Public Financing Helps Fuel U.S. Presidential Campaigns

By Ralph Dannheisser

When Americans file their annual income tax returns, they find this note near the top of the form: "Presidential Election Campaign: Check here if you, or your spouse if filing jointly, want $3 to go to this fund."

Even though $3 is a small amount, the public financing system it supports could provide each of the presidential nominees with about $84 million in campaign funds.

The public financing system has funneled tens of millions of dollars into presidential campaigns every election cycle since 1976. However, taxpayer participation in the check-off system has declined. The check-off amount peaked at $71.3 million in 1994 and decreased to $51.0 million by 2006. A record-high 28.7 percent of taxpayers contributed to the fund in 1980; that percentage shriveled to 9.1 percent in 2005, according to the Internal Revenue Service.

Public financing was implemented to address concerns about the increasing influence special interest groups wielded in elections and to place nominees of the two major political parties on a more equal financial footing.

To this end, Republican and Democratic nominees in the general election receive a fixed amount, indexed for inflation; nominees of other parties that garner more than 5 percent of the vote also qualify, but for smaller shares.

Recipients must meet strict qualifications set by Congress. They must agree to accept no private contributions, spend no more than $50,000 of their own money and adhere to a spending limit. However, party committees and political action committees (PACs) not coordinating their activities with the candidate's campaign can continue to raise funds. (See "'527' Committees Spend Millions on Political Discourse ( http://www.america.gov/st/elections08-english/2008/April/20080403113513abretnuh0.9178125.html ).")

Candidates running in presidential primaries can receive a share of public funding as dollar-for-dollar matches for contributions up to $250 by individuals. To qualify, a candidate must raise more than $5,000 in each of 20 states from individual donors. Contributions from parties and PACs are ineligible for matching.

2008 Campaign Highlights Pros and Cons of Public Financing

Candidates can accept public funding or opt out of the system and avoid its limits on contributions and spending. That choice already has provoked controversies in the 2008 campaign.

Like many candidates, Barack Obama, who leads the race for the Democratic nomination, opted to forgo public financing in the primaries. In September 2007, Obama checked "yes" on a questionnaire when asked whether he would "participate in the presidential public financing system" if his Republican opponent did. He added he would "aggressively pursue an agreement ... to preserve a publicly financed general election."

Thus far, Obama has raised a record-setting $234 million in private donations, which suggests the Illinois senator could raise more money by forgoing public financing. Accepting public financing, Obama said in April, "presents candidates with some pretty tough decisions in terms of how they want to move forward, if they want to compete in as many states as possible."

Obama's critics say he is backing out of a commitment made at a time when he did not expect to win the nomination, much less raise record-setting amounts.

Presumed Republican nominee John McCain - who had raised about $75 million by April - has tried to make Obama's shift in position a campaign issue. "He's saying one thing and he's doing the other," McCain declared, urging Obama to "keep your word to the American people."

McCain previously had indicated that he likely would take public funds. However, McCain said April 11 that if Obama declines public financing, he might do the same.

An April 14 Washington Post editorial said Obama's possible switch "may be understandable as a matter of campaign tactics; Mr. Obama sits atop a whirring money machine that appears capable of vacuuming up amounts far in excess of the federal check." But, the Post said, it "reflects badly on Mr. Obama."

If Obama did opt out of public financing, he would be the first major party candidate to do so in a general election since the system was instituted. Democratic candidate Hillary Clinton has not said whether she would take public financing in a general election.

McCain's Public Financing Controversy

When his campaign was struggling in July 2007, McCain applied for $5.8 million in matching funds available for his primary efforts and kept his campaign afloat by taking a bank loan backed, critics say, by the matching funds as collateral. When his fundraising later improved, McCain sought to opt out of the federal program and its strict spending restrictions. However, the FEC was unable officially to approve his request, because four of its six seats are vacant.

Democratic National Committee (DNC) officials argue his attempt to withdraw without FEC approval violated the Bipartisan Campaign Reform Act of 2002, popularly known as "McCain-Feingold" after him and his Democratic co-sponsor, Senator Russ Feingold. DNC Executive Director Tom McMahon says the funding flap shows McCain's "apparent belief that the reforms he championed apply to everyone but himself."

The FEC is unable to act on this issue or any other because Senate confirmation of three potential FEC commissioners has been blocked by a partisan stalemate over a nominee whom civil rights groups oppose. (See "Federal Election Commission Regulates Presidential Campaigns ( http://www.america.gov/st/usg-english/2007/November/20071105163347ndyblehs8.393496e-02.html ).")

The DNC filed a lawsuit April 14 against the FEC to force the agency to investigate whether McCain violated public financing rules. McCain already has spent more than the $54 million allowed under public financing in the primary season. The DNC argues that McCain remains bound by public financing restrictions and should not be allowed to spend any more primary funds.

Given its challenges, the future of the three-decades-old experiment in public financing is unclear but for now it continues to provide a major source of campaign funds to any candidate who chooses to participate.

Source: U.S. Department of State

judythpiazza@newsblaze.com

   _   _