Two members of the Federal Election Commission are urging Members of Congress to consider dramatically restructuring the funding system for presidential campaigns.

FEC Chairman Scott Thomas, a Democrat, and Michael Toner, a Republican, warned Congressional leaders in a letter this week that the system is so outdated, it “runs the serious risk of being totally irrelevant in the 2008 election and beyond.”

In their letter, the commissioners cited a decline in donations from tax-return check-offs, as well as “antiquated primary spending limits, front-loaded primaries, and the exploding cost of presidential campaigns have all conspired to marginalize the public financing system.”

The system appeared to reach a low ebb in the 2004 elections, when three top-tier candidates bypassed public money in the primaries.

President Bush, Sen. John Kerry (D-Mass.) and former Vermont Gov. Howard Dean (D) all declined public financing during their primaries — a move that would have made them subject to strict spending limits.

While Bush and Kerry did eventually accept public financing during the general elections, Thomas and Toner warned that by 2008 there will be a “real possibility” that candidates may opt out of the system for the general election as well.

For those reasons, Thomas and Toner are pushing lawmakers to consider overhauling public financing for presidential campaigns “so that top-tier candidates of both major parties have an incentive to participate in all aspects of the system, including the matching fund program for the primaries.”

Their suggestions include: making significant increases in the primary spending limit for candidates who accept matching funds; doubling the maximum amount of matched donations from $250 to $500; and greatly increasing the total amount of matching funds that candidates can receive if they choose to take part in the public financing system.

The commissioners also recommended abolishing the state-by-state spending limits, making matching funds available to candidates earlier in the primary season and tightening the eligibility requirements for candidate to receive public funds.

Democracy 21 President Fred Wertheimer, a key player in campaign finance reform efforts on Capitol Hill, said he agrees that the public-financing system for presidential candidates is an a state of crisis.

“There is a real interest in trying to ensure that adjustments are made in the presidential public financing system in order to have a revised system available for the 2008 presidential election,” Wertheimer said.

He added, “The key here is to devise a system which provides sufficient incentives and the ability to run a competitive campaign so that candidates will see this as valuable alternative to pursue, instead of simply going the private route and trying to raise as much money as they can get their hands on.”

In late 2003, key sponsors of the Bipartisan Campaign Reform Act introduced legislation to overhaul the presidential public financing system.

Sens. John McCain (R-Ariz.) and Russ Feingold (D-Wis.) and Reps. Christopher Shays (R-Conn.) and Marty Meehan (D-Mass.) are expected to introduce another, similar bill in the near future, but for now are chiefly focusing their efforts on 527 reform.