Public Financing of Presidential Campaigns: Overview and Analysis

R. Sam Garrett
Analyst in American National Government

The presidential public campaign financing program is funded through "checkoff" designations on individual income tax returns. Choosing to participate (or not) in the checkoff does not affect one's tax liability or refund. Candidates who choose to participate in the program may receive taxpayer-funded matches of privately raised funds during primary campaigns, and grants during the general-election contest. Public funds also subsidize nominating conventions. The public financing system has remained largely unchanged since the 1970s. However, there is general agreement that, if the program is to be maintained, updates are necessary to provide greater financial resources and higher spending limits to participants. 

This report discusses current controversies and arguments for and against public financing of presidential campaigns, legislative history, elements of the program, taxpayer and candidate participation, financial status of the program, recent legislation, and analysis of various policy proposals. If Congress chooses to alter the program, consensus will be necessary in what has historically been a particularly complex and contentious area of campaign finance policy. 

Additional legislative activity on presidential public financing is generally expected during the 111th Congress. As of this writing, however, only one bill has been introduced. H.R. 2992 would eliminate public financing for presidential nominating conventions. No bills addressing candidate financing have yet been introduced. 

Four bills introduced in the 110th Congress (H.R. 776, S. 436, H.R. 4294, and S. 2412) would have updated the program, including candidate financing. Those bills, which were substantially similar, would have greatly increased the financial resources available to candidates, particularly through "escape hatch" provisions designed to allow candidates to respond to high-spending opponents. That feature does not currently exist. Overall, under the proposed increases, publicly financed candidates could have spent as much as $450 million, compared with approximately $126 million in 2008 (plus approximately $14 million in exempt fundraising, legal, and accounting costs). Part of the increased benefits to participants would have been funded by increasing the checkoff designation from $3 for individuals to $10, and from $6 to $20 for married couples filing jointly. It is unclear how taxpayers would respond to this change, particularly because the effects of a proposed public education program cannot be predicted. Taxpayer participation in public financing declined the only previous time that Congress increased the checkoff amount, but the higher designation amounts nonetheless substantially raised the balance in the Presidential Election Campaign Fund, at least in the short term. 

Finally, two bills (H.R. 72 and H.R. 484 in the 110th Congress) would have curtailed part or all of the public financing program. These approaches are likely to be attractive to those who believe that public financing is unnecessary, an improper use of taxpayer resources, or both. However, removing the option of public subsidies would leave presidential candidates entirely dependent upon private donations or personal resources. As this report discusses, various options, each with potential strengths and weaknesses, exist for revisiting the presidential public financing system.


Date of Report: March 25, 2010
Number of Pages: 41
Order Number: RL34534
Price: $29.95

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