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The Political Fundraising Model Is Breaking Down. The Success Of Bernie Sanders And Mike Bloomberg Are The Clearest Sign.

The fundraising model that powered politics between 2000 and 2016 is breaking down — and so is institutional party power.

Posted on February 21, 2020, at 3:07 p.m. ET

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One possibility in 2020 is that we get a very weird primary: two old men most recently elected to office as independents competing for the Democratic nomination.

A choice between Michael Bloomberg and Bernie Sanders, however, might actually be the natural conclusion of the last 15 years in politics. Centrally, they each reflect the breakdown of the fundraising model that powered politics for a time — and the party structures that dominated politics for a century.

You saw a quick version of this dynamic play out on Thursday: Elizabeth Warren — the candidate who literally called for the rejection of super PAC funding — wouldn’t disavow the new super PAC that’s airing pro-Warren ads in Nevada.

“That’s how it has to be,” she said. “It can’t be the case that a bunch of people keep them and only one or two don’t.”

Later that night, the presidential campaigns released their January financial reports — a total wasteland of cash. Days before the Iowa caucus, Warren’s campaign had just $2.3 million left, with a $400,000 line of credit on the books. Pete Buttigieg had $6.6 million on hand, but at least some of that money can only be spent in a general election. Since then, Warren has announced fundraising deadlines, walked onto the debate stage with machetes, cut Bloomberg's head off, and taken in $17 million. Buttigieg is flying so much between rallies (and fundraisers) in Western states that he joked he isn’t always sure where he is anymore. These are the candidates who are first and third in the delegate count.

But we’re undergoing a major shift in the way politics work.

In the 1950s and ‘60s, television broke up the chokehold that big city machines held on national politics, pushing the parties toward more democratic caucuses and primaries. Congress instituted a public financing program that lasted, in various iterations, for the next 40 years. We’re seeing another shift in the mobile internet age as a result of specific finance decisions over the last two decades.

In 2000, George W. Bush declined to take public financing for the Republican primary, breaking with tradition; previously, candidates would receive matching funds from the government for their campaigns that capped fundraising. In 2008, Barack Obama declined to take general election public financing, blowing the doors off how much money candidates would raise thereafter. (John McCain, who took public financing, raised the maximum $84 million to Obama's $750 million in 2008.)

Fundraising for those campaigns (and still many campaigns now) ran on individual max-out checks: usually about $5,000 between a primary and a general, often “bundled” by someone on behalf of the campaign for efficiency and impact. But because of a series of Supreme Court rulings, donors by the early 2010s could create authorized super PACs — and the limits on joint-fundraising agreements between campaigns and the national parties went much higher. That meant, as you may have noticed with Donald Trump this time around or Hillary Clinton in 2016, that a presidential candidate can raise staggering sums of money through max-out checks to the party committees. On the strength of these developments, Obama, Clinton, Mitt Romney, the Republican National Committee, and a series of PACs raised and spent billions on presidential elections.

The situation by 2015: an outsize media and political obsession on whom big donors might favor in the Republican primary, and a Clinton operation that organized fundraising like they were retaking France. Meanwhile, you had a Republican Party machine presiding over a Trump nomination with essentially zero way to interfere, and a Democratic Party machine only able to favor Clinton by, like, limiting the number of debates.

In 2015, Sanders took the Obama-era innovations in online fundraising and advanced far beyond them, proving categorically that you could fund a national campaign without those $2,800 checks, reengaging the activist left in the process. Sanders raised $228 million, all from small contributions, premised on a highly ambitious, highly ideological platform. (He also had and has some super PAC support of his own, funded by a nurses union.) Sanders’ success — with all the validation conferred by votes, sway, and money — has already transformed the purview of Democrats from policy to style. The party's base for generations might really be far more in line with his ideas than anyone else’s; Sanders, more than any other politician in America, commands a multiracial base under the age of 30.

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Meanwhile, Trump has produced an influx of anti-Trump urban/suburban, Republican-leaning voters into the Democratic Party; few have voted so far in the primary, but these kinds of voters helped Democrats win House seats in affluent areas across the Midwest and South in 2018. During that election, in particular, regular Democrats sent millions and millions of dollars directly to candidates online or through outside groups like Swing Left, which Bloomberg has directed donations to this time around. Leaving aside momentarily his nightmare debate and the underlying substance of that performance, Bloomberg's particular emphasis on business, gun control, public health causes, and climate change fit well within the framework of this possible new element in the Democratic Party. But he’s realized the full promise of the unlimited money era: He’s already spent more on a presidential primary than any candidate ever; you practically can’t open a drawer without expecting to see a Mike Bloomberg ad playing inside.

Parties change; there’s no guarantee they will remain the way they are. In the 1960s and ‘70s — for a variety of complex reasons, many having to do with race, economics, and ideologies — the parties transformed, and we entered into a 30-year conservative era. It’s possible that a big-business progressive and a democratic socialist competing seriously for the Democratic nomination reflects that kind of shift, and we're headed into a new progressive era of expansive, European-style government touched off by Obama.

But the point in the here and now is: Campaigns aren’t merely abstract exercises in ideas; they cost money. Staff and advertising do not materialize on their own. When Kamala Harris dropped out in December, in the mostly super PAC–free world of two months ago, she told donors she would’ve needed to raise $5 million in two weeks, which she thought unrealistic. Said Harris, “I just don’t want to bullshit you.”

Once Sanders proved that a campaign could be funded nationally without major donors, the obvious transactional nature of major fundraisers became untenable for Democrats to champion the way Obama and Clinton did, no matter how much they said they wanted to get rid of them. Whether his model scales for multiple candidates in a primary remains unclear; the results for Warren seem to be mixed. But in such a scenario, the only other natural solution is the self-funding candidate.

So here we are: As of Thursday, Sanders, Bloomberg, and Tom Steyer are the only candidates airing television ads in California and Texas, where voters will allocate hundreds of delegates on Super Tuesday. Bloomberg spent $220.6 million in January. His advisers claim otherwise, but he is actively boxing competitors from major donors by providing his time cost-free. Bloomberg owns a news outlet and the portal through which financial news passes. Sanders, who’s won or split the first two contests and is expected to win the third on the strength of Nevada’s Latinx community, is raising in excess of a million dollars a day in February and rallying supporters in massive rallies across the country. He has spent years building a digital platform, from which he can weather the ups and downs of media coverage, to broadcast his movement’s stories and message.

There's no clearer sign, really, that the machine politics of a century ago have died than these two candidates — with the policy positions and support of Democrats, especially Sanders, but few of the traditional chits — competing seriously for the nomination. But in the end, the DNC's control of the process is limited to material access to things like debate stages and voter files (which cost money, too).

This isn’t to compare the inherent value of the candidates — just to state plainly why their approaches work in the formal and informal rules of 2020. It’s the natural conclusion of a dynamic where campaigning is expensive, asking for big money is bad, the primary calendar is front-loaded, and the parties have little control: a true ideological movement candidate with a massive digital platform vs. a self-funding billionaire on TV and YouTube.

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