Public Financing of Congressional Campaigns: Overview and Analysis

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Public Financing of Congressional

Campaigns: Overview and Analysis

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Analyst in American National Government

April 11, 2011

Congressional Research Service

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RL33814

CRS Report for Congress

Prepared for Members and Committees of Congress

Public Financing of Congressional Campaigns: Overview and Analysis

Summary

To critics, public campaign financing, generally in conjunction with spending limits, is the

ultimate solution to perceived problems arising from ever-growing costs of campaigns and the

accompanying need for privately donated campaign funds. Public financing supporters maintain

that replacing private funds with public money would most effectively reduce potentially

corrupting influence from “interested” money. On the other hand, opponents of public financing

question whether real or apparent corruption from private fundraising is as serious a problem as

critics claim. They also argue that public financing would be an inappropriate use of taxpayer

dollars and would compel taxpayers to fund candidates they find objectionable.

In the early 1970s, supporters succeeded in enacting public financing in presidential elections, a

system that has been available since 1976. In addition, many states and localities have provided

public financing in their elections since the 1970s (or before). Today, 16 states offer some form of

direct aid to candidates’ campaigns through fixed subsidies or matching funds. Perceptions about

the presidential and state public financing systems have shaped opinions about adding public

financing to congressional elections. Also shaping that debate was the Supreme Court’s landmark

1976 Buckley v. Valeo ruling, which struck down mandatory spending limits, but sanctioned

voluntary spending limits accompanying public financing.

Proposals for publicly funded congressional elections have been offered in almost every Congress

since 1956; the issue was prominently debated in the mid-1970s and the late 1980s through early

1990s. Proposals were passed twice by the Senate in the 93rd Congress and by both the House and

Senate in the 101st, 102nd, and 103rd Congresses. Only the 102nd Congress proposal was reconciled

in conference but was vetoed by the President.

Thus far in the 112th Congress, Senator Durbin and Representative Larson introduced the latest

versions of the Fair Elections Now Act (FENA) on April 6, 2011. These include S. 750 and H.R.

1404; S. 749 is a separate measure that would finance the program proposed in S. 750. The two

versions of FENA, S. 750 and H.R. 1404, are similar to three bills introduced during the 111th

Congress (H.R. 6116, which superseded H.R. 1826, and S. 752). Like their predecessors, the

current versions of FENA propose to provide participating candidates with a mix of base

subsidies, matching funds, and broadcast vouchers. The current versions of FENA propose two

changes in incentives for participating candidates compared with 111th Congress versions of the

legislation. First, although the types of available funding remain consistent, participants would be

eligible for larger funding amounts. Second, coordinated party expenditures would be unlimited if

funds used for those expenditures came from individual contributions of less than $500.

Appendix D and Appendix E at the end of the report summarize major provisions of legislation

introduced in the 111th and 112th Congresses respectively.

In addition to discussing recent legislation, this report reviews past proposals for, and debate over,

congressional public financing. It also discusses experiences with the presidential and state public

financing systems. Finally, the report offers potential considerations for Congress in devising a

public financing system for its elections. The report will be updated periodically, on the basis of

congressional and state activities.

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Public Financing of Congressional Campaigns: Overview and Analysis

Contents

Introduction ................................................................................................................................1

Overview of Report...............................................................................................................1

What Has Happened Most Recently in Congress? .................................................................2

Underpinnings of Contemporary Congressional Debate.........................................................2

Presidential System Since the 1970s: A Model ................................................................2

Linkage with Spending Limits.........................................................................................3

Arguments Supporting and Opposing Public Financing: Brief Overview ...............................4

Supporting ......................................................................................................................4

Opposing ........................................................................................................................5

Legislative Proposals for Public Financing of Congressional Elections ........................................6

Evolution During the Early 20th Century................................................................................7

First Public Finance Bills ................................................................................................9

1950s and 1960s ........................................................................................................... 10

Congressional Activity Since the Mid-1960s ....................................................................... 11

90th Congress (1967-1968) ............................................................................................ 11

92nd Congress (1971-1972)............................................................................................ 11

93rd Congress (1973-1974) ............................................................................................ 12

94th Congress (1975-1976) ............................................................................................ 13

95th Congress (1977-1978) ............................................................................................ 14

96th Congress (1979-1980) ............................................................................................ 15

97th-99th Congresses (1981-1986) .................................................................................. 15

100th Congress (1987-1988) .......................................................................................... 16

101st Congress (1989-1990)........................................................................................... 17

102nd Congress (1991-1992).......................................................................................... 18

103rd Congress (1993-1994) .......................................................................................... 19

104th-109th Congresses (1995-2007) .............................................................................. 20

110th Congress .............................................................................................................. 21

111th Congress............................................................................................................... 22

112th Congress .............................................................................................................. 23

Devising a Congressional Public Finance System: Options for Policymakers....................... 25

Setting Expenditure Limits............................................................................................ 25

Coverage: General Elections Only or Primary Elections, Too?....................................... 26

Conditions for Receipt of Public Benefits...................................................................... 27

Qualifying Requirements .............................................................................................. 27

Public Funds: Matching Funds or Fixed Subsidies? ....................................................... 27

Public Benefits Other Than Direct Subsidies to Candidates ........................................... 27

Protecting Participants from Free-Spending Opponents and Outside Groups.................. 29

Other Disincentives Toward Non-Participation.............................................................. 29

Conditional Public Subsidies......................................................................................... 30

Paying for Public Financing .......................................................................................... 30

State Experiences with Public Financing ................................................................................... 31

Introduction ........................................................................................................................ 31

Types of Public Financing ................................................................................................... 34

Eligibility and Conditions for Public Funding...................................................................... 35

Participation by Candidates ................................................................................................. 36

Impact of Public Financing in the States .............................................................................. 42

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Public Financing of Congressional Campaigns: Overview and Analysis

Money and Competition................................................................................................ 42

Time Spent Fundraising ................................................................................................ 44

Diversity Among Candidates and Donors ...................................................................... 44

The Impact of Public Financing Efforts in Arizona, Connecticut, and Maine.................. 45

Public Opinion on Public Financing and Spending Limits ......................................................... 48

Potential Considerations for Congressional Public Financing..................................................... 49

Figures

Figure 1. States Offering Public Financing ................................................................................ 33

Figure 2. Types of Public Financing Offered in the States .......................................................... 34

Tables

Table 1. States Offering Public Financing to Statewide or

Legislative Candidate Campaigns........................................................................................... 37

Table 2. Participation in Public Financing in Arizona (Legislative Candidates), 2000-2008........ 47

Table 3. Participation in Public Financing in Maine (Legislative Candidates), 2000-2008 .......... 47

Table A-1. Congressional Election Public Finance Bills Passed by House or Senate:

Summary of Provisions .......................................................................................................... 53

Appendixes

Appendix A. Public Finance Bills Passed by the House or Senate: 1973 -1993 .......................... 53

Appendix B. Public Finance Bills in the 109th Congress: Summary of Key Provisions ............... 63

Appendix C. Public Finance Bills in the 110th Congress: Summary of Key Provisions ............... 68

Appendix D. Public Finance Bills in the 111th Congress: Summary of Key Provisions ............... 77

Appendix E. Public Finance Bills in the 112th Congress: Summary of Key Provisions ............... 85

Contacts

Author Contact Information ...................................................................................................... 87

Acknowledgments .................................................................................................................... 87

Congressional Research Service

Public Financing of Congressional Campaigns: Overview and Analysis

Introduction

Overview of Report

This first section provides the context for the debate on extending public financing to

congressional elections, beginning with a discussion of two major political realities that inform

that debate. The first is the presidential public financing system that has been in place since 1976

and has had mixed success in realizing the goals of its original sponsors. The second is the

interplay between the concepts of public financing and campaign spending limits, which are often

linked but which have very distinct characteristics; the 1976 landmark Supreme Court decision in

Buckley v. Valeo contributed to that linkage because of its allowance for only voluntary spending

limits, such as in conjunction with a public financing system. The section concludes with a

summary of arguments for and against public financing, arguments which have not changed in

essence over time but which have been shaped by the political realities noted above.

The second section provides a historical review of efforts in Congress to enact public financing of

its elections (although some attention is paid to presidential public financing as a precursor). The

section begins with a brief review of early congressional interest and activity in the 20th century,

followed by a more detailed Congress-by-Congress discussion beginning with the 90th Congress.

Special attention is paid to the two periods in which congressional activity on public financing

was the greatest: the Watergate-focused 93rd Congress and the 100th-103rd Congresses. Public

finance bills were passed by at least one chamber in those two periods, although the latter period

was marked by a move toward downplaying public funds per se in favor of the broader concept of

public benefits. The section concludes with a review of the major features of congressional

proposals, presented as policy options to choose from in devising a congressional public finance

system.

The third section examines the experience of the 16 states that provide some form of public

subsidies to candidates for state office. This section features a table (Table 1) detailing these

systems, and concludes with an analysis of the impact of public finance programs in the states. It

is important to note from the outset, however, that this report does not examine recent

constitutional and other legal challenges to some states’ public financing programs. As

developments in this area become clearer over time, this report will be updated.

The fourth section offers a discussion of public opinion data on support for public financing of

elections, as well as for the related idea of campaign spending limits. Public opinion is not as

extensive on these questions as in the 1970s, when the idea of public financing was particularly

prominent.

The final section reviews the experience from public finance systems at both the state and

presidential levels to offer some overarching observations for Congress possibly to consider in

devising a public finance system for its elections, should it choose to do so.

The report concludes with appendices to augment the information in the section on congressional

proposals. Appendix A is a table (Table A-1) providing details of the public finance (or benefits)

measures that have passed either chamber (from 1973 -1993); because they passed at least one

chamber, these bills are perhaps the most important for Congress to review before beginning a

fresher look at the idea. To allow a more contemporary look at how recent public finance

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Public Financing of Congressional Campaigns: Overview and Analysis

proposals have evolved, appendices provide detailed summaries of public financing legislation

introduced in recent congresses.

What Has Happened Most Recently in Congress?

Two bills that propose to publicly finance congressional campaigns have been introduced in the

112th Congress. Both bills, H.R. 1404 (Larson) and S. 750 (Durbin), are companion measures.

These latest versions of the Fair Elections Now Act (FENA) are substantially similar, with some

changes in proposed benefits to participating candidates, to versions introduced during the 111th

Congress.

A third bill introduced in the 112th Congress, S. 749 (Durbin), provides a separate funding

mechanism for the public financing program proposed in S. 750. Specifically, S. 749 would fund

the public financing program through a 0.5% tax on those holding government contracts of more

than $10 million.

Additional discussion appears in the “112th Congress” section of this report and in Appendix E

at the end of this report.

Underpinnings of Contemporary Congressional Debate

While public financing of congressional elections has been advocated for a century, contemporary

discussions of these proposals are informed by two basic political realities of the past 30 years.

First, the nation has had public financing in presidential elections since 1976. That system serves

both as a model for proposals to extend public financing to congressional elections and as a case

study of how a congressional system might and might not be structured. Second, in striking down

mandatory expenditure limits in 1976 while allowing voluntary limits in the context of a public

finance system, the Supreme Court’s Buckley v. Valeo1 ruling resulted in a closer linkage between

the distinct concepts of public subsidies for election campaigns and limitations on campaign

spending.

Presidential System Since the 1970s: A Model

Since 1976, public funds have helped finance presidential elections, with the level of funds

determined by a taxpayer designations on a voluntary check-off. This system was established

initially under the Revenue Act of 19712 and augmented by the Federal Election Campaign Act

(FECA) Amendments of 1974.3 Candidates who meet eligibility requirements and agree to

voluntary limits on campaign expenditures are eligible for matching funds in the primaries. In the

general election, major party candidates automatically qualify for full subsidies equal to the

spending limit; minor party and independent candidates may also qualify for public funds by

meeting specified criteria. Also, political parties may receive funding for their nominating

424 U.S. 1 (1976).

P.L. 92-178; 85 Stat. 573.

P.L. 93-443; 86 Stat. 3.

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Public Financing of Congressional Campaigns: Overview and Analysis

conventions. Additional discussion of the provisions and evolution of the presidential public

financing program appear in another CRS product.4

Linkage with Spending Limits

At the outset of any discussion on public financing proposals, it is important to address the

question of expenditure limits because, almost invariably, legislative proposals for public funding

are linked with candidates’ adherence to spending limits. (In fact, the absence of spending limits

in some public financing proposals, first offered in the 111th Congress, marks a notable departure

from most proposed public financing programs.) Despite this common linkage, public financing

and spending limits are distinct concepts, with distinct potential benefits and drawbacks. Public

financing of elections, at its core, is aimed at reducing reliance by politicians on private,

interested sources of money for their elections. Expenditure limits are essentially aimed at

curbing rising and, in the view of many, excessive amounts of money spent on elections.

In fact, from the time public financing was first proposed by President Theodore Roosevelt in

1907 until the Supreme Court’s 1976 ruling in Buckley v. Valeo (424 U.S. 1 (1976)), the impetus

for passage stemmed more from the concern over the source of campaign money than the overall

amount spent. In that landmark ruling, the Court struck down mandatory spending limits (such as

those imposed on congressional candidates by the FECA Amendments of 1974), but allowed that

in a voluntary system of public financing, it was permissible to require candidate adherence to

spending limits as a condition of a government-provided benefit (i.e., public funds). 5 Hence,

spending limits in conjunction with public funding would be permissible because candidates

voluntarily accepted them. In light of the Buckley decision, the prevailing view among

policymakers has been that public financing offers the only realistic means of controlling

campaign expenditures in congressional elections, short of enacting a constitutional amendment

to allow mandatory limits (which Congress has refused to support on several occasions).

Finally, it should be noted that some of the goals sought in the public funding and spending limit

measures have been addressed in other legislation, which has been less sweeping yet often with

significant bipartisan support. Proposals to lower campaign costs, without spending limits, have

been prominent in Congress at least until enactment of the Bipartisan Campaign Reform Act of

2002 (BCRA). Bills to provide free or reduced-rate broadcast time and postal rates have sought to

reduce campaign costs and the need for money, without the possibly negative effects of arbitrary

limits. Bills to provide for tax credits for small individual contributions have sought to encourage

a greater role for citizens vis-à-vis organized interest groups. These measures offer the potential

of realizing some of the aims of the more comprehensive measures but without some of the

perceived pitfalls.

CRS Report RL34534, Public Financing of Presidential Campaigns: Overview and Analysis, by (name redacted).

Footnote 65 in Buckley stated: “Congress may engage in public financing of election campaigns and may condition

acceptance of public funds on an agreement by the candidate to abide by specified expenditure limitations. Just as a

candidate may voluntarily limit the size of the contributions he chooses to accept, he may decide to forego private

fundraising and accept public funding.”

