On '04 race, buck stops ... where?

Money has been sloshing all over the political world this week. Howard Dean abandoned the public-financing system and pushed the accelerator to the floor in fundraising. John Kerry will soon decide whether he, too, opts out of public funding for the primaries and taps into personal assets.

And President Bush, who makes raising money look like a walk in the park, approached the $100 million mark in his reelection campaign this week - for a primary in which he has no challenger. As in the 2000 primary season, Bush is forgoing public funds and the limits those entail.

The 2004 campaign will easily shatter all fundraising records, blowing the lid off the 30-year-old post-Watergate system that sought to level the playing field and offer voters more choices. Now, increasingly, the system is splitting in half, with front- runners dropping out and only longshot candidates staying in for the federal cash. Bush aims to raise upwards of $170 million - and may well double his take from the primary season four years ago, when he raised just over $100 million. Dr. Dean, the Democratic front-runner, will do his best to match Bush.

"We're heading toward a thermonuclear arms race in terms of money in 2004," says a senior Senate Republican aide. "Clearly, it will be unlike what we've ever seen before, because of the fact that Bush has no primary opposition and he has this extraordinary amount of money."

Even if Dean, the former Vermont governor, is able to match Bush dollar for dollar, he would start the general election far behind the president. Bush is hoarding his cash until it is clear who the Democratic nominee will be, while Dean, who has raised more than $25 million so far, has to spend furiously just to win the nomination. As of Sept. 30, the last reporting date, Bush had $70 million in cash on hand versus $12.4 million for Dean.

Four years ago, Bush had to spend almost $100 million to prevail in the primaries, because of the unexpectedly strong challenge of Sen. John McCain (R) of Arizona. This time around, Bush has all the advantages he had last time and no challenger.

"Bush has a fundraising machine unparalleled in American history, and there may never be one like this again," says John Green, director of the Bliss Institute of Applied Politics at the University of Akron.

Bush came into 2000 with extraordinary connections - from his father (the former president), from his days as governor of Texas, and from his years of involvement in Republican politics. "One could easily imagine the Republicans not being that united in the future," says Professor Green. This time around, "if you look at the total money Democrats have raised, it's about equal to Bush, so it suggests one of the reasons Bush is so successful is that they [the Republicans] are united."

Dean's decision to opt out of the federal matching program for the primaries - which means he forgoes about $19 million in federal money, but is allowed to ignore spending limits - was probably inevitable, once he had established himself as front-runner, even if his backers are likely to believe in the concept of public campaign financing, analysts say. Bottom line: They're more interested in defeating Bush than in holding to an ideological ideal. [Editor's note: The original version misstated the amount of federal funding Dean would forgo by opting out of the federal matching program.]

Dean's decision is also likely to spur Bush's fundraising to greater heights, because it puts a face on the opposition. Even if some unforeseen event or revelation knocks Dean out of the lead, the Bush camp can easily turn its sights on Dean's successor.

This time around, Bush also enjoys the perks of incumbency. Lately, he has been making a couple of trips a week out of Washington to give speeches and raise campaign money. These trips are largely paid for by the taxpayers, with the costs of the fundraising portion picked up by the Bush campaign. He has focused on travel to political battleground states, such as Florida, Ohio, Pennsylvania, and Michigan.

When Bush strategists decide to start dipping into the campaign cash, they are expected to use it for TV and radio ads as well as grass-roots mobilization. Bush will, in effect, take a page out of President Clinton's reelection campaign in 1996: run positive ads about himself and negative ads about the likely nominee of the other party.

He may not spend any leftover money during the general election, when he is expected to stay within the federal election system and rely on the $75 million federal grant he will receive. He may donate any leftover primary money to the Republican Party - a potentially large infusion of cash at a time when the parties are, for now, having to do without so-called "soft money" donations. The GOP can either spend that money itself or give it to state parties and congressional campaign committees, or some of each.

Advocates of campaign-finance reform are already looking to reform the presidential campaign system, by upping the federal matching funds and thus making it more attractive to keep front-runners within the system. But those reforms wouldn't take hold in time for the 2004 election.

Meanwhile, the Supreme Court is expected rule soon on the last big campaign-finance reform, known as McCain Feingold. That ruling won't have a big impact on presidential fundraising, but if the court reinstates unlimited soft-money donations to the parties, that will once again shift how money is spent and donated.