Hillary Clinton’s announcement of her presidential bid has evoked several news stories predicting the demise of the presidential public financing system.

In Buckley v. Valeo, the U.S. Supreme Court decided that spending limits violated the First Amendment. The same decision, however, said that the government could impose spending limits in exchange for public financing of a campaign. The presidential system enacted just after Watergate provided public funding for primary campaigns (on a matching basis) and for the general election. The law established equal spending limits and prohibited private fundraising for the general presidential election for the major party candidates.

McCain-Feingold is also part of this story. That 2002 law liberalized contribution limits a bit which made it easier for strong candidates like Hillary Clinton to raise more money privately than she would receive from the public funding scheme. Of course, she could accept public funding and forego the larger sums she might raise privately. However, her competitors for the nomination – say, Barack Obama or John Edwards – might also be able to raise more money privately, and they would do so to gain an edge in the primaries over Sen.Clinton. The same might well be true of the Republican candidate in the general election. If Sen. Clinton took the public funding and its spending limits, she would be outspent by the GOP nominee. Given all these considerations, Sen. Clinton has decided to forego public funding. Any serious candidate for the presidency in 2008 is likely to make the same decision.

Too much political analysis, you might say. After all, didn’t Congress create the public financing system to prevent corruption of candidates or “level the playing field” for outsiders? The members of Congress who created public funding ascribed such noble and moral ends to their effort. But the actual purposes of the system were rather less noble and more partisan.

From 1960 to 1974 – the year public funding was created – the Democratic presidential candidates fell increasingly behind their Republican opponents in fundraising. Remember, the public funding scheme required equal spending by both major party candidates in the general election. The law was, in short, a good solution to the emerging Democratic presidential fundraising gap. In The Fallacy of Campaign Finance Reform, I looked at how this equalization affected the two parties after 1974, assuming the trend in fundraising from 1960 continued to 1992. The public funding law cut projected Republican fundraising (and campaign spending) by 60 percent while imposing no limit on expected Democratic donations or expenditures.

From the start, the presidential public funding system was a raw partisan ploy obscured by a moralistic rhetoric. It worked in the sense that some analysts believe the equalization of funding gave the presidency to Jimmy Carter in 1976. But the system has failed otherwise. It has not increased entry into the party primaries compared to the system it replaced. Public funding has forced taxpayers to support candidates they would not support if they had a choice. For that reason, the system has lost 75 percent of its supporters over the years. Now only about 7 percent of taxpayers check off support for the presidential fund. In 1978, 28 percent did so.

That lack of public support means Congress is unlikely to save the system. In any case, Democratic presidential candidates have drawn even with their GOP counterparts in fundraising. The real, partisan reason for the system no longer exists. Soon the system itself will be the first choice of those who finish last. Surely Congress could find a better use for a few hundred million dollars.