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Public Financing of Congressional Campaigns: Overview and Analysis

Arguments Supporting and Opposing Public Financing:

Brief Overview

Supporting

A few major points are common arguments in favor of public financing. Supporters say that

public financing can reduce the threat of political corruption, enhance electoral competition, and

allow candidates to focus on issues rather than raising money. To many observers, the amount of

money spent in elections today is arguably corrupting the political system, forcing candidates and

officeholders to spend increasing amounts of time raising money, possibly creating pressure on

them to rely on affluent individuals and special interests for campaign assistance, conceivably

deterring candidates without personal fortunes from attempting to run for office, and leaving an

impression among some voters that elections are “bought and sold.” Accordingly, one of the most

prominent goals behind public financing is reducing the potential for corruption or the appearance

of corruption. As political scientists Donald A. Gross and Robert K. Goidel have explained,

“Public subsidies to candidates, whether in the form of direct grants or matching funds, are seen

as a way to minimize the undue influence and corruption often ascribed to contributors and

partisan fundraising.”6 Many former lawmakers, interest group representatives, political

professionals, and academic experts submitted written testimony for the McConnell v.

FEC lawsuit heard by a U.S. District Court and the Supreme Court of the United States in their

consideration of BCRA. Some of this testimony included empirical analysis of claims about

potentially corrupting influences from private money in campaign politics and related issues.7

Other public financing goals relate to electoral competition. Public financing provides

candidates—regardless of personal wealth—with financial resources to wage campaigns. 8 This

allows candidates who might not otherwise run for office to do so. As is noted in the discussion of

states’ experiences with public financing, most programs require that candidates demonstrate

political viability before being eligible for funds. If more candidates have access to funds,

supporters say that electoral competition should increase.

Finally, public financing is attractive to some because it is one of the few constitutional ways to

limit campaign spending—a major concern among campaign reformers. Although the Supreme

Court’s 1976 Buckley v. Valeo ruling held that campaign spending generally could not be

subjected to mandatory limits, candidates could be required to limit spending in exchange for

receiving public funding. As is discussed elsewhere in this report, some public financing

systems—including the presidential one—are today in jeopardy because major candidates fear

that observing spending limits associated with public financing will preclude them from spending

enough money to wage competitive campaigns.

Donald A. Gross and Robert K. Goidel, The States of Campaign Finance Reform (Columbus, OH: The Ohio State

University Press, 2003), p. 10.

For an overview of some of this testimony, representing support for and opposition to BCRA, see Anthony Corrado,

Thomas E. Mann, and Trevor Potter, eds., Inside the Campaign Finance Battle: Court Testimony on the New Reforms

(Washington: Brookings Institution Press, 2003).

See, for example, Anthony Gierzynski, “A Framework for the Study of Campaign Finance,” in Joel A. Thompson and

Gary F. Moncrief, eds., Campaign Finance in State Legislative Elections (Washington: CQ Press, 1998), p. 21.

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Public Financing of Congressional Campaigns: Overview and Analysis

Opposing

Objections to public financing are also varied. Many are rooted in philosophical opposition to

funding elections with taxpayer money, compelling taxpayers to support candidates whose views

are antithetical to theirs, and adding another government program in the face of some cynicism

toward government spending. Opponents also raise administrative concerns: how can a system be

devised that accounts for different natures of districts and states, with different styles of

campaigning and disparate media costs, and is fair to all candidates—incumbent, challenger, or

open-seat, major or minor party, serious or “longshot”? Similarly, opponents assert that public

financing could distort elections by imposing the same system on 50 different states with different

degrees of competitiveness in individual races and by providing even greater advantages to

incumbents than already exist, thereby decreasing the competitiveness of elections. In view of the

relatively low rate of participation in the voluntary check-off for the existing presidential system,

they see little evidence that the public would favor such a plan.

Some public financing opponents believe that government-funded campaign subsides amount to

“welfare for politicians,”9 and are an inappropriate use of taxpayer dollars.10 These opponents

argue that public financing could coerce candidates into limiting their campaign spending—

viewed as a form of political speech—in exchange for funding, or that it could force taxpayers to

indirectly fund campaign messages they might find objectionable. On a related note, opponents

suggest that public financing could waste taxpayer money on “fringe” candidates who represent

political views that may be far outside the mainstream and who have little chance of winning

elections.11

In response to arguments that public funding is necessary to limit campaign expenditures, those

opposed to public financing often argue that campaign spending is not high, especially compared

with commercial advertising budgets or spending on consumer goods.12 They argue that worthy

candidates will win public support without government intervention via public financing. Some

researchers also suggest that concerns about rising campaign costs are overstated, and that most

campaign fundraising comes from individuals who give less than the legal limit.13

Finally, opponents of public financing sometimes argue that proponents fail to sufficiently

support their arguments in favor of public financing, relying instead on the “self-evidence” of its

appeal.14 For example, although the appearance of corruption or potential corruption is a common

argument in favor of public financing, political scientists Jeffrey Milyo and David Primo have

found that scholarly research on the topic is limited or anecdotal. The same, they say, is true for

John Samples, ed., Welfare for Politicians? Taxpayer Financing of Campaigns (Washington: Cato Institute, 2005).

See, for example, Thomas M. Finneran, “The Case Against Taxpayer Financing: A View From Massachusetts,” in

John Samples, ed., Welfare for Politicians? pp. 23-30.

See, for example, Chip Mellor, “Three Lessons from Arizona,” in John Samples, ed., Welfare for Politicians? p. 38.

See, for example, Ruth Marcus, “Costliest Race Nears End; Bush, Gore Running Close; U.S. Campaigns Fuel $3

Billion In Spending,” Washington Post, November 6, 2000, p. A1.

See, for example, Stephen Ansolabehere, John M. de Figueiredo, and James M. Snyder Jr., “Why is There so Little

Money in U.S. Politics?” The Journal of Economic Perspectives, vol. 17, no. 1 (winter 2003), pp. 105-130.

Jeffrey Milyo and David Primo, “Reform without Reason? The Scientific Method and Campaign Finance,” in

Welfare for Politicians? pp. 197-211.

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Public Financing of Congressional Campaigns: Overview and Analysis

fears about declining trust in government and declining voter turnout, which some contend could

be buoyed by public financing. 15

Legislative Proposals for Public Financing of

Congressional Elections

While the idea of public financing of federal elections was first proposed in 1907, it was not until

the 1950s that bills were first introduced in Congress to implement such a plan. Since that time,

legislative proposals have been offered in nearly every Congress, while the extent of legislative

activity around the issue has varied according to the political climate and circumstances. In two

very active periods, bills to extend public financing to congressional elections have passed one or

both houses but were never enacted.

In the first period, during the 93rd Congress (1973-1974), the Senate twice passed bills for public

funding in congressional elections, widely seen as a response to the unfolding Watergate

scandal. 16 In 1973, a bill was passed providing full subsidies (equal to mandatory spending limits)

to major party candidates in House and Senate general elections. In 1974, a bill was passed

providing matching funds in House and Senate primaries and full subsidies (equal to the

voluntary spending limits) to major party candidates in House and Senate general elections. Both

provisions were later deleted in conference, in view of some strong opposition in the House.

In the second period, the 100th through 103rd Congresses (1987-1993), the House and Senate

spent considerable amounts of time debating bills that featured the twin ideas of voluntary

spending limits and public financing. In the 101st, 102nd, and 103rd Congresses, both chambers

actually passed such bills; the 102nd Congress bill was vetoed by President George H.W. Bush,

but the bills in the other two Congresses were never reconciled in conference.

In contrast to the first period, when one of the Senate-passed bills covered both primary and

general elections, bills in the second period offered benefits only for general election candidates.

More broadly, efforts in the more recent period reflected a move toward paring down the level of

public treasury funds going to campaigns, in light of a less favorable political climate. The

emphasis in this second period shifted from public funds per se to public benefits. Public benefits

were those either financed with public resources—whether directly, as with public subsidies, or

indirectly, as with revenue forgone from tax incentives or postal discounts—or mandated by

government action, such as requirements for reduced broadcast rates, at no cost to the U.S.

Treasury. The common element was that they all constituted incentives to participation in a

voluntary system based on campaign spending limits.

Ibid.

Robert E. Mutch, Campaigns, Congress, and Courts: The Making of Federal Campaign Finance Law (New York:

Praeger, 1988), pp. 42-51; Frank J. Sorauf, Inside Campaign Finance: Myths and Realities (New Haven: Yale

University Press, 1992), pp. 7-9.

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Public Financing of Congressional Campaigns: Overview and Analysis

Evolution During the Early 20th Century

The earliest suggestion to Congress of public subsidies for election campaigns was apparently

made by President Theodore Roosevelt in 1907 in his annual message to Congress. Roosevelt

saw reforms such as requiring disclosure and prohibiting corporate contributions as worthwhile

but difficult to enforce and inadequate in deterring “an unscrupulous man of unlimited means

from buying his own way into office.” He suggested an admittedly radical approach of providing

ample appropriations to the major national political parties to fund their “organization and

machinery.” Parties receiving federal monies were to be limited to a fixed amount that could be

raised from individual contributors, all of which would be disclosed to the public. It is unclear

from the text of his message (the relevant portion of which is reprinted below) whether Roosevelt

intended this plan to be limited to presidential, as opposed to all federal, campaigns. At the time,

given the political parties’ central role in financing all election campaigns, the distinction may not

have been as great as it would be today, when candidates take the lead role in financing their

campaigns. In any case, the section of the message was titled “Presidential Campaign Expenses.”

Under our form of government voting is not merely a right but a duty, and, moreover, a

fundamental and necessary duty if a man is to be a good citizen. It is well to provide that

corporations shall not contribute to Presidential or National campaigns, and furthermore to

provide for the publication of both contributions and expenditures. There is, however, always

danger in laws of this kind, which from their very nature are difficult of enforcement; the

danger being lest they be obeyed only by the honest, and disobeyed by the unscrupulous, so

as to act only as a penalty upon honest men. Moreover, no such law would hamper an

unscrupulous man of unlimited means from buying his own way into office. There is a very

radical measure which would, I believe, work a substantial improvement in our system of

conducting a campaign, although I am well aware that it will take some time for people so to

familiarize themselves with such a proposal as to be willing to consider its adoption. The

need for collecting large campaign funds would vanish if Congress provided an

appropriation for the proper and legitimate expenses of each of the great national parties, an

appropriation ample enough to meet the necessity for thorough organization and machinery,

which requires a large expenditure of money. Then the stipulation should be made that no

party receiving campaign funds from the Treasury should accept more than a fixed amount

from any individual subscriber or donor; and the necessary publicity for receipts and

expenditures could without difficulty be provided.17

Roosevelt was not exaggerating when he commented that it would take “some time” for people to

familiarize themselves with such a proposal.

From the mid-1920s through the 1970s, select and special committees had been established by

every Congress (predominantly on the Senate side) to investigate campaign expenditures—

presidential or congressional—in recent elections. Reports issued at the conclusion of the work of

these committees often included recommendations designed to correct shortcomings perceived in

existing campaign finance practices. In 1937, during the 75th Congress, the report of the Senate’s

Special Committee to Investigate Campaign Expenditures of Presidential, Vice Presidential, and

Senatorial Candidates in 1936 was released. Included in its section of recommendations was a

proposal for public funding of all federal elections, which the committee passed along without

judgment as to its merits. All private contributions were to be prohibited under this plan. Under

recommendation no. 9, the report said,

Theodore Roosevelt, “Annual Message of the President of the United States,” Congressional Record, vol. 42,

December 3, 1907, p. 78.

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Public Financing of Congressional Campaigns: Overview and Analysis

It has been suggested that private contributions to political campaigns be prohibited entirely

and that instead all election campaign expenses should be defrayed from public funds.18

Congress apparently took no action on this proposal.

Interest in public funding of political campaigns has often been aroused by allegations of

unethical conduct by public officials for accepting particular campaign contributions. Such was

the case on July 6, 1949, when Senator Henry Cabot Lodge, Jr., introduced a resolution to

commission a study by the Committee on Rules and Administration on the mechanics of

establishing a system of public funding of presidential campaigns. In introducing his resolution,

Lodge responded to rumors government corruption.19 The resolution—S.Res. 132—read as

follows:

Resolved. That the Senate Committee on Rules and Administration is authorized and

directed to make a full and complete study and investigation for the purpose of obtaining

such information with respect to the problems involved in financing with governmental

funds presidential election campaigns in the United States as may be necessary to enable the

committee to formulate and report at the earliest practicable date a bill providing for such

method of financing presidential election campaigns. 20

Lodge’s support for this concept, the details of which he envisioned coming out of a

congressional study, was summed up in this excerpt from his floor statement:

All this talk of an “office market,” and of putting high executive and diplomatic positions on

the auction block—all this breeding of suspicion and cynicism would disappear, I believe,

overnight if the primary cause of the evil were obliterated at its root. If no private individual

or officer of a corporation were permitted by statute to contribute one cent to a presidential

campaign there would be a far cleaner atmosphere surrounding political appointments, and

this would encourage public-spirited men holding public office. If there are no bidders, there

can be no auction.21

Lodge acknowledged that the same principle could also be applied to other offices, but he was

limiting his suggestion to presidential races because of the enormous number of appointments to

public office at the President’s disposal. Apparently the type of corruption which motivated

Lodge in S.Res. 132 was the selling of government positions rather than the broader notion of

trading influence or access on policy questions for campaign contributions. A concern over the

latter possibility would be a likely prerequisite for any proposal for public financing of

congressional campaigns. No action was taken on S.Res. 132 by the Committee on Rules and

Administration.

U.S. Congress, Senate Special Committee to Investigate Campaign Expenditures of Presidential, Vice Presidential,

and Senatorial Candidates in 1936, Investigation of Campaign Expenditures in 1936, report pursuant to S.Res. 225 (74th

Cong.) and S.Res. 7 (75th Cong.), 75th Cong., 1st sess., S.Rept. 75-151 (Washington: GPO, 1937).

Mutch, Campaigns, Congress, and Courts, p. 36.

Henry Cabot Lodge, Jr., “Investigation of Problems Involved in Federal Financing of Presidential Election

Campaigns,” Congressional Record, vol. 95, July 6, 1949, p. 8888.

Ibid.

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Public Financing of Congressional Campaigns: Overview and Analysis

First Public Finance Bills

During the 84th Congress, the name of Theodore Roosevelt was invoked when the first public

funding bills were introduced in Congress, almost 50 years after being suggested by Roosevelt.

On February 20, 1956, Senator Richard Neuberger introduced S. 3242, to provide for direct

public subsidies for all major party campaigns for federal office, co-sponsored initially by

Senators Wayne Morse, James Murray, Paul Douglas, John Sparkman, and Mike Mansfield. The

identical bill was submitted two days later in the House as H.R. 9488 by Representative Frank

Thompson. “Sometimes I call my bill the Teddy Roosevelt bill, because of its origin,” observed

Neuberger;22 Thompson commented that the bill could “appropriately, enough, I think be called

the Theodore Roosevelt Campaign Contributions Act of 1956.”23

Neuberger, who quickly became identified as the chief congressional proponent of public

financing at the time, 24 declared that S. 3242 was “the most far-reaching bill ever proposed to

strike loose the financial fetters from our democratic processes of government.”25 The final

impetus for the bill was the recent revelation of a large campaign contribution offered to a

Senator by an oil company during debate on removing federal controls from natural gas prices.

