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Proposals to Eliminate Public Financing of
Presidential Campaigns
R. Sam Garrett
Specialist in American National Government
November 28, 2011
Congressional Research Service
7-5700
www.crs.gov
R41604
CRS Report for Congress
Prep
c11173008
ared for Members and Committees of Congress
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Proposals to Eliminate Public Financing of Presidential Campaigns
What Are the Essential Policy Issues?
There is a consensus that, in 2012 and beyond, the most competitive presidential candidates will
either need substantial additional resources via a reformed public financing program or will need
to engage in substantial private fundraising. For some, this signals an urgent need to save the
public campaign financing program that has existed since the 1970s; for others, it signals the
program’s demise.
On January 26, 2011, the House passed (239-160) H.R. 359, sponsored by Representative Tom
Cole, to repeal public financing of presidential campaigns and nominating conventions. If the
Senate decides to pursue that bill or companion S. 194 (introduced by Senator Mitch McConnell),
Senators might seek to curtail all or part of the program, strengthen the program, or pursue other
options. Two other bills may also be relevant. H.R. 3463 proposes to terminate the public
financing program (in addition to eliminating the Election Assistance Commission) and transfer
remaining amounts to the general fund of the U.S. Treasury for use in deficit reduction. In
addition, Section 620 of the FY2012 Financial Services and General Government appropriations
bill, H.R. 2434, contains a provision that would prohibit spending funds to administer the public
financing program for the fiscal year.
This report provides a brief policy overview and raises potential issues for congressional
consideration. Readers are encouraged to consult the following CRS products for additional
information.
• CRS Report RL34534, Public Financing of Presidential Campaigns: Overview
and Analysis, by R. Sam Garrett;
• CRS Report RL34630, Federal Funding of Presidential Nominating
Conventions: Overview and Policy Options, by R. Sam Garrett and Shawn
Reese; and
• CRS Report R41542, The State of Campaign Finance Policy: Recent
Developments and Issues for Congress, by R. Sam Garrett (the “Public Financing
Issues” section).
For a discussion of constitutional considerations, which are beyond the scope of this report and
those noted above, readers may consult CRS Report RL30669, The Constitutionality of
Campaign Finance Regulation: Buckley v. Valeo and Its Supreme Court Progeny, by L. Paige
Whitaker.
What Would The Bills Do?
H.R. 359 and S. 194 would end public financing of presidential campaigns and party conventions.
The bills would make inapplicable a section of the Internal Revenue Code that permits
individuals to make voluntary designations on their individual income tax returns to support
public financing.1 Amounts already designated would be transferred from the Presidential
Election Campaign Fund (PECF) to the general fund of the U.S. Treasury. Unlike the Senate bill,
1 26 U.S.C. §6096.
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Proposals to Eliminate Public Financing of Presidential Campaigns
an amendment to H.R. 359 would require that amounts returned to the Treasury be used
specifically for deficit reduction. The Senate bill only requires that funds be returned to the
Treasury.
The public financing provisions of H.R. 3463 are substantially similar to H.R. 359, although the
former bill would although abolish the Election Assistance Commission.2 H.R. 3463 would
terminate the public financing program and direct that amounts remaining in the PECF be
returned to the general fund of the U.S. Treasury for use in deficit reduction. As of November 28,
2011, approximately $199.0 million remained in the PECF.3
Finally, Section 620 of the FY2012 Financial Services and General Government appropriations
bill, H.R. 2434, contains a provision that would prohibit spending funds to administer the public
financing program for the fiscal year.
What Is the Presidential Public Financing Program?
For those candidates and party conventions choosing to participate, the presidential public
financing program provides funds for three phases of the campaign:
• Grants to party nominating conventions. In 2008, the Democratic and Republican
parties were eligible to receive approximately $16.8 million. The Republican
convention, which ended early due to Hurricane Gustav, ultimately received
$13.0 million. Convention committees receiving public funds must agree not to
raise more funds, but separate “host committees” often raise substantial private
amounts. Funding for convention grants is reserved first, followed by payments
for general and primary funding. For the 2012 cycle, two convention grants of
approximately $17.7 million each have already been paid to the Democratic and
Republican convention committees. Inflation adjustments of approximately
$600,000 each are scheduled to follow in 2012.
• Grants for general-election nominees. In 2008, then-candidate John McCain
accepted the $84.1 million grant available to major-party nominees. Then-
candidate Barack Obama chose not to accept public funds. Candidates who
accept general election grants must agree not to engage in additional private
fundraising for their campaigns, and not to spend funds other than the general
election grant.4 It is currently unclear whether any candidate will participate in
2012 general-election public financing.
