fewer than one thousand of them have given the maximum legal donation so far. This is really where the Sanders fundraising operation thrives—tons of small donations over time from tons of people.

Buttigieg raises $19 million dollars

And next up, Mayor Pete Buttigieg announced that in Q3, he raised just over $19 million dollars. Now, there are several ways to look at this. One is in the context of his super-mega-blockbuster Q2, in which he led the field with just under $25 million dollars. So, yeah, he’s down from there. But the other way to look at it is that $19 million dollars is a WILD amount of money, especially for somebody who has never held a national political office and who came into this race with essentially no email list or other existing assets. Unlike all the Senators, he didn’t have a giant account with millions of dollars in it to kick-start the campaign.

At the moment, the Buttigieg campaign says it has about 580,000 donors in total. Compare that to the Sanders number of one million donors, and it’s not bad, though there is obviously a major difference there.

Reading from a Politico article by Elena Schneider:

“Buttigieg's fundraising announcement comes amid an all-out push by the mayor's campaign to invest more heavily in early-state infrastructure. Buttigieg spent more than 20 percent of the quarter on the ground in Iowa, and his campaign opened 42 field offices across the early states of Iowa, New Hampshire, Nevada and South Carolina. The campaign also expanded its staffing footprint in the early states over the summer.”

Zuckerberg calls out Warren in leaked audio from a Facebook meeting

Last up today, The Verge published highlights from two hours of leaked audio from a Facebook meeting. And the reason we’re talking about Facebook on an election podcast is that Mark Zuckerberg, the founder and CEO of the company, specifically called out Senator Elizabeth Warren in his remarks.

So, first up, let’s set the scene with two paragraphs from the story, which was written by Casey Newton.

“...[I]nside the company, the mood remained anxious. Several 2020 presidential candidates, led by Sen[ator] Elizabeth Warren [...], had called for Facebook to be broken up. Libra, a Facebook-created cryptocurrency, had run into strong resistance from regulators around the world who worried that it could destabilize the global financial system. Employees had questions about Zuckerberg himself — Why had the CEO declined multiple requests to appear at government hearings in Europe? — and worried about Facebook’s increasingly dim reputation among their peers.
These questions were raised at two open meetings with employees in July. The Verge obtained two hours of audio from the meetings, which include extended question-and-answer sessions between Zuckerberg and his employees. In language that is often more candid than he typically uses in his public comments, Zuckerberg seeks to rally the company against Facebook’s competitors, critics, and the US government.”

Yeah, so there is tape of Zuckerberg commenting specifically on Warren, and suggesting that he thinks the proper response to her call for splitting up the company is, “you go to the mat and you fight.”

Okay, so listen in:

[CLIP-ZUCKERBERG-WARREN-FIGHT]

So within that clip, Zuckerberg says it would “suck” if Facebook were the subject of legal action. Warren was quick to react on Twitter. She wrote, this morning:

“What would really “suck” is if we don’t fix a corrupt system that lets giant companies like Facebook engage in illegal anticompetitive practices, stomp on consumer privacy rights, and repeatedly fumble their responsibility to protect our democracy.
I'm not afraid to hold Big Tech companies like Facebook, Google, and Amazon accountable. It's time to [hashtag] BreakUpBigTech.”

And then she linked to her policy proposal titled, How We Can Break Up Big Tech. In that proposal from way back on March 8th, she outlined a series of problems with how these big tech companies work. I can summarize those by saying, these companies sure look a lot like monopolies if you squint hard enough. Warren lists a series of specific problems she sees, including the tendency of companies like Facebook to buy their competitors and simply merge rather than compete. In other cases, she criticizes Amazon for copying popular products and selling their own versions instead. She also calls out Google for promoting its own businesses within its search results.
The two big proposals in Warren’s document are a little technical, but I can summarize them by saying, first, she would take the giant tech companies and treat the networking parts of them more like utilities. So things like Google’s search business, and Amazon’s shopping search engine would be subject to strict regulation much like utility companies today, like phone companies and power companies.

And the second big idea is simple: split up the companies by taking some of those big business units—like Google’s search business—and spinning them off into their own companies. Remember, Google does a TON of other stuff that’s not just search. Warren would also reverse a bunch of the previously-approved mergers. So for instance, Instagram and WhatsApp would be broken off from Facebook and would again run as independent companies. She also suggests breaking off Whole Foods and Zappos from Amazon, plus separating Waze, Nest, and DoubleClick from Google.

Near the end of her policy proposal, Warren lays out a vision for what this would all mean for the average person. Reading here from the proposal:

“So what would the Internet look like after all these reforms?
Here’s what won’t change: You’ll still be able to go on Google and search like you do today. You’ll still be able to go on Amazon and find 30 different coffee machines that you can get delivered to your house in two days. You’ll still be able to go on Facebook and see how your old friend from school is doing.
Here’s what will change: Small businesses would have a fair shot to sell their products on Amazon without the fear of Amazon pushing them out of business. Google couldn’t smother competitors by demoting their products on Google Search. Facebook would face real pressure from Instagram and WhatsApp to improve the user experience and protect our privacy. Tech entrepreneurs would have a fighting chance to compete against the tech giants.”

And just one more line from Zuckerberg here that I think gets at the heart of the debate. He says:

“It's just that breaking up these companies, whether it's Facebook or Google or Amazon, is not actually going to solve the issues. And, you know, it doesn't make election interference less likely. It makes it more likely because now the companies can't coordinate and work together.”

Now, that statement by itself will launch a thousand opinion pieces. Because right there you have the crux of the problem. Big Tech says, hey, trust us, we’re working together to protect you. But regulators say, you have too much power, and that offer to collaborate is PROOF. We don’t want to have to trust you. We would prefer to trust nations, or ourselves, not a handful of internet companies who, frankly, have a bad track record of doing the right thing. So where you fall on that divide about whether the BIG tech companies are BETTER than a bunch of SMALL tech companies has a lot to do with how you view this story.

Well, that is it for one more episode of the Election Ride Home. I have been your host, Chris Higgins. You can always find me on Twitter @chrishiggins. Well, it’s brisk day in Portland, with overnight temperatures getting below 40 degrees. The yarden is in a rapid decline as leaves fall and the evergreens really start to shine. I’m proud to say, that arborvitae is still not dead. But, there’s plenty of time for me to mess that up. Today’s task is to plant some hardy cyclamen—that’s those little pink flowers you sometimes see at the grocery store. Well, here they grow beautifully outside, and the ones I like start blooming in the fall. I have a little mini-colony going by the front steps, with the oldest plants being around ten years old now. It’s pretty cool to see something you planted ten years ago coming back every year to say hi. I like that. As always, thanks for listening, and I will talk to y’all tomorrow.