The alleged bribery attempt contributed to Neuberger’s view that,

These contributions, in my opinion, have become an unbearable yoke to many of the men

who must accept them. They even have become onerous and objectionable to the individuals

who parcel out such contributions.26

Neuberger based his proposal on the belief that the system of raising campaign funds from private

sources hampered the independence of public officials, created doubts among the public about the

integrity of the government, and created an inequality in gaining access to voters by various

candidates. He continued in his statement to articulate what would remain the major motivation

for later advocates of publicly financed elections:

An undemocratic element is introduced when one nominee can eclipse his opponent not

because of superiority of ability or of his policies, but merely through a preponderance of

coin of the realm27.... We would not dream of permitting our Presidents or our Senators and

Representatives to draw their pay from a private payroll or in the form of private

contributions; they get paid by the public for whom they act. Why, then, leave their

campaigns for these offices to be lavishly financed from private sources?28

Neuberger’s bill provided for the allotment of federal funds to the major political parties, to be

used for campaign expenditures of its candidates for federal office. (In the 1950s, election

Richard Neuberger, “Federal Campaign Contributions to Relieve Officeholders of Private Obligations,”

Congressional Record, vol. 102, February 20, 1956, p. 2855.

Frank Thompson, “Principle of Campaign Contributions by the Federal Government Supported by Theodore

Roosevelt, Henry Cabot Lodge, Jr., and David Lawrence,” Extensions of Remarks, Congressional Record, vol. 102,

March 6, 1956, p. 4105.

Alexander Heard, The Costs of Democracy (Chapel Hill: University of North Carolina Press, 1960), p. 434.

Richard Neuberger, “Federal Campaign Contributions to Relieve Officeholders of Private Obligations,”

Congressional Record, vol. 102, February 20, 1956, p. 2854.

Ibid.

Ibid., p. 2857.

Ibid., p. 2858.

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financing was still substantially conducted by the parties, in contrast with today, when party

support is considered ancillary to the expenditures of the candidates themselves.) A major party

was defined as one which received at least 10% of the vote in the previous national election. The

total federal contribution for a two-year period would be determined by multiplying 20 cents by

the average number of votes cast in the previous two presidential elections (for presidential

election years) and 15 cents by the average number of votes cast in the previous two House

elections (for non-presidential election years). The system would be conducted on a voluntary

basis and would allow for parties to accept donations from private sources, provided that no

individual’s contribution exceeded $100 and that the total raised from these sources did not

exceed the total federal donation. The term “matching funds” was used by Neuberger to describe

the system, but it differed from the present system of matching funds in presidential primaries in

that the federal subsidy in the latter case is determined by the amount raised privately; in the

Neuberger proposal, the amount that could be raised privately was to be determined by how much

the federal subsidy would be. The proposed system was to be administered by a Federal

Campaign Contributions Board, to include an administrator and one representative from each

major party.

1950s and 1960s

During the 1950s and 1960s, Congress turned its attention to the Federal Corrupt Practices Act,29

the law governing campaign financing since 1925, and to its perceived inadequacies both in

limiting amounts of money raised and spent in elections and in promoting transparency.

Numerous hearings were held and bills introduced aimed at improving the nation’s campaign

finance laws generally. A few bills providing direct public financing were introduced in nearly

every Congress since the 84th Congress (1955-1956), but most of these were proposed and

supported by a small minority of Members. A greater number of proposals, in this period,

however, did include indirect public financing of elections, in the form of tax credits and

deductions.

In 1962, a report was released by the President’s Commission on Campaign Costs, established the

previous year by President John F. Kennedy to make recommendations for improving campaign

finance practices and laws. 30 While the report was ostensibly focused on presidential elections, its

findings were more broadly applicable to all federal elections because of the extent to which the

political parties were at that time the major financiers of all federal campaigns. Its

recommendations, which included tax incentives to encourage individual donations to political

parties, did not include the proposal urged on it by many for direct public subsidies. Rather, the

commission expressed concern for public financing’s potential to discourage citizen participation

in campaigns, to redistribute power arbitrarily within the parties, to encourage fraud, and to be

administered unfairly. However, the commission expressed interest in a “matching incentive

system,” whereby small individual donations to parties would be equally matched with U.S.

Treasury funds. Such a system found favor with the commission because the amount of subsidy

would be determined not by governmental action but by “private voluntary action.”31 The 1962

commission report thus advanced the concept of direct government subsidies of campaigns for

federal office.

43 Stat. 1070.

U.S. President’s Commission on Campaign Costs, Financing Presidential Elections; Report (Washington: GPO,

1964).

Ibid., p. 31-32.

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In 1966, Congress took its first step toward public subsidies in federal elections when it enacted

the Presidential Campaign Fund Act, providing public subsidies to major political parties for their

presidential campaigns. The proposal, sponsored by Senator Russell Long (and which he initially

introduced as S. 3469), was added by the Senate Finance Committee as an amendment to H.R.

13103, the Foreign Investors Tax Act. The act was signed into law November 13, 1966, by

President Johnson, as P.L. 89-809. The following year, amidst congressional pressure to repeal the

act, an amendment was added to the Investment Tax Credit bill (H.R. 6950) to make the act

inoperative until Congress provided written guidelines on how the funds were to be distributed.

With approval of the bill as P.L. 90-26, the Presidential Campaign Fund Act was effectively killed

before it was ever implemented.

Congressional Activity Since the Mid-1960s

90th Congress (1967-1968)

In the 90th Congress, the first public finance bill that covered congressional elections was reported

from committee. As reported by the Senate Finance Committee,32 H.R. 4890, the Honest

Elections Act of 1967, provided for optional public financing for general election campaigns of

presidential, vice presidential, and senatorial candidates (the committee left the extension of the

system to House elections to that body). The system was based on permanent appropriations of

the funding necessary, with the stipulation that no private funds could be raised from 60 days

before to 30 days after the general election. Funds were to be provided directly to candidates, not

through the parties, as earlier bills had done, perhaps in recognition of the onset of candidacies in

the 1960s that were more independent of the party structure. The bill was opposed by the

committee’s six Republican members, who protested its financial burden to taxpayers and its

unfairness to taxpayers who were thus forced to support candidates they opposed. The measure

never came to the Senate for a vote.

92nd Congress (1971-1972)

The 92nd Congress marked a milestone in the federal government’s evolving role in election

finance, with enactment of FECA to replace the Corrupt Practices Act of 1925 as the nation’s

chief statute governing campaign finance and also the enactment of public financing in

presidential general elections. The latter was added as a floor amendment by Senator John Pastore

during Senate consideration of the Revenue Act of 1971. It set up the Presidential Election

Campaign Fund, financed through a $1 tax check-off (as was first enacted in 1966), to fund

presidential general election campaigns. The Pastore amendment also included tax credits and

deductions for political contributions, an indirect form of public financing. The amendment

survived Senate debate and the House-Senate conference; the underlying legislation survived a

veto threat by President Nixon by delaying implementation of the public finance system to the

1976 election. The Revenue Act of 1971 was signed into law December 10, 1971 (P.L. 92-178).

U.S. Congress, Senate Committee on Finance, Honest Elections Act of 1967, etc., report to accompany H.R. 4890,

S.Rept. 90-714, 90th Cong., 1st sess. (Washington: GPO, 1967).

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Public Financing of Congressional Campaigns: Overview and Analysis

93rd Congress (1973-1974)

In the 93rd Congress, public financing of elections became a major and continuing issue before

Congress for the first time, largely in response to the Watergate scandal unfolding in 1973 and

1974. To the extent that large and unaccountable sums of campaign money seemed to be

connected to the scandal, many Members came to see the newly enacted FECA of 1971, which

essentially required uniform disclosure of campaign money, as inadequate in preventing the kinds

of abuses then being uncovered. In addition, public financing of presidential elections was not

due to begin until 1976. Those focusing on campaign finance law amendments came to center on

the ideas of limits on contributions and expenditures, and on extending public financing to

congressional elections. Some 76 bills were introduced in the House and Senate to provide direct

subsidies in congressional elections; in the House, more than 140 Members cosponsored such

bills.

In July 1973, public finance supporters, led by Senators Edward Kennedy and Hugh Scott, tried

to add congressional public funding to the 1973 FECA Amendments. The Kennedy-Scott

amendment (no. 406) to S. 372 would have provided public subsidies in House and Senate

general elections, with major party candidates eligible for a subsidy equal to the proposed

spending limit. The amendment was tabled on a 53-38 vote.33

Later in 1973, the Senate passed public financing of congressional elections, the first time either

chamber had ever done so. It took the form of amendment no. 651, offered by Senators Kennedy,

Scott, and others, to H.R. 11104, the Public Debt Ceiling bill. As added on the Senate floor by a

52-40 vote, the amendment provided for mandatory public financing in House and Senate general

elections.34 Major party House candidates were eligible to receive the greater of 15 cents per

eligible voter, or $90,000; major party Senate candidates were eligible for the greater of 15 cents

per eligible voter, or $175,000; private contributions were essentially eliminated in the general

election (minor party candidates were eligible for funding based on their parties’ vote share in the

previous election). H.R. 11104, as amended, passed the Senate that day by a 58-34 vote. 35 This

provision was removed, however, when the House refused to accept the Senate amendments.36 A

leadership agreement resulted in the matter being dropped from the public debt limit bill and

killing the issue for the first session of the 93rd Congress.37 see Appendix A for details on this

measure.)

By 1974, after a year of the unfolding Watergate scandal, support for public financing of elections

was growing in Congress. In February 1974, the Senate Rules and Administration Committee

reported a new version of the FECA Amendments (in lieu of S. 372), which included public

funding in presidential and congressional primary and general elections. 38 As reported with only

“Federal Election Campaign Act Amendments of 1973,” Debate and Vote in the Senate, Congressional Record, vol.

119, July 26, 1973, p. 26115.

“Temporary Increase in Public Debt Limit,” Debate and Vote in the Senate, Congressional Record, vol. 119,

November 27, 1973, p. 38231.

Ibid., p. 38240.

“Disagreeing to Senate Amendments to H.R. 11104, Public Debt Limit,” Debate and Vote in the House,

Congressional Record, vol. 119, November 29, 1973, p. 38680.

Senate Twice Votes Campaign Financing Reform, Congressional Quarterly Almanac, 1973 (Washington:

Congressional Quarterly, Inc., 1974), vol. 29, p. 754.

General election funding in presidential elections had been enacted by the Revenue Act of 1971, but the formula was

changed in this legislation.

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one dissenting vote, S. 3044 created a system for all federal elections, which is still in place in

presidential elections: a voluntary system, with matching funds in the primaries and a fixed

subsidy in the general election, all funded from the check-off on federal tax returns.39 The

committee report expressed the view then in ascendancy about the need for public funding:

The only way in which Congress can eliminate reliance on large private contributions and

still ensure adequate presentation to the electorate of competing candidates is through

comprehensive public financing.... The election of federal officials is not a private affair. It is

the foundation of our government. As Senator Mansfield recently observed, it is now clear

that “we shall not finally come to grips with the problems except as we are prepared to pay

for the public business of elections with public funds.”40

Senate debate on S. 3044 lasted for 13 days, in which proponents were able to defeat four

amendments to drop public financing completely, two amendments to reduce the level of public

funds, one amendment to reduce funding to incumbents by 30%, and one amendment to add three

free mass mailings to general election candidates. The Senate passed S. 3044 on April 11, 1974,

by a 53-32 vote, 41 following a second, and successful, vote to invoke cloture. (See Appendix A

for details on this measure.)

Public financing of congressional elections, however, was not included in the House

Administration Committee’s reported version of the 1974 FECA Amendments, H.R. 16090.

Supporters, led by Representatives John Anderson and Morris Udall, attempted to add a voluntary

matching system for House and Senate general elections, but their amendment to H.R. 16090 was

defeated by a 187-228 vote.42 Public financing of congressional elections was a particularly

contentious issue in the House-Senate conference on S. 3044, but ultimately it was dropped,

while the presidential public financing provisions were left intact. That bill did, however, leave

spending limits (without public funding) in place for congressional elections, at different levels

than in S. 3044 initially: $70,000 for House primaries and general elections, the greater of eight

cents per eligible voter, or $100,000, in Senate primaries, and the greater of 12 cents per eligible

voter, or $150,000, in Senate general elections.43 Also, limits on spending from personal and

family resources were imposed on House candidates ($25,000) and Senate candidates

($35,000).44

94th Congress (1975-1976)

Activity on behalf of public financing of congressional elections subsided considerably after the

93rd Congress, which had seen particularly strong momentum for governmental and electoral

reforms as the Watergate scandal was unfolding. Public finance supporters did, however, make

several unsuccessful attempts to revive the issue in the 94th through 96th Congresses.

U.S. Congress, Senate Committee on Rules and Administration, Federal Election Campaign Act Amendments of

1974, report to accompany S. 3044, 93rd Cong., 2nd sess., S.Rept. 93-689 (Washington: GPO, 1974).

Ibid., pp. 4-5.

“Federal Election Campaign Act Amendments of 1974,” Debate and Vote in the Senate, Congressional Record, vol.

120, April 11, 1974, p. 10952.

“Federal Election Campaign Act Amendments of 1974,” Debate and Vote in the House, Congressional Record, vol.

120, August 8, 1974, p. 27490.

Those spending limits were declared unconstitutional by Buckley v. Valeo in 1976.

P.L. 93-443.

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Public Financing of Congressional Campaigns: Overview and Analysis

During consideration of the FECA Amendments of 1976 in the 94th Congress, Senate supporters

of public financing failed to get congressional public financing included in the bill reported by the

Rules and Administration Committee (S. 3065). House supporters, led by Representative Phil

Burton, offered a floor amendment to the FECA Amendments (H.R. 12406), providing for

matching funds in House and Senate general elections; the amendment failed on a 121-274 vote.45

95th Congress (1977-1978)

The 95th Congress began auspiciously for public finance supporters with the announced support

of House Speaker Thomas P. O’Neill, Jr., and Senate Majority Leader Robert Byrd, with the

elevation of public finance supporter Frank Thompson to House Administration chairman, and

with a series of election reform measures, including public financing of congressional elections,

by President Jimmy Carter.

