Public financing of presidential elections, created in the wake of the Watergate abuses to limit the clout of anonymous big money, is dead.

No one has said so officially, and there is no move to repeal the law that sets the subsidies given to presidential candidates by the federal government, an option that has been used by every Democratic and Republican presidential nominee since 1976.

That was the first election after the Watergate scandal that prompted Congress to change the way campaigns are financed, banning large anonymous cash donations, setting spending limits and making sure who donated to candidates was public record.

Yet, just about anyone who has a serious chance of winning the Oval Office in 2008 has decided to reject the federal money because doing so limits how many millions they can spend in their pursuit of a $400,000 job.

It is a casualty because candidates believe they need to have enough money to buy unlimited amounts of television ads, which they can’t do if they take the government money, due to the federal spending limits. They believe, with some justification, that if they don’t saturate the airwaves, their opponents will.

Estimates are that either candidate who wins the major party nominations would have been able to collect $150 million from the government to finance part of their primary campaign, their parties’ national convention and all of the general election.

Yet that number pales compared with the estimated $500 million the candidates might be able to raise from private donors. And if they don’t take the federal money, they are not governed by any spending limits.

Many will bemoan the development as another sign that money has taken over politics, yet it is worth noting that the candidates are limited to receiving $2,230 for the primaries, and another $2,300 for the general election from any one person. To reach the expected fundraising totals means that the money will not just come from a few fat cats but millions of donors, although in truth every campaign uses its heavy hitters to solicit donations from their own friends, family and business contacts. That process is known as “bundling.”

The real sign of what is taking place is that a year before the voting begins in the various state primaries to pick the Democratic and Republican nominees, the big-name candidates already are raising money for the general election in November 2008, 21 months away.

The advantage of deciding now to forgo federal money for November 2008 is that a candidate can collect the maximum of $2,300 for the primary and an additional $2,300 for the November election at one time. That reduces fundraising costs, provides important early money to finance a campaign and allows strategists to plan far in advance knowing what resources will be on hand.

There are separate accounts for the primary and general election, and if candidates don’t win the nomination they would then refund to their donors the money they already had given for the November campaign.

And contrary to stereotype, it is not the Republicans who are leading the way but the Democrats, among whom, ironically, support for the public financing system has always been strongest.

Sen. Hillary Clinton of New York has been the most prominent in the money race. Her two leading challengers for the Democratic presidential nomination, Sen. Barack Obama and 2004 vice-presidential nominee John Edwards, have followed her lead.

The Republicans are not far behind. Former Massachusetts Gov. Mitt Romney has said he will forgo the federal money. Although neither of the GOP frontrunners, Sen. John McCain of Arizona and former New York Mayor Rudy Giuliani – both of whom have huge fundraising capability – have yet done so, everyone expects they will make the same decision because of the tactical disadvantage they would otherwise face.

In 2004, President Bush and John Kerry did not take the federal money for the primaries but did for the general election. However, the Democratic nominee publicly flirted with the idea of forsaking the general election money.

One reason Kerry did not was that he worried doing so might create a public relations problem for his campaign. This time no one seems to care. Having unlimited funds is just too important.