Presidential Election Campaign Fund (PECF)

Public funding has played a role in every presidential election cycle since 1976. A public funding law was passed in 1966, but was later repealed. Following that, the Federal Election Campaign Act of 1971, as amended (FECA) and the Revenue Act (establishing the Presidential Fund and allowing taxpayers to designate one of their tax dollars to finance presidential elections) were passed in 1971. It was not until 1974, however, that amendments to the FECA established the system and spending limits for publicly financed presidential elections.
In 1994, Congress increased the individual tax checkoff amount from $1 to its present level of $3.
The FEC administers the program, which involves determining which candidates are eligible, the amount to which they are entitled, and auditing their use of funds (all campaigns receiving public funds are audited by the Commission); the Treasury Department makes the payouts to the campaigns.
Under the existing system, payouts are indexed to inflation (the increase in the Consumer Price Index or CPI, over 1974, also referred to as a cost-of-living adjustment, or COLA) while the $3 contributions are fixed. At the same time, participation in the tax checkoff program has declined each year, from a high of 28.7% for 1980 returns, to 6.6% for returns filed with the Internal Revenue Service (IRS) in 2010. Money for public funding of presidential elections can come only from the PECF. If that Presidential Fund runs short of funds, no other general Treasury funds may be used.

THE BOTTOM LINE

We have prepared a chart that tracks the status of the Presidential Fund from its inception through the current time. It includes monthly deposits into the Fund reported by the Treasury Department, payments from the Presidential Fund certified by the FEC, and participation rates for taxpayers as reported by the IRS.

Here is a chart showing the total amounts paid in public funds from 1976 through April 2012. (Excel version) (PDF version) As you can see, the total amount of public funding in past election cycles has ranged from about $73 million in 1976 to nearly $240 million in 2000. The total for 2008 was over $139 million, representing the largest decline in spending from one cycle to the next. This happened in part because the two major party nominees, Democrat Barack Obama and Republican John McCain, chose not to participate in the primary matching fund program. In addition, then-Sen. Obama (IL) opted out of the public financing program for the general election. Primary matching fund payouts in 2008 were the lowest since the inception of the presidential election public funding program in 1976. As of April 2012, the Commission has certified $35.7 million in public funds in connection with the 2012 presidential election. The 2012 entry will be updated as additional public funds are certified.

We have also prepared a chart listing all candidates who have received at least $1 million in matching funds during the history of the program. (Excel version) (PDF version) Five candidates have received more than $20 million each over the course of the public funding program; Bill Clinton (D), Ronald Reagan (R), George H.W. Bush (R), Robert Dole (R), and Pat Buchanan (R).

PRIMARY MATCHING FUNDS

Partial public funding is available to Presidential primary candidates in the form of federal matching payments. Candidates seeking their party’s nomination to the Presidency can qualify to receive matching funds by raising at least $5,000 in each of 20 states. Only contributions from individuals are matchable, and while an individual may contribute up to $2,500 to a candidate in the 2011-2012 election cycle (a change included in the Bipartisan Campaign Reform Act of 2002 (BCRA) increasing the limit from $1,000), only $250 of an individual’s contribution can be applied toward the $5,000 threshold in each state, and only $250 of an individual’s contribution is ever matchable.

Primary election candidates must agree to an overall spending limit and spending limits in each state. The overall base spending limit for presidential primary campaigns is $10,000,000, plus COLA (over 1974). For the 2012 primary season, the base spending limit is $45,620,700. Certain fundraising expenses (up to 20% of the base expenditure limit) are exempt from that base limit. Therefore, the effective primary expenditure limit in 2012 is $54,744,840. Candidates may also spend up to 15% of the overall spending limit for certain legal and accounting costs (those legal and accounting costs incurred to comply with the FECA and Fund Act). These disbursements do not count against spending limits.

THE MATCHING FUND PROCESS (very generally)

Candidates may apply for eligibility any time but no monies can be paid out until January of the election year. All monies raised for a presidential primary election are potentially matchable. Campaigns may submit requests for funds once per month. (Twice monthly submissions and letter requests used to be the rule, but this was changed because of the shortfall potential.) With a shortfall, all eligible candidates will get a percentage of the total amount to which they are entitled. The percentage will be determined by supply and demand.

Once the Commission determines that a candidate has met the eligibility criteria, the candidate may submit evidence of contributions from individuals for matching. The Commission’s audit staff reviews these submissions to determine whether the requests meet the standards for matchability. The maximum amount of matching funds a candidate may receive is limited to 50 percent of the base spending limit. In 2012, presidential primary candidates who accepted public funding have a maximum entitlement of $22,810,350 (50 percent of $45,620,700).

PARTY CONVENTION AND GENERAL ELECTION GRANTS

The Presidential nominee of each major party may become eligible for a public grant of $20,000,000 plus COLA (over 1974). For 2012, the grant is approximately $91,241,400 for each major party nominee. With the exception of the 2008 Democratic presidential nominee, Barack Obama, every major party nominee has accepted the general election grant since the program's inception in 1976. Candidates themselves may not raise any other funds to be used for campaigning during the general election period.

Public grants of $18,248,300 went to each of the major parties for their conventions in 2012.

Since no third party candidate received 5% of the vote in 2008, only the Republican and Democratic parties are eligible for 2012 convention grants, and only their nominees may receive grants for the general election when they are nominated. Third-party candidates could qualify for retroactive public funds if they receive 5% or more of the vote in the general election.

ADDITIONAL INFORMATION