The Senate Rules and Administration Committee considered S. 926, which, as introduced by

Senators Kennedy, Dick Clark, Alan Cranston, Charles Mathias, and Russell Schweicker,

proposed matching funds in Senate primaries and a combination of subsidies and matching funds

in Senate general elections. The reported version of S. 926, however, deleted funding for primary

elections, as suggested by sponsors, in order to increase chances for passage in the House. 46

Opposition to public financing was strong enough to force three cloture votes to limit debate on

S. 926. After the final cloture vote failed, the Senate voted 58-39 for an amendment by Senator

James Allen to delete public financing of Senate general elections. 47

The new House leadership support led to six days of House Administration Committee hearings

on public financing of congressional elections, although no consensus developed over what

approach to choose.48 An attempt to report a bill for partial public funding of House general

elections failed in October 1977, after approval of two amendments offered by public finance

opponents which added to the costs of the system and were seen as making the bill more difficult

to pass (one extended funding to primaries; the other extended funding to all candidates who met

a contribution threshold). Following adoption of these amendments, Chairman Thompson

discontinued the markup, saying the votes were lacking to report a measure.49

On two occasions during the second session of the 95th Congress, the House narrowly defeated

rules to allow consideration of public finance measures. An amendment to H.R. 11315, intended

as a non-controversial set of amendments to federal campaign finance law, was offered in March

1978 by Representatives Thomas Foley and Barber Conable, proposing a matching fund system

in House general elections. The underlying bill became embroiled in controversy, however, thus

poisoning the atmosphere for House consideration of the public finance amendment as well.50

“Federal Election Campaign Act Amendments of 1976,” Debate and Vote in the House, Congressional Record, vol.

122, April 1, 1976, p. 9096.

“Public Financing,” CQ Almanac: 95th Congress, 1st Session, 1977 (Washington: Congressional Quarterly, Inc.,

1978), vol. 33, p. 805.

“Public Financing of Senate Elections,” Debate and Vote in the Senate, Congressional Record, vol. 123, August 2,

1977, pp. 26022-26023.

U.S. Congress, House Committee on House Administration, Public Financing of Congressional Elections, hearings,

95th Cong., 1st sess., May 18, 19; June 21, 23, 28; July 12, 1977 (Washington: GPO, 1977).

“Public Financing,” CQ Almanac, 1977, pp. 807-808.

Rhodes Cook, “Bill Lowering Spending Levels Reported,” Congressional Quarterly Weekly Reports, vol. 36, March

(continued...)

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The open rule, allowing for consideration of the Foley-Conable amendment, was defeated on a

198-209 vote on March 21, 1978.51 Included in those voting against the rule were some 25

Republicans who had reportedly committed to voting for the public finance amendment.52

A second effort by public finance supporters came with a proposed amendment to the Federal

Election Commission (FEC) authorization bill for FY1979 (H.R. 11983). The amendment, similar

to the one offered in March 1978, was offered by Representatives Foley, Conable, Anderson, and

Abner Mikva. In contrast with the situation in March, the reported rule was a closed one, thus

prohibiting amendments on the floor. An effort to defeat the proposed rule was made by public

finance supporters, but it failed on a 213-196 vote on July 19, 1978.53 That vote, which observers

saw as reflecting congressional sentiment on public financing, ended consideration of the issue

for the 95th Congress.

96th Congress (1979-1980)

As the 96th Congress began, the House leadership accorded the efforts of public finance

advocates—led by Representatives Foley, Conable, Anderson, Udall, Mikva, and Tim Wirth—

priority status by designating their proposal H.R. 1. Similar to the failed amendments of the 95th

Congress, the bill provided for matching funds in House general elections, in conjunction with

voluntary spending limits. The House Administration Committee held five days of hearings in

March 1979 on this and other public finance bills.54 On May 24, 1979, despite efforts by

supporters to gain more support, the bill failed to be reported, on a 8-17 vote.55 With that vote, the

momentum for extending public financing to congressional elections that had begun in the 93rd

Congress came to an end.

97th-99th Congresses (1981-1986)

While public financing remained an objective for many in Congress and bills continued to be

introduced, the 97th through 99th Congresses saw no concerted effort in pursuit of this goal. In

part, this reflected a changed political environment, with Senate control during this period (19811987) shifting to Republicans, generally less supportive of public financing than Democrats, and

with frustration over the failure to enact public financing in the 93rd through 96th Congresses.

Those advocating campaign finance reform set their sights on a less sweeping goal during the

1980s, and much of the 1990s: restricting the growing role of political action committees (PACs),

the political agents of interest groups, in the financing of congressional elections. Like public

financing, curbs on PACs were intended to lessen the importance of money, particularly

(...continued)

18, 1978, p. 718.

“Providing for Consideration of H.R. 11315, Federal Election Campaign Act Amendments of 1978,” Debate and

Vote in the House, Congressional Record, vol. 124, March 21, 1978, pp. 7879-7880.

“Public Financing, Campaign Spending Bills,” CQ Almanac: 95th Congress, 2nd Session, 1978 (Washington:

Congressional Quarterly, Inc., 1979), vol. 34, p. 771.

“Providing for Consideration of H.R. 11983, Federal Election Commission Authorization, Fiscal Year 1979,” Debate

and Vote in the House, Congressional Record, vol. 124, July 19, 1978, p. 21715.

U.S. Congress, House Committee on House Administration, Public Financing of Congressional Elections, hearings

on H.R. 1 and related legislation, 96th Cong., 1st sess., March 15, 20-22, 27, 1979 (Washington: GPO, 1979).

“Public Campaign Funds,” CQ Almanac: 96th Congress, 1st Session, 1979 (Washington: Congressional Quarterly,

Inc., 1980), vol. 35, pp. 553-556.

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“interested” money, in elections. Unlike public financing, restrictions on PACs did not involve the

highly controversial issue of using tax revenues to fund campaigns and the invariably associated

goal of limits on campaign spending. But, despite 19 days of hearings in the 97th through 99th

Congresses, partisan stalemate on the PAC issue kept any major campaign finance bills from floor

votes.56

100th Congress (1987-1988)

The political environment again shifted in the 100th Congress, with a Democratic majority in the

Senate following the 1986 elections. With this change, the goal of campaign reform advocates

quickly extended from curbs on PACs to their longer-standing objective of public financing and

campaign spending limits in congressional elections. The twin ideas of voluntary spending limits

and participation incentives in the form of public funds or some form of cost-saving benefits

became the cornerstone of the leading reform proposals through the 105th Congress.

On the first day of the 100th Congress, Senate Majority Leader Robert Byrd joined Senator David

Boren in cosponsoring S. 2, which became the focus of reform efforts and eventually gained 50

additional cosponsors. As reported by the Rules and Administration Committee, the bill featured

public funding for Senate general election candidates who agreed to spending limits (in both their

primary and general election campaigns) and aggregate PAC receipts limits for House and Senate

candidates.57 The public funding amount for major party candidates was equal to 80% of the

state’s spending limit for the general election. The measure was brought to the floor in June 1987,

in the face of strong Republican opposition and the stated intention of opponents to filibuster the

measure. After a failed vote to invoke cloture, sponsors of S. 2 offered an amendment to change

the public funding component from a full subsidy for major party candidates to a matching fund

system, thereby reducing in half the cost of the subsidy (and changing the expenditure limit

formula as well). Opponents were not mollified, and four successive cloture votes in June 1987

also failed.

Sponsors made yet another attempt to scale back the public funds component of the bill, in an

effort to gain the needed votes to overcome the filibuster. The second substitute amendment

provided subsidies only to those whose opponents exceeded the voluntary limits, as both a

disincentive to the large spender and as a means of “leveling the playing field.” In addition, the

substitute offered lower postal and broadcast rates to candidates who agreed to abide by the

voluntary spending limits, both as an incentive to participation in the system and as a means of

curbing campaign costs. This change also proved insufficient to ameliorate the opposition, and,

following three additional failed cloture votes, the measure was pulled from further consideration

in February 1988.58

This changed late in the 99th Congress, on August 12, 1986, when the Senate passed the Boren-Goldwater

amendment to curb PACs, although no further action was taken.

U.S. Congress, Senate Committee on Rules and Administration, Senatorial Election Campaign Act of 1987, report to

accompany S. 2, 100th Cong., 1st sess., S.Rept. 100-58 (Washington: GPO, 1987).

Between June 3, 1987, and February 26, 1988, eight unsuccessful cloture votes occurred on June 9, 16, 17, 18, 19,

September 10, 15, 1987, and February 26, 1988.

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101st Congress (1989-1990)

House and Senate leaders offered and enabled passage of bills featuring spending limits and

public benefits (the concept of public financing per se became broadened to public benefits as

Members sought ways to reduce the level of direct treasury funding to campaigns). The Senate

Rules and Administration Committee reported S. 137 (Boren-Mitchell), based on the final version

of S. 2 in the 100th Congress, with spending limits, public benefits, and a PAC receipts cap.59 A

substitute was offered May 11, 1990, reflecting several features aimed at increasing support for a

public benefits and spending limits system. Public funds per se, in the form of direct cash

payments to candidates, were to be triggered only on a contingency basis, to compensate

participating candidates against free-spending opponents and independent expenditures against

them (or for their opponents). The principal subsidy for all participants was to take the form of

broadcast communication vouchers, whereby broadcasters would be reimbursed with federal

funds but no funds would be transmitted directly to candidates. The other benefits were a reduced

broadcast rate, through requiring the lowest unit rate be made available only to participating

candidates (and making such time not subject to preemption), and a reduced postal rate; neither of

these benefits involved direct payments to candidates although the postal benefit did involve

revenue loss to the U.S. Postal Service. Even the spending limits, based on the same populationbased formula as was used in the 100th Congress bill, were adjusted as a means of increasing

Senate support, with the provision for an additional 25% in allowable spending from small instate donors.

Senate debate began July 30, 1990, and encompassed 16 roll-call votes on amendments, including

one by Senator Mitch McConnell to strike public funds entirely (defeated by 46-49)60 and another

by Senator John Kerry to greatly increase the level of public funds (defeated by 38-60).61 On

August 1, 1990, the Senate passed S. 137 on a 59-40 vote, with five Republicans for and only one

Democrat against. It featured voluntary Senate spending limits, communication vouchers, postal

and broadcast discounts, and subsidies to match independent expenditures and wealthy

opponents, plus other campaign finance provisions.62 (See Appendix A for details on this

measure.)

In the House, the Democratic leadership offered a measure which went even further than the

Senate bill in reducing the role of public funds as an incentive to adhering to spending limits. In

exchange for agreeing to spending limits, which were set at $550,000 for a two-year election

cycle (and an additional $165,000 in the case of a nominee who won a competitive primary), H.R.

5400 (Swift) offered House general election candidates three benefits, none of which involved

direct payments to candidates. These included lower rates on first- and third-class mailings in the

last 90 days of an election, one free radio or TV spot for every two purchased, and a 100% tax

credit for in-state contributors (up to $50, or $100 on joint returns). While public funding was

involved in H.R. 5400, it took a less direct form than with candidate subsidies. H.R. 5400 was

U.S. Congress, Senate Committee on Rules and Administration, Senatorial Election Campaign Act of 1989, report to

accompany S. 137, 101st Cong., 2nd sess., S.Rept. 101-253 (Washington: GPO, 1990).

“Senatorial Elections Campaign Act,” Debate and Vote in the Senate, Congressional Record, vol. 136, July 30, 1990,

p. 20329.

Ibid., July 31, 1990, p. 20659.

Ibid., August 1, 1990, p. 21074; the bill also included bans on PACs, party soft money, and bundling, and curbs on

out-of-state money and tax-exempt groups.

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passed by the House on August 3, 1990, by a 255-155 vote.63 (See Appendix A for details on this

measure.)

A conference committee was appointed, but, faced with large differences between H.R. 5400 and

S. 137 and a presidential veto, it never met.

102nd Congress (1991-1992)

Public financing of congressional elections advanced further in the legislative process during the

102nd Congress than ever before or since. Bills comparable to those passed in the 101st Congress

were approved by the Senate and House and reconciled in conference, but vetoed by President

George H.W. Bush.

On March 20, 1991, the Senate Rules and Administration Committee reported S. 3 (MitchellBoren), similar to S. 137 (101st Congress). 64 When Senate debate began May 15, the Boren

substitute amendment was incorporated into S. 3. Debate took place over six days and

encompassed 21 roll-call amendment votes, including one by Senator McConnell to eliminate the

public funding and spending limits from the bill (defeated on a 42-56 vote)65 and one by Senator

Kerry to increase vastly the public funding level in the bill (defeated on a 39-58 vote). 66 On May

23, 1991, the Senate passed S. 3 on a 56-42 vote, with all but five Republicans voting against and

all but five Democrats in favor. 67 As passed, S. 3 included voluntary Senate spending limits, an

extra 25% allowance in spending from small in-state donations, broadcast communication

vouchers, broadcast and postal discounts, and conditional subsidies to match non-complying

opponents and independent expenditures.68 (See Appendix A for details on this measure.)

The House Administration Committee’s Task Force on Campaign Finance Reform led to a

Democratic bill, H.R. 3750 (Gejdenson), reported by the committee on November 12, 1991,69 and

amended by the Rules Committee on November 23.70 The bill replaced the free TV and radio time

and the tax credit in the 101st Congress bill with a matching fund system, while leaving some

form of reduced mailing rates. But concerns over perceived unpopularity of public funding led

sponsors to omit provisions to finance benefits, beyond allowing voluntary contributions to the

Make Democracy Work Fund, in the version brought to the House floor.71 The House passed H.R.

“Campaign Cost Reduction and Reform Act of 1990,” Debate and Vote in the House, Congressional Record, vol.

136, August 3, 1990, pp. 22251-22252.

U.S. Congress, Senate Committee on Rules and Administration, Senate Election Ethics Act of 1991, report to

accompany S. 3, 102nd Cong., 1st sess., S.Rept. 102-37 (Washington: GPO, 1991).

“Senate Election Ethics Act, Debate and Vote in the Senate,” Congressional Record, vol. 137, May 22, 1991, p.

11937.

Ibid., p. 11979.

Ibid., May 23, 1991, p. 12355.

It also included bans on PACs, bundling (discussed below), and party soft money; tax-exempt group curbs; a

requirement that candidates appear in broadcast ads; and a ban on post-election repayments of candidate loans. S. 137

incorporated such floor amendments as an honoraria ban, earned and unearned income limits, and debate requirements

for publicly funded presidential races.

U.S. Congress, House Committee on House Administration, House of Representatives Campaign Spending Limit and

Election Reform Act of 1991, report to accompany H.R. 3750, 102nd Cong., 1st sess., S. 3 (Washington: GPO, 1991).

U.S. Congress, House Committee on Rules, Providing for Consideration of H.R. 3750, report to accompany H.Res.

299, 102nd Cong.,1st sess., H.Rept. 102-365 (Washington: GPO, 1991).

“Two Campaign Finance Bills Passed,” CQ Almanac: 102nd Congress, 1st Session, 1991 (Washington: Congressional

(continued...)

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3750 on November 25, 1991, by a 273-156 vote.72 As passed, it featured voluntary House

spending limits, in exchange for matching funds and lower postal rates, with extra spending for

runoffs or close primaries and extra matching funds to offset non-complying opponents and

independent expenditures.73 (See Appendix A for details on this measure.)