• Matching funds for primary candidates. Publicly financed primary candidates
may receive 100% matches of individual contributions up to $250. In 2008,
primary candidates could spend up to approximately $42 million. It is currently
unclear whether any candidate will participate in 2012 primary-election public
financing.
2 EAC issues are beyond the scope of this report. For additional discussion, see CRS Report RS20898, The Help
America Vote Act and Elections Reform: Overview and Issues, by Kevin J. Coleman and Eric A. Fischer.
3 The Financial Management Service of the U.S. Treasury Department provided this information to CRS, November
2011. CRS rounded the amount provided.
4 Limited exceptions exist for additional fundraising and spending for legal and accounting expenses.
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Proposals to Eliminate Public Financing of Presidential Campaigns
Congress established the current public financing system during the early and mid-1970s,
especially via the 1974 Federal Election Campaign Act (FECA) amendments.5 Congress created
the voluntary public financing option amid concerns about potential corruption in campaign
fundraising following Watergate. Initially, individual taxpayers could designate $1 ($2 for
married couples filing jointly) to the PECF.6 Congress tripled the checkoff designation from $1 to
$3 (and from $2 to $6 for married couples) in 1993.7
Since the 1976 election cycle, approximately $1.5 billion has gone to publicly financed
candidates and nominating conventions. Almost all that money has benefitted Democratic and
Republican campaigns. Third party candidates, independents, and Lyndon LaRouche (who often
runs as a Democrat) collectively received about 4% of approximately $1.3 billion provided to
candidates overall.8
What Might Happen If the Bills Were Enacted?
If any of the bills discussed above became law, presidential candidates and nominating
conventions would have to be entirely privately financed, as all other federal campaigns are
today.9 H.R. 2434 appears to limit spending funds to administer the public financing program
only for the FY2012 fiscal year, whereas the other bills would repeal public financing itself. In
any case, however, the effect would be to at least temporarily halt public funds for presidential
campaigns. Repealing the public financing program would eliminate a major tenet of modern
campaign finance policy, albeit a controversial one.
• For those who believe that they could raise higher amounts than would be
available through public funds—or who wanted to spend more than would be
permitted—an end to public financing might be of little consequence. Those who
are philosophically opposed to using public funds would likely support repealing
or otherwise curtailing the program.
• Some otherwise qualified candidates could be deterred from seeking the
presidency because they do not have access to, or do not believe they can raise,
sufficient private funds.
• Candidates might have to spend additional time raising private funds, perhaps
with an incentive to pursue large contributions, to make up for the lack of public
funds.
• Amounts currently in the PECF could be used for other purposes. As of January
21, 2011, the PECF balance was approximately $194.8 million.10 It is also
5 P.L. 93-443; 88 Stat. 1263.
6 On the presidential public financing portion of the Revenue Act, see 85 Stat. 573.
7 26 U.S.C. §6096(a). On the increase, see P.L. 103-66; 107 Stat. 567-568.
8 These figures are based on CRS analysis of data provided by the Federal Election Commission, data in Federal
Election Commission, Report on the Presidential Public Funding Program (FEC: April 1993), and data in FEC press
releases. Data on program totals sometimes vary over time and by source.
9 2 U.S.C. §431 et seq.
10 Information provided to CRS by the Financial Management Service, U.S. Treasury Department, via email, January
21, 2011.
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possible that additional savings could be achieved if the Federal Election
Commission and Treasury Department no longer had to administer the program.
Why Are There Concerns About the
Program’s Viability?
Elections since 2000 have raised concerns about whether spending limits required of publicly
financed candidates, and funds available to those candidates, are sufficient.
• In 2000, then-candidate George W. Bush was the first person elected President
since 1976 without participating in all elements of the public financing program
open to candidates (primary and general). Instead, Mr. Bush accepted only
general election public funds.
• In 2008, Barack Obama became the first person elected President since 1976
without accepting any public funds.
Taxpayer designations have also generally declined over time.
• Designations reached a high point in 1980, when 28.7% of filers designated
funds for the PECF; participation reached a low of 7.3% in 2009. Despite a slight
increase in 2010, for rounding purposes, the figure remained at 7.3%.11
Author Contact Information
R. Sam Garrett
Specialist in American National Government
rgarrett@crs.loc.gov, 7-6443
11 Financial Management Service data obtained via the FEC indicate that the 2009 rate was 7.27%, compared with
7.28% for 2010.
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