The Hill
December 7, 2005

Modernizing the presidential public financing system

By Scott E. Thomas and Michael E. Toner

Time is running short for Congress to repair the Presidential Public Funding Program. Congress enacted the program in the aftermath of Watergate to lessen the corrosive influence of big money on those who seek the presidency.

The program functioned reasonably well during the first two decades of its existence. Democratic and Republican candidates alike participated in the system, and, through the 1996 election, every eventual winner of the presidency used the program for both the primaries and general election.

The program has allowed millions of taxpayers to earmark a small amount of their taxes ($1 originally, now $3) to pay for presidential campaigns so that the candidates can reduce reliance on the fundraising process. During the primaries, candidates can get matching funds for the first $250 a donor provides. In the general election, major-party candidates can receive full grants to pay for the post-nomination phase. Minor-and new-
party candidates can receive funds as well.

Tremendous changes have occurred in the presidential selection process over the last 30 years, but the public funding program has not kept pace.
In the last two presidential elections, the program’s outdated spending limits have begun leading “top-tier” candidates to forgo the use of public funds.

Though we come from different political parties, we have joined to tell Congress that, if the program is to be retained, the tools are at hand. The two repairs most needed are (1) a major increase in the primary election spending limit, perhaps to a level as high as $250 million, and (2) a parallel increase in the amount of public funds that participating candidates can receive in the primaries, to half the spending limit. If Congress were to act decisively in these two areas, it would be well on the way to revitalizing the system.

In the 2004 cycle, the primary spending limit was only about $45 million and the maximum amount of matching funds that candidates could receive was about $19 million. President Bush and Sen. John Kerry opted out of the primary matching program, raising $270 million and $235 million, respectively. Because modern primary campaigns stretch over 18 months, because the contribution limit is now $2,100, and because the costs of waging a successful campaign have exploded, the primary spending limit is no longer realistic.

Under our proposal, with a $250 million primary spending limit and up to $125 million in matching funds available, virtually all candidates would likely participate in the program. There would be more assurance that whoever wins the White House will be more reliant on smaller matchable donations than on batches of $2,000 checks.

Our recommendations to Congress also include proposals to:

There is no question that any effort to modernize the presidential public financing system will require additional money. Whatever Congress does in this area, it should maintain the voluntary taxpayer checkoff system for financing the program and should not make the public financing system part of the regular appropriations process. A few states have attempted to fund public financing programs through the appropriations process, sometimes with regrettable results. On some occasions, eligible candidates have been deprived of funds to which they were entitled.

Congress could increase the taxpayer checkoff amount to cover the cost of modernizing the system. In theory, with about 18 million taxpayers currently checking yes on their returns, every $1 increase could generate an additional $18 million in checkoff proceeds each year if the checkoff rate holds steady. In that regard, recent changes by major tax software providers may reduce the incidence of pre-checked “no” returns and could increase the checkoff rate.

The Presidential Public Funding Program is at a historic crossroad. If this country is going to have a public funding system, it should be truly viable, not one that compels candidates to choose between remaining in the system versus opting out to gain a competitive advantage.

Identifiable tools exist that would modernize the program. If decisive action is not taken very soon, the Presidential Public Funding Program likely will become irrelevant in the 2008 election and beyond.