A conference committee was appointed to reconcile the two passed bills and filed its report April

3, 1992 (amended on April 8).74 The conference bill combined features of S. 3 and H.R. 3750,

leaving House and Senate spending limits and public benefits largely intact for their own

candidates. Major changes in the conference version centered around other issues, such as PAC

contribution limits, soft money, and bundling. 75 The conference also delayed implementation of

the spending limits and public funding systems pending enactment of a funding mechanism. (See

Appendix A for details on this measure.) The House passed the conference report on April 9 by a

259-165 vote. 76 The Senate followed suit on April 30 with a 58-42 vote. 77 President Bush, citing

his opposition to spending limits and public financing, vetoed the bill May 9.78 On May 13, a

Senate override vote failed by 57-42, thus ending debate on the issue for the 102nd Congress.79

103rd Congress (1993-1994)

At the start of the 103rd Congress, Democratic leaders introduced bills identical to those in the

102nd Congress: H.R. 3 (Gejdenson) and S. 3 (Boren). With a President of the same party in favor,

1993 reform prospects seemed improved.

On March 18, 1993, the Senate Rules and Administration Committee reported S. 3 (largely the

bill vetoed in 1992, including the House provisions).80 Prior to the Senate debate, President

William J. Clinton made his own recommendations on May 7, 1993, which added such provisions

to the vetoed 102nd Congress bill as congressional broadcast vouchers and an increased tax checkoff financed by an end to lobbying expense deductions.81

(...continued)

Quarterly, Inc., 1992), vol. 47, p. 21.

“House of Representatives Campaign Spending Limit and Election Reform Act of 1991,” Debate and Vote in the

House, Congressional Record, vol. 137, November 25, 1991, pp. 34708-34709.

H.R. 3750 also included an aggregate cap on PAC and large donor receipts, a leadership PAC ban, curbs on party

soft money, and a ban on independent expenditures by lobbyists.

U.S. Congress, Conference Committee, Congressional Campaign Spending Limit and Election Reform Act of 1992,

report to accompany S. 3, 102nd Cong., 2nd sess., H.Rept. 102-479 and H.Rept. 102-487 (Washington: GPO, 1992).

Bundling refers to the collection of campaign funds for a candidate by an intermediary (who is not an agent of the

campaign) in amounts beyond what he or she could legally donate to that candidate.

“Conference Report on S. 3, Congressional Campaign Spending Limit and Election Reform Act of 1992,” Debate

and Vote in the House, Congressional Record, vol. 138, April 9, 1992, p. 9023.

“Senate Election Ethics Act—Conference Report,” Debate and Vote in the Senate, Congressional Record, vol. 138,

April 30, 1992, p. 9964.

U.S. National Archives and Records Administration, Office of the Federal Register, Public Papers of the President

of the United States: George Bush, 1992-1993, vol. 1 (Washington: GPO, 1993), pp. 736-737.

“Disapproval of S. 3—The Congressional Campaign Spending Limit and Election Reform Act of 1992,” Debate and

Vote in the Senate, Congressional Record, vol. 138, May 13, 1992, p. 11146.

U.S. Congress, Senate Committee on Rules and Administration, Congressional Spending Limit and Election Reform

Act of 1993, report to accompany S. 3, 103rd Cong., 1st sess., S.Rept. 103-41 (Washington: GPO, 1993).

U.S. National Archives and Records Administration, Office of the Federal Register, Public Papers of the President

of the United States: William J. Clinton, 1993, vol. 1 (Washington: GPO, 1994), pp. 584-589.

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On May 21, Senate began debate on a leadership substitute to the committee version of S. 3,

focused solely on Senate elections and reflecting the Clinton proposal and a federal PAC ban.

Debate lasted for three weeks, encompassing three cloture votes and 24 recorded amendment

votes. The filibuster was not broken until agreement was reached between Democratic leaders

and seven Republicans to add the Durenberger/Exon Amendment. This provision dropped the

bill’s broadcast vouchers, allowed subsidies only to offset independent spending and spending in

excess of the limits by non-complying opponents, and repealed the exempt function income

exclusion on principal campaign committees of candidates who exceeded spending limits (in

effect, subjecting them to a 34% tax on income). 82 Passage of this amendment cleared the way for

a successful vote to invoke cloture and passage of S. 3 the next day on a 60-38 vote.83 (See

Appendix A for details on this measure.)

The House leadership bill, H.R. 3, was reported from the House Administration Committee on

November 10, 1993, as amended by the committee and focused only on House elections.84 The

reported bill featured voluntary House spending limits and communication vouchers (based on

matching donations); other than contingency funds to compensate for non-complying opponents

and independent expenditures, no other benefits were offered. After defeating a rule to allow

votes on more alternatives, the House, on November 22, 1993, passed H.R. 3 by 255-175.85 (See

Appendix A for details on this measure.)

House and Senate compromise efforts were impeded by differences on PAC limits and funding

sources; both bills avoided establishing a funding mechanism for the public benefits, deferring

implementation until revenue legislation could be enacted. Late in the second session, on

September 29, 1994, Democratic leaders announced a deal, but Senate Republicans led a

filibuster against appointing conferees, ending with a failed cloture vote (52-46) on September

30, 1994.86

104th-109th Congresses (1995-2007)

The shift to Republican control of the House and Senate in 1995 effectively killed the momentum

for public financing in Congress, given generally strong Republican opposition to both public

financing and spending limits. Public finance bills continued to be introduced in every Congress,

including in the 104th when Senators John McCain and Russell Feingold introduced their first

campaign finance reform bill, establishing themselves as the Senate’s leading reform advocates.

That bill (S. 1219) was the successor to the bills passed in the previous three Congresses, and it

reflected the same pre-1996 consensus among campaign finance reform advocates that prioritized

curbing the high cost of congressional elections and replacing private funds with other funding

sources.

“Congressional Campaign Spending Limit and Election Reform Act of 1993,” Debate and Vote in the Senate,

Congressional Record, vol. 139, June 16, 1993, p. 12952.

Ibid., June 17, 1993, p. 13246.

U.S. Congress, House Committee on House Administration, House of Representatives Campaign Spending Limit and

Election Reform Act of 1993, report to accompany H.R. 3, 103rd Cong., 1st sess., H.Rept. 103-375 (Washington: GPO,

1993).

“House of Representatives Campaign Spending Limit and Election Reform Act of 1993,” Debate and Vote in the

House, Congressional Record, vol. 139, November 22, 1993, pp. 31792-31793.

“House of Representatives Campaign Spending Limit and Election Reform Act of 1993,” Debate and Vote in the

Senate, Congressional Record, vol. 140, September 30, 1994, p. 26962.

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The election of 1996 proved to be a watershed in the campaign finance debate, as largely

unregulated campaign activity (party soft money and election-related issue advocacy) seemed to

overshadow the regulated activity. In response, the leading reform advocates in Congress made

significant changes in their proposed legislation at the start of the 105th Congress. S. 25 (McCainFeingold), as well as its companion H.R. 493 (Shays-Meehan), added provisions to the

comparable 104th Congress bills to allow federal regulation of election-related activity then being

conducted as “issue advocacy.” Following the most intensive congressional activity on campaign

finance reform since the 1970s, a revised S. 25 was offered in the fall of 1997, featuring

provisions on party soft money and issue advocacy. What was striking was that the provisions on

congressional spending limits and public benefits, and on PACs, the key elements of reformers’

objectives for at least the previous 10 years, were eliminated from the bill entirely. Thus, in one

year’s time, the very nature of the campaign finance debate had shifted from efforts to improve

the existing regulatory system to efforts to save it from becoming meaningless in the face of

newly emerging campaign practices. This debate, in the wake of the 1996 elections, was to last

until 2002, when BCRA, commonly known as McCain-Feingold, was enacted.

109th Congress Bills

Appendix B contains summaries of the four public finance bills introduced in the 109th Congress.

All were House bills, dealing only with House elections.

Two of the bills—H.R. 2753 (Andrews) and H.R. 4694 (Obey)—would have provided public

funding only in the general election. The Andrews bill would have provided up to $750,000

(based on media costs in the district) to candidates who met certain criteria, such as a $100 limit

on individual donations and an 80% in-state funding requirement; but, unlike others introduced,

the bill would have imposed no spending limit. The Obey bill would have established a

mandatory spending limit, based on the median household income in the district, and would have

provided public funds to equal those limits. The benefit would have been financed in part by a tax

on corporate income. The bill provided for fast-track consideration of a constitutional amendment

to allow mandatory spending limits if the limits in the bill were struck down.

The other two bills—H.R. 3099 (Tierney) and H.R. 5281 (Leach)—would have offered benefits

in both primary and general elections. The Leach bill would have provided funds to match

contributions from in-state contributors and would have imposed a $500,000 per election

spending limit. The Tierney bill was the Clean Money, Clean Elections measure, which would

have provided public subsidies equal to the spending limit in the primary and general election,

specified allotments of free broadcast time, and additional broadcast time at 50% of the lowest

unit rate. Candidates would have qualified by raising specified numbers of small donations. (The

clean money model is discussed in greater detail under the States’ Experience section of this

report.)

110th Congress

Five congressional public financing bills were introduced in the 110th Congress: H.R. 1614

(Tierney), H.R. 2817 (Obey), H.R. 7022 (Larson), S. 936 (Durbin), and S. 1285 (Durbin).

Appendix C at the end of this report and the discussion below provide additional detail.

All five bills proposed comprehensive public financing programs, but did so in different ways.

H.R. 2817 (Obey) proposed perhaps the most direct change to the status quo because it would

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have essentially made public financing mandatory in general elections. By contrast, candidates

operating under the other four bills could have chosen to participate in public financing—and

would have had to meet specific criteria to do so. H.R. 1614, H.R. 7022, S. 936, and S. 1285

explicitly proposed public financing for primary elections. Overall, while H.R. 2817 would

replaced the private campaign financing system in general elections, H.R. 1614, H.R. 7022, S.

936, and S. 1285 proposed a benefits package designed to allow publicly financed candidates to

compete within the current system.

The public financing program proposed in H.R. 2817 would only have covered general elections,

but the bill also specifies spending limits for primary elections. H.R. 2817 would have banned

independent expenditures in House elections. By contrast, H.R. 1614, H.R. 7022, S. 936, and S.

1285 proposed “fair fight funds” to counter high-spending opponents and those airing

independent expenditures against participating candidates or in favor of their opponents.

Only S. 1285 received a hearing during the 110th Congress. On June 20, 2007, the Senate

Committee on Rules and Administration heard testimony on the bill from Senators, a former FEC

chairman, and interest group representatives. At that hearing, Senators Durbin and Specter (and

former senator Warren Rudman) testified in favor of the bill, saying that it was a “modest” step

toward reducing the role of money in elections and a means to restoring public trust in

government. In particular, Senator Durbin emphasized what he called an “unsustainable” current

system of private fundraising that potentially separates lawmakers from average voters and

distracts them from policymaking. Minority Leader McConnell testified against the bill, citing

declining public participation in the presidential public financing system and philosophical

opposition to public financing for politicians. Chairman Feinstein and Ranking Member Bennett

both expressed concerns at the hearing about the possibility of “fringe” candidates receiving

public funds. In a letter to committee members, the National Association of Broadcasters (NAB)

expressed “great concern” about proposed LUC reductions for participating candidates and

sections of S. 1285 that would bar broadcasters from preempting candidate advertising and fund

public financing through spectrum usage fees.87

111th Congress

Five congressional public financing bills were introduced in the 111th Congress. 88 Additional

summary material appears in Appendix D at the end of this report. The first bill introduced, H.R.

158 (Obey), would have, essentially, mandated public financing during House general elections

by prohibiting candidate spending other than from a proposed public financing fund. In exchange,

candidates would have received grants designed to cover full campaign costs. H.R. 158 was

virtually identical to H.R. 2817 (discussed above), which Representative Obey introduced during

the 110th Congress.89

Letter from David K. Rehr, president and chief executive officer, National Association of Broadcasters, to Hon.

Dianne Feinstein, Chairman, Senate Committee on Rules and Administration, June 20, 2007.

For additional discussion of prospective issues for the 111th Congress and activity during the 110th Congress, see

CRS Report R40091, Campaign Finance: Potential Legislative and Policy Issues for the 111th Congress, by (name r

edacted); and CRS Report RL34324,Campaign Finance: Legislative Developments and Policy Issues in the 110th

Congress, by (name redacted).

The only substantial differences between the two bills are the effective dates and the sunset date for the constitutional

amendment. In general, H.R. 158 proposes that various elements of the bill take effect after 2012. The sunset provision

would expire in 2026.

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The second bill, H.R. 2056 (Tierney), like H.R. 158, would have required participants to limit

spending. H.R. 2056 was virtually identical to H.R. 1614 (Tierney), introduced in the 110th

Congress. The Tierney bills were traditional “clean elections” measures. They proposed full

public financing for participating candidates, a “seed money” period in which candidates would

demonstrate viability by raising small start-up contributions, and additional funds for

participating candidates facing non-participating opponents or attacks by outside groups.

Three other bills, H.R. 6116 (Larson), H.R. 1826 (Larson) and S. 752 (Durbin), proposed an

alternative to the bills discussed above: voluntary public financing that would have provided a

base subsidy and matching funds. These three bills were the focus of most attention thus far in the

111th Congress. The Committee on House Administration held a hearing on H.R. 1826 during the

first session of the 111th Congress. In September 2010, the committee marked up a successor bill,

H.R. 6116, and ordered it reported favorably to the House. 90 No additional legislative action

occurred.

Candidates would have received a variety of incentives to participate in public financing under

H.R. 6116, H.R. 1826, and S. 752. Under both House versions of FENA, publicly financed

candidates would have received two major benefits to finance their campaigns: a base subsidy

and a 400% match of small contributions of $100 or less. These bills were substantially similar to

the versions of the Fair Elections Now Act introduced in the 112th Congress. Additional

discussion appears below.

112th Congress

The two current versions of the Fair Elections Now Act, also known as FENA (S. 750 and H.R.

1404), are similar to H.R. 6116 (which superseded H.R. 1826) and S. 752 from the 111th

Congress. Like their predecessors, the current versions of FENA propose to provide participating

candidates with a mix of base subsidies, matching funds, and other incentives in exchange for

limiting private fundraising to small contributions. The discussion below and bullet-point

summary in Appendix E at the end of this report provide additional information.

Major Provisions of Current FENA Proposals

Neither S. 750 nor H.R. 1404 would require participating candidates to limit their spending—

provided that the campaign spent no funds beyond the public financing allocation and smalldollar contributions (i.e., $100 or less). The legislation would, however, limit other forms of

spending. In particular, party coordinated expenditures (except, in some cases, in the Senate bill),

joint fundraising, and leadership political action committee (PAC) activities would all be limited

or prohibited under the current FENA proposals.

Publicly financed House candidates would receive two major benefits to finance their campaigns:

•

a base subsidy of 80% of the national average of spending by winning House

candidates during the previous two election cycles (approximately $1.1 million91

based on 2010 and 2008 data; and

See U.S. Congress, House Committee on House Administration, Fair Elections Now Act, 111th Cong., 2nd sess.,

December 21, 2010, 111-691 (Washington: GPO, 2010).

CRS calculated this figure based on data provided by the FEC.

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•

a 500% match of small contributions of $100 or less raised from individuals

(capped at 300% of the base subsidy).

Under S. 750, Senate candidates would be eligible for

•

a base subsidy of $750,000 plus $150,000 for each congressional district in the

state;

•

a 500% match of small contributions of $100 or less raised from individuals

(capped at 300% of the base subsidy); and

•

broadcast vouchers equal to $100,000 for each congressional district in the state.

In addition, the Senate bill would not limit coordinated party expenditures made on behalf of

publicly financed candidates—if the funds used for those expenditures came from individual

contributions of no more than $500.

Summarizing Differences Between the House and Senate Versions of FENA

As noted previously, the House and Senate versions of FENA are substantially similar. Notable

differences between the bills are summarized below.

•

H.R. 1404 would apply only to House campaigns. S. 750 would apply only to

Senate campaigns.

•

The base subsidies in the House and Senate bills would be allocated differently,

as noted above. The House bill would base the allocation on the winning average

spending by previous House candidates; the Senate bill would allocate the base

subsidy by a formula that emphasizes more funding for candidates from states

with multiple congressional districts.

•

Broadcast provisions in the bills vary. Unlike the House bill, the Senate bill

would provide broadcast-advertising vouchers of $100,000 for each

congressional district in the state. The House bill contains no voucher provisions.

The Senate bill would also extend the lowest unit charge (LUC, also called the

lowest unit rate) to national party committees. (The LUC guarantees candidates

the ability to purchase broadcast advertising at the cheapest available rates.)

Participating candidates would receive a 20% discount on the current LUC, and

time purchased under LUC provisions could not be preempted. The House bill

contains no LUC provision.

•

Unlike the House bill, the Senate bill would permit unlimited coordinated party

expenditures if those expenditures were funded by individual contributions of no

more than $500.

•

The two bills would be financed differently. H.R. 1404 would finance the

proposed public financing program through appropriations, unused allocations

from previous elections, and penalty amounts. S. 749, a stand-alone measure,

would fund the public financing program proposed in S. 750 through a 0.5% tax

on government contracts of more than $10 million. The tax could not exceed

$500,000 annually.

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Public Financing of Congressional Campaigns: Overview and Analysis

Major Differences Between Versions of FENA Introduced During the 111th and

112th Congresses

The 112th and 111th Congress versions of FENA are substantially similar. Notably, however, there

are a few major differences. They are summarized below.

•

The matching rate proposed in the 111th Congress was 400% instead of the

current 500%.

•

Matching-fund benefits in the 112th Congress versions of the bill would be

capped at 300% of the base subsidy, unlike the 111th Congress cap of 200% of the

base.

•

For Senate campaigns, S. 750 would not limit coordinated party expenditures

made on behalf of publicly financed candidates—if the funds used for those

expenditures came from individual contributions of no more than $500. No such

provision was included in the 111th Congress versions of FENA.

•

Broadcast provisions in the bills vary. In particular, previous proposals regarding

spectrum auctions have been omitted for the 112th Congress versions of the

legislation. H.R. 1404 also omits lowest unit charge provisions found in previous

versions of the legislation (although some of these provisions were also excluded

from H.R. 6116 during the 111th Congress). As noted previously, broadcastvoucher provisions have also changed.

Devising a Congressional Public Finance System:

Options for Policymakers

Based on the previous discussion of proposals that advanced in the legislative process, one can

see the wide range of features that any public finance proposal might embody. This section

discusses some of the basic options facing Congress in any consideration of such proposals.

(Further potential considerations for congressional public financing are discussed in the

conclusion of this report. These considerations are based in part on experiences in the states,

which are discussed in the following section.) CRS takes no position on any of the options

presented here.

Setting Expenditure Limits

Establishing the limits on campaign expenditures is perhaps the thorniest aspect of devising a

public financing system. It has become widely accepted in the political science community that,

to the extent that high spending in elections reflects a desirable level of competitiveness, low

spending limits can inhibit real competition.92 In other words, low spending limits may reduce the

chances for lesser known candidates to defeat candidates with higher visibility and name

recognition. It was this principle that has often led public finance and spending limit proposals to

be labeled by critics as “incumbent protection” measures, because incumbents typically start

elections with much higher visibility than their challengers.

See, for example, Gary C. Jacobson, Money in Congressional Elections, pp. 183-190; Citizens Research Foundation,

New Realities, New Thinking: Report of the Task Force on Campaign Finance Reform, pp. 18-19 (Majority Views).

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Spending limits for House campaigns have almost always been a specified across-the-board

amount ($600,000 in the last bill to pass the House, in 1993), whereas the Senate limits have

generally reflected a population-based formula. As late as 1997 when the initial McCain-Feingold

bill was offered in the 105th Congress, the formula in Senate elections was essentially the same

one incorporated into S. 2 (the leadership substitute) in the 100th Congress (in a general

election—the lesser of: (a) $5.5 million, or (b) the greater of (i) $950,000, or (ii) $400,000, plus

30 cents times the voting age population (VAP), up to 4 million, and 25 cents times the VAP over

4 million; in a primary—67% of general election limit, up to $2.75 million; and for a runoff—

20% of the general election limit).

The challenge for policymakers is to choose a spending limit that takes into account the realities

of today’s campaigns, allowing sufficient opportunity for a genuine competition which serves the

public’s interest. One way to offset potential damage to the vibrancy of the electoral process

resulting from too stringent limits would be to increase the generosity of public funds and

benefits, to lessen the need for both raising and spending money.

As noted above, some legislation proposed in the 111th Congress would not impose spending

limits on participating candidates. This change is reportedly due, at least in part, to concern about

the viability of the spending limits and “rescue funds” following the Supreme Court’s 2008

decision in Davis v. FEC.93 Davis did not consider public financing per se, but its content

regarding additional fundraising for those facing high-spending opponents is potentially

applicable to public financing questions.

Coverage: General Elections Only or Primary Elections, Too?

While the bills that advanced in the 1970s included public funds in the primaries, most measures

in more recent Congresses have covered only general elections. This has been the case not so

much because the sponsors have not favored such coverage but more because of strategic

decisions about the reduced likelihood of enacting a more complicated and more expensive

system. Some have stated that they would settle for public funding in general elections for now

and hopefully later return to the primary issue after some experience with a general election

system. To some, however, the lack of inclusion of primaries may represent a serious flaw in

recent proposals, with the prospect of private money entering the electoral system earlier and

expenditures aimed at influencing the general election made during primaries, all to evade the

restrictions of the general election system. 94 The bills debated in the 100th—103rd Congresses

incorporated the concept of providing benefits only in the general election but conditioning those

benefits on adherence to voluntary spending limits in the primary as well as the general election.

See, for example, Bart Jansen, “Public Campaign Financing Proposal Draws Bipartisan Backing,” CQ Today, March

31, 2009, p. 13. For additional discussion of Davis, see CRS Report RS22920, Campaign Finance Law and the

Constitutionality of the “Millionaire’s Amendment”: An Analysis of Davis v. Federal Election Commission, by (name red

acted); and CRS Report RL34324,

Campaign Finance: Legislative Developments and Policy Issues in the 110th

Congress, by (name redacted).

David W. Adamany and George E. Agree, Political Money: A Strategy for Campaign Financing in America

(Baltimore: The Johns Hopkins University Press, 1975), pp. 179-180.

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Conditions for Receipt of Public Benefits

Invariably, proposals condition receipt of benefits on adherence to voluntary spending limits,

whether solely in the election where the benefits are offered or in the primary as well as the

general election. Most also require candidates to limit spending from personal and immediate

family funds to a specified amount (generally applicable to loans as well). Some bills have added

a requirement that candidates participate in a specified number of debates, and bills that passed in

the 1990s added the requirement that broadcast ads must include closed-captioning. There is

considerable latitude in what conditions may be imposed on candidates participating in this

voluntary system.

Qualifying Requirements

In addition to requiring adherence to spending limits, proposals typically have some sort of

qualifying requirement to prove a candidate is “serious” (i.e., that he or she has some degree of

public support). Most often, the qualifying requirement is a fundraising threshold, comprising

relatively small donations from a specified number of voters in that jurisdiction. Petition

signatures is another option.

Public Funds: Matching Funds or Fixed Subsidies?

This choice may be informed by the experience the nation has had under the presidential system

for the past 30 years, in which matching funds are available in the primaries and fixed subsidies

are offered to candidates in the general election. As is discussed in the next section, the states also

use a mix of these two forms of subsidies.

Fixed subsidies offer the advantage of simplicity and providing candidates greater ability to plan

their campaigns, but, depending on the percentage of the spending limit the grant is intended to

constitute, it can result in a much greater cost (in the presidential system, for example, major

candidates in the general election get a subsidy equal to the spending limit). The matching fund

approach would generally be less expensive and would offer the advantage of linking the receipt

of public money with a demonstration of voter appeal by the candidate. Matching fund systems

may offer the advantage of avoiding complex legislative or regulatory judgments about who is

and is not a “serious” candidate, with the meeting of fundraising thresholds and the continuing

raising of small donations considered an adequate means of so doing. If a matching fund system

is preferred, there is also the consideration of whether funds should match contributions on an

equal basis or a higher percentage (some bills have proposed a two- or three-to-one match, at

least in some circumstances).

Public Benefits Other Than Direct Subsidies to Candidates

Whereas the bills that advanced in Congress during the post-Watergate 1970s were based on

either direct subsidies or matching funds, the most prominent measures of the late 1980s and

early 1990s reflected a move away from direct public funding to candidates. Instead, those bills

featured either more indirect forms of public funding or cost-reducing benefits that did not

involve public funds at all. These indirect public funding and public benefits measures, often

designed to increase chances for passage in the face of perceived public opposition to use of

public funds in elections, offer additional ideas in structuring a spending limits and public

benefits package.

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Indirect Public Funding

Several ideas have gained support in Congress at various times that make use of public funds in

ways other than direct payments from the U.S. Treasury to the candidates, including the

following:

•

Tax credits for contributions to candidates abiding by limits—This could provide

a grassroots fundraising incentive to candidates who agree to limit their

expenditures. Most commonly, this takes the form of a 100% tax credit for

contributions to participating candidates. Such a form of public funding is

determined by citizens’ decisions at the grassroots level, rather than decisions of

a government agency, which supporters see as an important advantage.

Presumably, the prospect of raising small donations much more easily would

provide sufficient incentive for candidates to agree to limit spending. Most

observers of the political system argue that the best kind of political money is

that from individual citizens in small amounts. (It should be noted that from

1972-1986, the federal government allowed tax deductions or credits for political

contributions, but they were eliminated as part of overall tax reform; also, many

states have such incentives applicable to contributions in their elections.)

•

Broadcast vouchers to candidates—The single largest component of the typical

campaign budget (at least for statewide and national offices) and the biggest

single factor in the rise of campaign costs in recent years has been broadcast

advertising. Proposals have been advanced whereby candidates would be

allocated specified amounts of broadcast vouchers, for which broadcasters would

be reimbursed from the federal treasury. Under this plan, public monies do not

get distributed directly to candidates, thus at least ostensibly avoiding some of

the objections to public financing per se while focusing on what many consider

the biggest single problem in campaign financing—the high cost of media.

However, the mechanics of implementing such a plan, particularly in districts

served by high density, high-cost media markets, pose potential concerns in terms

of fairness and the particulars of individual campaigns.

•

Lower postal rates for candidates abiding by limits—Another proposal which

seeks to draw candidates into acceptance of campaign spending limits is one

which offers participating candidates lower postal rates, such as those currently

available to political party committees. This proposal involves public funds, but

only indirectly, because the U.S. Postal Service would have to be reimbursed for

revenue forgone as a result of its implementation. It is not clear to what extent a

lower postal rate may serve as an inducement to candidates to limit spending,

since postage is not a large component in a typical campaign budget, although it

may well be more important in House than Senate races (especially in highdensity media markets where media costs are seen as often prohibitively

expensive). Lower postal rates do offer the advantage of acting to reduce

campaign costs, generally seen as a worthwhile goal, regardless of one’s position

on spending limits or public financing.

Public Benefits Without Public Funds

Proposals that passed in the 101st—103rd Congresses (and the Senate-passed version of the BCRA

(McCain-Feingold) in the 107th Congress) looked to broadcasters to offer some of the incentive

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toward candidate participation. Because of broadcasters’ public interest obligations as part of

their license agreements, sponsors sought to require broadcasters to offer lower rates to

candidates participating in public funding, as a condition of their licenses and at no cost to the

U.S. treasury. (On the basis of this principle, the federal government has since 1972 required

broadcasters to charge political candidates at the lowest unit rate (LUR) available to commercial

advertisers for the same time and class of advertising time.) Some proposals have gone beyond

requiring still-lower rates to requiring broadcasters to provide specified amounts of free time to

participating candidates. To the extent that these costs are removed from candidates, the overall

cost of elections could be significantly curbed, which, as with lower postal rates, would appeal to

many observers regardless of their views on spending limits and public financing. Yet such

proposals invariably invite strong opposition from the broadcast industry. While the Senate

version of BCRA in the 107th Congress offered substantial reductions in broadcast rates to

candidates, this provision was removed in the House on a floor amendment.

Protecting Participants from Free-Spending Opponents and Outside Groups

One concept present in most bills offered since the 100th Congress but absent from the

presidential system is protection offered to candidates who participate in public financing but are

faced with large expenditures by non-participating opponents or are targeted in independent

expenditures from outside groups. Most commonly, provisions designed to remedy such

situations would:

•

increase spending limits on participants to match expenditures by opponents in

excess of the spending limits and by independent expenditures in amounts above

a specified level; and/or

•

provide participants with additional public funds to match excessive spending

from non-participating opponents or for opposing independent expenditures,

perhaps with a cap on overall funds provided in this circumstance.

Providing additional funds, or allowing for supplementary private funding, to participating

candidates facing non-participating opponents offers protection against being greatly outspent and

presumably would deter candidates considering forgoing public financing. A potential problem

with these disincentives is the increased costs they would add to a public funding system, costs

not easily predictable. What has not been reflected in recent proposals but may have to be

addressed in future ones is the activity by outside groups (such as 527 political organizations) that

spend money outside the purview of federal election law (i.e., soft money).

Other Disincentives Toward Non-Participation

While public finance bills have typically focused on offering benefits as an inducement toward

agreeing to expenditure limits, more recent proposals have also looked to add disincentives as

well, to impose some sort of penalty on candidates not participating in the system (beyond

providing benefits to the participating opponent). These proposals appeal to those who would like

to lessen the role of public funds but still wish to achieve meaningful levels of participation in the

system. Critics see these proposals as heavy-handed measures designed to bludgeon candidates

into participating, thus casting doubts on whether participation can fairly be deemed to be

voluntary. Some of the disincentives advanced in recent years include the following:

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•

requiring a disclaimer on campaign advertisements of a candidate’s nonparticipation—This provision, requiring non-participants to state in their ads that

they do not abide by spending limits, was included in Senate bills passed in the

101st -103rd Congresses;

•

disallowing lowest unit rate requirement for non-participants—This provision,

included in the 101st Congress Senate bill, as passed, would have removed the

lowest unit rate requirement for candidates not participating in the system; and

•

tax campaigns of non-participating candidates—Political campaigns are

generally exempt from paying taxes on money raised. 95 The Senate bill passed in

the 103rd Congress removed the exempt function income exclusion on principal

campaign committees of candidates who exceeded spending limits, thus in effect

subjecting those campaigns to a 34% tax.

Conditional Public Subsidies

One idea closely related to the proposals in the prior two sections is to provide public funds only

as a last resort, when a participant is faced by an opponent who exceeded spending limits or by

opposing independent expenditures. As is explained in the “State Experiences” section that

follows, some states feature such a provision, aimed at curbing arguably excessive campaign

spending without incurring the expense to the taxpayers that most public finance systems would

incur. It would be applied on a very selective basis and would presumably act as a strong inhibitor

against only the most excessive campaign spending. The Senate bill passed in the 103rd Congress

contained this feature, in addition to the direct incentives of lower postal and broadcast rates.

Paying for Public Financing

Clearly, the decisions made about the aforementioned variables will determine the cost of any

public finance system. Estimates of costs of public finance systems vary considerably, according

to the details of the systems envisioned. For bills considered in the 101st—103rd Congresses, one

can look to the required Congressional Budget Office (CBO) cost estimates, bearing in mind that

the bills passed were often changed substantially from those reported and for which estimates

were provided. At the start of the 103rd Congress, the Senate Rules and Administration Committee

reported S. 3, which was essentially the bill vetoed during the 102nd Congress and thus contained

provisions affecting both House and Senate elections. Benefits for House elections consisted of

matching funds (accounting for up to one-third of the spending limit) and reduced mailing rates;

Senate election benefits consisted of voter communication vouchers (of up to 20% of the general

election limit), reduced mailing rates, and contingent public grants to compensate candidates

opposed by free-spending opponents and by independent expenditures. CBO estimated that this

rather modest system (in terms of level of public funds) would range in cost from $90 million to

$175 million in the 1996 election cycle and from $95 million to $190 million in the 1998 election

cycle. 96

See CRS Report RS21716, Political Organizations Under Section 527 of the Internal Revenue Code, by (name red

acted), Political Organizations Under Section 527 of the Internal Revenue Code, by Erika Lunder.

U.S. Congress, Senate Committee on Rules and Administration, Congressional Spending Limit and Election Reform

Act of 1993, report to accompany S. 3, 103rd Cong., 1st sess., S.Rept. 103-41 (Washington: GPO, 1993), p. 40.

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At the other extreme, the most generous proposal currently being advanced at both federal and

state levels is the “Clean Money, Clean Elections” measure, advocated by interest group Public

Campaign. H.R. 1614 (Tierney, 110th Congress), S. 936 (Durbin, 110th Congress), S. 1285

(Durbin 110th Congress), H.R. 3099 (Tierney, 109th Congress), and S. 719 (Wellstone, 107th

Congress) are variations on the clean elections model and would (or would have) provide public

funds in the primary and general elections; such funds are intended to lower all candidate

spending in those elections. Public Campaign’s website states,

The cost of implementing such a system for Congressional elections is estimated to be less

than a billion dollars per year out of a federal budget of close to two trillion dollars (that’s

about a half of a 10th of a percent of the federal budget: 0.05%). That amounts to less than

$10 per-taxpayer, per-year. 97

Thus, by Public Campaign’s estimates, congressional elections would cost somewhat less than $2

billion every election cycle.

Most proposals since the mid-1970s have relied upon a tax check-off, based on the presidential

model, whereby taxpayers could designate a certain number of tax dollars to go into the fund to

pay for congressional elections. This idea is intended to mitigate negative images that might arise

from “taxpayer funding” of elections, because of the direct role provided citizens in the

distribution of tax revenues. Because of those perceptions, however, the 101st—103rd Congresses

sought creative ways to offset any losses to the U.S. Treasury, or remained silent on funding

sources, leaving those decisions to subsequent “enacting legislation.” Proposals since that time

have looked to such things as broadcast licensing fees, a tax on lobbyists, and a tax on corporate

income to offset treasury losses.98

State Experiences with Public Financing

Introduction

State public financing programs emerged primarily in the 1970s, although a few states provided

limited assistance to campaigns early in the 20th century.99 Prior to the 1970s, many programs that

did exist provided funding to political parties rather than directly to candidate campaigns. (As

noted previously, political parties were historically the major funders of congressional campaigns,

Public Campaign, “Annotated Model Legislation for Clean Money/Clean Elections Reform” at

http://www.publicampaign.org/modelbill.

According to Public Campaign, in the previously cited material, “Revenue for the Clean Money/Clean Elections

Fund could come from some combination of these and other sources: the qualifying contributions collected by

participating candidates, an income tax check-off system (similar to the one in place for presidential elections), a highly

publicized program of voluntary contributions, and direct government appropriations to make up the balance of what is

needed. The Clean Money/Clean Elections program could be offset (thus requiring no tax increase) by the elimination

of unnecessary tax exemptions and other subsidies previously granted to major campaign contributors. It is estimated

that such subsidies currently cost taxpayers far more than what it would cost to provide full public financing under a

Clean Money/Clean Elections system.”

Donald A. Gross and Robert K. Goidel, The States of Campaign Finance Reform, p. 5.

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especially before the 1960s.) States vary considerably in whether they offer public financing, how

they do so, and why.100

Sixteen states offer some form of direct public financing to candidates’ campaigns (see Figure

1).101 Of those, seven states fund only statewide races (Florida, Maryland, Michigan, New

Mexico, North Carolina, Rhode Island, and Vermont). Nine states fund legislative and statewide

races (Arizona, Connecticut, Hawaii, Maine, Massachusetts, Minnesota, Nebraska, New Jersey,

and Wisconsin; see Figure 2), although which statewide campaigns are eligible for funding

varies. Some state public financing programs have been, or are, subject to litigation—a topic that

is beyond the scope of this report.

100

David Schultz, ed., Money, Politics, and Campaign Finance Reform Law in the States (Durham, NC: Carolina

Academic Press, 2002), p. 19.

101

CRS obtained information about states’ public financing programs from various academic publications, publications

from independent research organizations, interest groups, and consultations with individual scholars and researchers.

Jennifer Drage Bowser at the National Conference of State Legislatures, and Steven M. Levin at the Center for

Governmental Studies provided helpful background information for the original version of this report. Several

academic researchers also provided extensive consultations about public financing and potential data sources. Sources

appear in notes accompanying Table 1. In some cases, consulted sources included organizations or scholars who have

publicly supported or opposed public financing. Also, sources sometimes provided different accounts of public

financing in each state. CRS contacted campaign finance officials in the states listed in Table 1 to clarify cases of

incomplete or contradictory information found in other sources. Notes accompanying Table 1 provide additional

information about alternative interpretations from other sources. The number of states offering “public financing”

depends on how the term is defined, and whether assistance to candidates or candidates and parties is included. For

example, according to a 2006 media account, seven states offer public financing, although the definition of “public

financing” or source for this information was not provided. See Elana Schor, “GOP Senator eyes public financing bill,”

The Hill, February 22, 2006, p. 3. A 2006 report by the Center for Governmental Studies noted that “different forms” of

public financing exist in “25 states and 13 local jurisdictions.” See Steven M. Levin, Keeping It Clean: Public

Financing in American Elections (Los Angeles: Center for Governmental Studies, 2006), p. x. See also Steven M.

Levin, State Public Financing Charts 2007 (Los Angeles: Center for Governmental Studies) at http://www.cgs.org/

images/publications/pub_fin_state_2007.pdf, p. 2, which refers to “23 states that have public financing programs.” A

2005 Common Cause analysis identified 14 states that “provide direct public financing to candidates,” and 10 others

that “provide minimal public financing to candidates and/or political parties.” See “Public Financing in the States” at

http://www.commoncause.org/site/pp.asp?c=dkLNK1MQIwG&b=507399.

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Figure 1. States Offering Public Financing

Source: CRS research on state public financing programs as discussed elsewhere in this report.

States have chosen two major public-financing frameworks. First, the “clean money, clean

elections” model (hereafter, clean money) is a national initiative developed by an interest group

and is designed to cover full campaign costs.102 Clean money programs generally offer fixed

subsidies to candidates once they meet basic qualifying requirements. All qualifying candidates

receive the same amount of funding, which is, at least in theory, sufficient to cover all campaign

costs.103 Clean money programs also typically make additional funding available on a

contingency basis to counter spending by non-participating opponents. 104 All clean money

programs are similar, with adaptations in each state (e.g., which offices are covered).

102

This report uses the terms “clean money” and “clean elections” in reference to the interest group Public Campaign’s

title for its public financing model. The terms are also widely used in state public financing laws and in general

campaign finance parlance. The U.S. General Accounting Office (now the Government Accountability Office) has

taken a similar approach in using the term “clean elections” in its research. See U.S. General Accounting Office,

Campaign Finance Reform: Early Experiences of Two States That Offer Full Public Funding for Political Candidates,

GAO-03-453, May 2003, p. 79, footnote 4. This CRS report takes no position on whether such labels are appropriate.

103

Exceptions vary by state. In some cases, third-party or independent candidates are not eligible for as much funding

as are major-party candidates.

104

The constitutionality of rescue funds has become a recent topic of debate following the U.S. Supreme Court’s ruling

in Davis v. Federal Election Commission. In that case, which considered the constitutionality of the so-called

“Millionaire’s Amendment,” the Court held that the amendment’s “asymmetrical” disclosure requirements and

contribution limits violate the First Amendment. Some observers have suggested that the Davis opinion could also

preclude providing rescue funds to only certain candidates in a public-financing setting. In July 2008, a North Carolina

judicial candidate and a PAC petitioned the U.S. Supreme Court for review of a Fourth Circuit opinion (Duke v. Leake)

upholding the legality of North Carolina’s rescue-funds provisions. Davis is 554 U.S. ___ (2008). The slip opinion is

(continued...)

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Second, and in contrast to the clean money model, other state public financing mechanisms vary

considerably. These programs are typically older, and developed more individually. Through

matching funds and other benefits, these programs are designed to reduce the need for and impact

from private fundraising, but are less likely than clean money programs to offer full public

financing to participating candidates. States fund both approaches through a combination of tax

check-offs, direct appropriations from state legislatures, revenues from various fines and fees, and

other sources. Additional details are discussed below.

Figure 2.Types of Public Financing Offered in the States

Source: CRS research on state public financing program as discussed elsewhere in this report.

Types of Public Financing

As Table 1 and Figure 2 show, seven states offer some form of the clean money model of public

financing. The clean money model offers full public financing to candidates who agree to certain

restrictions, particularly spending limits. Candidates who agree to those restrictions, which vary

by state, receive public funds via fixed subsidies. Specific amounts are determined by each state.

The plan originated with the interest group Public Campaign, which describes itself as “a nonprofit, non-partisan organization dedicated to sweeping reform that aims to dramatically reduce

the role of big special interest money in American politics.”105 The group advocates the clean

(...continued)

available at http://www.supremecourtus.gov/opinions/07pdf/07-320.pdf. For an overview of the case, CRS Report

RS22920, Campaign Finance Law and the Constitutionality of the “Millionaire’s Amendment”: An Analysis of Davis

v. Federal Election Commission, by (name redacted). On the Court’s comments on public financing, see pp. 3-4 of

the report.

105

Public Campaign, “About Us” at http://www.publiccampaign.org/about/index.htm.

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money program at the local, state, and federal levels around the country. Currently, clean money

programs in Arizona, Connecticut, Maine, New Jersey (a pilot legislative program), New Mexico,

North Carolina, and Vermont offer public financing to the candidates for the offices noted in

Table 1. Although all clean money programs are adapted to states’ individual needs (e.g.,

different offices are covered in each state), the major components of the program are similar

nationwide. All programs were approved by voters or state legislatures between 1997 and 2005

(some have since been amended).

By contrast, 10 states offer public financing through programs other than the clean money model:

Hawaii, Florida, Nebraska, Maryland, Massachusetts, Michigan, Minnesota, New Jersey

(gubernatorial campaigns), Rhode Island, and Wisconsin.106 While the clean money system

features a uniform model for public financing and is a relatively recent initiative, other public

financing programs in the states vary widely. Many of the latter programs were initiated in the

1970s, in the Watergate aftermath. Some of the most notable differences between clean money

models and other programs are how candidates receive public funding and how much money is

available to those candidates. Although clean money funds are generally distributed through

subsidies that allocate fixed amounts to candidates, states that employ other programs rely

primarily on matching funds. The amount of matching funds candidates receive depends on the

amount of private contributions raised. States generally match 100%, and sometimes more, of the

amount a candidate raises through private contributions.

Whether clean money models or other systems, public financing programs do not guarantee

unlimited funds. States generally limit the percentage of contributions that may be matched, or

cap the total amount of funds that may be disbursed. 107 Available revenues often influence these

decisions. For example, in Michigan, a tax check-off system funds public financing for qualifying

gubernatorial candidates. Just as in the presidential public-financing system, general-election

funding in Michigan takes priority. Funding is first reserved for general-election subsidies. If

additional funds are available, primary candidates may qualify for matching funds, which are

distributed on a pro-rated basis.108

Eligibility and Conditions for Public Funding

Proponents of public financing generally argue that unlimited private funding encourages

corruption, or at least forces candidates to spend too much time raising money. Therefore, states

often require that recipients of public funding observe certain conditions on campaign conduct,

which are designed to increase public confidence in campaigns and limit or eliminate large

amounts of time spent raising private funds. Publicly financed candidates must agree to limits on

spending and fundraising. Some states also require publicly financed candidates to participate in

debates. Public funding recipients must demonstrate that they are politically viable by raising a

minimum level of private contributions before becoming eligible for public funding. Some states’

individual contributions are limited to as little as $5. Once candidates meet that threshold and

106

New Jersey falls into both categories—clean money and other—because the state offers non-Clean Money funding

for gubernatorial campaigns, and Clean Money funding to legislative candidates participating in a pilot public financing

program.

107

For an overview of the maximum public funding allowed in the states, see Steven M. Levin, Keeping It Clean:

Public Financing in American Elections, “State Table 3.”

108

This information is based on consultations with staff at Michigan’s Campaign Finance Division (telephone

conversation with (name redacted), August 2, 2006).

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other qualifying requirements, they become eligible for public financing. In most cases,

campaigns qualifying for public financing may spend their privately raised contributions directly.

In others, privately raised “seed money” is transferred to a central state fund for redistribution

among all publicly financed candidates.

Participation by Candidates

How widely candidates take advantage of public financing depends largely on whether opponents

choose to participate in public financing, how various states structure their public financing

programs, or both. Public financing programs often become dormant because potential

participants believe that spending limits are too low. In Maryland, for example, although public

financing is available for gubernatorial tickets, no major candidate has accepted that funding

since 1994. Since that time, major candidates have reportedly viewed the 30-cent-per-voter

spending limit as too low to enable effective campaigning.109

Low participation by candidates in public financing does not necessarily mean that the program

fails to influence campaigns. At least one state’s program appears to have the most impact when

public financing is not utilized at all. Nebraska’s public financing program has offered matching

funds to a variety of statewide and legislative candidates since 1992, although it is rarely

accepted. According to Frank Daley, Executive Director of the state’s Accountability and

Disclosure Commission, public financing in Nebraska becomes available only if one candidate

adheres to spending limits while the other does not. If both candidates exceed spending limits, or

if neither candidate exceeds spending limits, neither is eligible for public financing. Essentially,

public financing in the state offers “extra” money for those facing high-spending opponents.

Given the threat of opponents receiving public funds, most candidates have chosen to limit

spending voluntarily. As a result, public financing’s greatest impact in Nebraska appears to be

keeping private spending down, rather than infusing greater amounts of public money into

elections.110

109

Telephone conversations between (name redacted) and Jared DeMarinis, Maryland Director of Candidacy and

Campaign Finance, June 30, 2006, and August 24, 2006. The amount is subject to annual adjustments.

110

Telephone conversation between (name redacted) and Frank Daley, Executive Director of the Nebraska

Accountability and Disclosure Commission, July 31, 2006. For a brief discussion of Nebraska’s program, see also

Michael J. Malbin and Thomas L. Gais, eds., The Day After Reform: Sobering Campaign Finance Lessons from the

American States (Albany, NY: The Rockefeller Institute Press, 1998), p. 60.

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Table 1. States Offering Public Financing to Statewide or

Legislative Candidate Campaigns

State

Arizona

Candidates Eligible for

Funding

Statewide

(Governor, Secretary of

State, Attorney General,

Treasurer, Supt. of Public

Instruction, Corporation

Commissioner, Mine

Inspector)

State Legislature

Connecticut

Statewide

(Governor, Lt. Governor,

Attorney General,

Comptroller, Secretary of

State, Treasurer)

State Legislature

How Candidates

Receive Public

Funding

How Public

Financing

System is

Funded

Fixed subsidy

Tax check-off

Matching funds

(contingency

mechanism, e.g., for

those facing nonpublicly financed

opponents who

exceed spending

limits)a

Various fines/fees

Fixed subsidy

Revenues from

unclaimed

propertyb

Matching funds

(contingency

mechanism, e.g., for

those facing nonpublicly financed

opponents who

exceed spending

limits)

Matching funds

Appropriations

from legislature

Hawaii

Statewide

(Governor, Lt. Governor,

Office of Hawaiian Affairs)

Matching funds

Tax check-off

Maryland

Statewide

(Governor, Lt. Governor)

Congressional Research Service

See table notes.d

Elections-related

fines and fees

State Legislature

Clean moneyb model

Public donations

Statewide

(Governor, Chief Financial

Officer, Attorney General,

Agriculture

Commissionerd)

Statewide

(Governor)f

Clean moneyb model

Qualifying private

contributions

raised by

candidates

Florida

Maine

Notes

Other

miscellaneous

feese

Fixed subsidy

Tax check-off

Matching funds

(contingency

mechanism, e.g., for

those facing nonpublicly financed

opponents who

exceed spending

limits)

Various fines/fees

Matching funds

Tax check-offg

Clean moneyb model

Appropriations

from legislature

Excess qualifying

contributions

raised by

candidates

No major candidate has

participated since 1994,

reportedly due to

spending limits.

Public Financing of Congressional Campaigns: Overview and Analysis

State

Massachusetts

Candidates Eligible for

Funding

Statewide

(Governor, Lt. Governor,

Attorney General,

Secretary of the

Commonwealth,

Treasurer, Auditor)

How Candidates

Receive Public

Funding

How Public

Financing

System is

Funded

Matching funds

Tax check-off

Availability of public

funding depends on the

amount designated by tax

check-offs. Funding is

allocated first to

gubernatorial candidates,

then lower offices, if

available.h

Matching funds

(primary election)

Tax check-off

General election is

funded first. Public

financing for primary, if

available, is then

allocated on a pro-rated

basis.i

State Legislature

Michigan

Statewide

(Governor)h

Fixed subsidy

(general election)

Minnesota

Statewide

(Governor, Lt. Governor,

Attorney General,

Secretary of State,

Auditor)k

Fixed subsidy

Statewide

(Governor, Secretary of

State, Attorney General,

Tax check-off

Appropriations

from legislature

“Public Subsidy”

fundsl

State Legislature

Nebraska

Notes

Matching funds

Tax check-off

Various fines/fees

Initial

appropriation

from legislaturel

Auditor of Public

Accounts, Public Service

Commission, Univ. of

Nebraska Board of

Regents, Board of

Education)

State Legislature

New Jersey

Statewide

(Governor)

Matching funds

Appropriations

from legislature

Tax check-off

New Mexico

State Legislature

(pilot program)n

Direct subsidy

Appropriations

from legislature

Clean moneyb model

Statewide

(Public Regulation

Commission; Judges for

State Court of Appeals,

State Supreme Court

justices)

Fixed subsidy

Appropriations

from legislature

Clean moneyb model

Congressional Research Service

Matching funds

(contingency

mechanism, e.g., for

those facing nonpublicly financed

opponents who

exceed spending

limits)

Various fines/fees

Unspent previous

public financing

moniesn

Public Financing of Congressional Campaigns: Overview and Analysis

State

North

Carolina

Rhode Island

Vermont

Candidates Eligible for

Funding

How Candidates

Receive Public

Funding

Statewide

(Judges for State Court of

Appeals, State Supreme

Court justices; State

Auditor; Insurance

Commissioner;

Superintendent of Public

Instruction)

Fixed subsidy

Statewide

(Governor, Lt. Governor,

Secretary of State,

Attorney General, General

Treasurer)

Matching funds

Statewide

(Governor, Lt. Governor)

Fixed subsidy

How Public

Financing

System is

Funded

Tax check-off

Campaign-related

fees

Notes

Public financing available

only to judicial

candidates. Clean

moneyb model.p

Attorney renewal

fees

Donations

Tax check-off

Appropriations

from legislature

(secondary

source)q

Corporate

reporting fees

(primary source)

Clean moneyb model

Unspent previous

public financing

monies

Tax check-off

Appropriations

from legislature

Public donationsr

Wisconsin

Statewide

(Governor, Lt. Governor,

Attorney General,

Secretary of State,

Treasurer, Supt. of Public

Instruction, State Supreme

Court justices)

State Legislature

Fixed subsidy

Tax check-off

Matching funds for

Supreme Court

candidates

(contingency

mechanism, e.g., for

those facing nonpublicly financed

opponents who

exceed spending

limits)

Availability of public

funding depends on the

amount designated by tax

check-offs.s

Source: CRS research as described in the text above and the following notes.

Notes: Unless otherwise noted, all public financing programs reflected in the table apply to primary and general

elections. The table does not include information on public funding for local candidates.

This information came from Michael Becker, Voter Education Manager at the Citizens Clean Elections

Commission (telephone conversation with (name redacted), Aug. 16, 2006).

The clean money model (often also called clean elections) offers full public financing to candidates who

agree to certain restrictions, particularly spending limits. Public financing programs in Arizona and Maine are

the most prominent statewide examples of this program, advocated by the interest group Public Campaign.

Throughout the table, those programs noted as clean money reflect information on the Public Campaign

website at http://www.publicampaign.org/where, although this does not necessarily mean that there is a

formal connection between Public Campaign and the public financing programs in those states. See also

Janice Thompson, Clean Money Comparisons: Summaries of Full Public Financing Programs (Washington: Public

Campaign, Summer 2006), at http://library.publicampaign.org/sites/default/files/

Clean%20Money%20Comparisons.pdf.

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If property proceeds do not meet public financing needs, the state may appropriate funds from corporate

tax revenues to compensate for the shortfall. See also Janice Thompson, Clean Money Comparisons:

Summaries of Full Public Financing Programs, pp. 25-31.

The 2006 Center for Governmental Studies (CGS) report also refers to “qualifying candidates” for

Lieutenant Governor and Corporations Commissioner as being eligible for public financing. See Steven M.

Levin, Keeping It Clean: Public Financing in American Elections, p. 93. The CGS report also references various

fines and fees to fund the state’s Campaign Financing Trust fund. According to Kristi Reid Bronson, Election

Records Bureau Chief at the Florida Division of Elections, the trust fund no longer exists, although it was

funded by fines and fees. Bronson also reported that public financing—essentially funded by appropriations

from the legislature—is available only to statewide candidates (telephone conversations with (name r

edacted), Aug. 24, 2006; Aug. 1, 2008).

According to public financing information on the Common Cause website at http://www.commoncause.org/

site/pp.asp?c=dkLNK1MQIwG&b=507399, Hawaii’s program is also funded by appropriations. The 2006

Center for Governmental Studies report also refers to “appropriated funds” when summarizing Hawaii’s

public financing system. See Steven M. Levin, Keeping It Clean: Public Financing in American Elections, p. 93.

Based on consultations with staff at Hawaii’s Campaign Spending Commission, only those methods reflected

in Table 1 currently fund the program (telephone conversation between (name redacted) and a staff

member, Hawaii Campaign Spending Commission, July 12, 2006). As the commission’s Public Funding

Guidebook: Candidate Committees explains, the legislature created the Hawaii Election Campaign Fund in

1979. See State of Hawaii, Campaign Spending Commission, Public Funding Guidebook: Candidate

Committees, Jan. 2006, p. i, at http://www.hawaii.gov/campaign/Forms/Publications/CCPublications/

PFGuidebook/Public%20Funding%20Guidebook%20Candidate%20Committees.pdf. This might explain other

references to “appropriations.”

According to Sandy Thompson, a candidate registrar at the Maine Commission on Governmental Ethics and

Election Practices, the Governor is the only statewide elected officeholder (other than federal

officeholders); telephone conversation with (name redacted), Aug. 17, 2006.

The 2006 Center for Governmental Studies (CGS) report also refers to direct appropriations and fines

when summarizing Maryland’s public financing system. See Steven M. Levin, Keeping It Clean: Public Financing

in American Elections, p. 93. Jared DeMarinis, Maryland’s director of candidacy and campaign finance,

reported that a tax check-off system financed the program when it was last utilized (telephone conversation

with (name redacted), June 30, 2006). He also noted, however, that public financing legislation that failed in

2006 would have authorized additional funding sources and extended public financing to legislative

candidates. According to DeMarinis, the same legislation, modeled on the Clean Money framework, is

expected to be re-introduced during a future legislative session (telephone conversation with (name r

edacted), Aug. 24, 2006).

This information is based on consultations with staff at the Massachusetts Office of Campaign and Political

Finance (telephone conversation with (name redacted), July 12, 2006). The 2006 CGS report also refers to

direct appropriations and monies from a previous public financing fund when summarizing funding for

Massachusetts’s public financing system. See Steven M. Levin, Keeping It Clean: Public Financing in American

Elections, p. 93. In 1998, Massachusetts voters, though a ballot initiative, approved a broad public financing

program for the state. That program was based on the Clean Money model. However, the legislature did

not appropriate funds for the program. The law was reportedly repealed in 2003, and replaced with the

current system. See Thomas M. Finneran, “The Case Against Taxpayer Financing: A View From

Massachusetts; and the “Massachusetts” entry on the Common Cause website’s description of state publicfinancing programs at http://www.commoncause.org/site/pp.asp?c=dkLNK1MQIwG&b=507399.

The 2006 CGS report notes that public financing is available to candidates for Governor and Lieutenant

Governor. See Steven M. Levin, Keeping It Clean: Public Financing in American Elections, p. 93. Based on

consultations with staff at Michigan’s Campaign Finance Division, public financing is only available for

gubernatorial candidates (telephone conversation with (name redacted), Aug. 16, 2006). Information posted

on the Common Cause website also suggests that funding is limited to gubernatorial candidates; see

http://www.commoncause.org/site/pp.asp?c=dkLNK1MQIwG&b=507399.

This information is based on consultations with staff at Michigan’s Campaign Finance Division (telephone

conversation with (name redacted), Aug. 2, 2006).

According to Jeanne Olson, Executive Director of the Minnesota Campaign Finance and Public Disclosure

Board, the state’s public financing system provides funding to the gubernatorial ticket, which would include

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the Lt. Governor candidate. The latter office, however, is not allocated separate public financing (telephone

conversation with (name redacted), Aug. 18, 2006).

Public financing monies are distributed from the state’s General Fund, as allocated through the tax checkoff, and an additional appropriation from the state legislature. In addition, candidates agreeing to certain

conditions (e.g., spending limits) may participate in the Public Subsidy program, which provides refunds from

the state for private campaign contributions from individuals (telephone conversation between (name r

edacted) and Jeanne Olson, Executive Director, Minnesota Campaign Finance and Public Disclosure Board,

Aug. 18, 2006). For a brief overview of the Public Subsidy program, see “Public Subsidy Issues,” document

posted on the Minnesota Campaign Finance and Public Disclosure Board website, Nov. 2005, at

http://www.cfboard.state.mn.us/issues/public_subsidy.pdf.

m. The 2006 CGS report refers to direct appropriations, taxpayer contributions of income tax refunds,

“amounts repaid to campaign finance limitation cash fund by candidates,” civil penalties, and late filing fees

when summarizing how Nebraska’s public financing system is funded. See Steven M. Levin, Keeping It Clean:

Public Financing in American Elections, p. 94. Common Cause also lists “appropriations” as a funding source;

see http://www.commoncause.org/site/pp.asp?c=dkLNK1MQIwG&b=507399. In a telephone consultation

with one of the CRS authors, Frank Daley, Executive Director of the Nebraska Accountability and

Disclosure Commission, reported that the legislature provided an initial appropriation of $50,000 in 1992,

but has not done so since. Currently, according to Daley, the tax check-off and various fines and fees are

the only funding sources for public financing (telephone conversation with (name redacted), July 31, 2006).

During the 2005 election cycle, an experimental public financing program was implemented in two General

Assembly districts. The pilot was expanded to three total legislative districts (covering Assembly and Senate

candidates) in the 2007 election cycle. See New Jersey Election Law Enforcement Commission, 2007 Fair

and Clean Elections Report, March 28, 2008, available at http://www.njcleanelections.com/downloads/

ce_report2007.pdf.

Some of the summary information about New Mexico’s public financing program came from the 2006 CGS

report. See Steven M. Levin, Keeping It Clean: Public Financing in American Elections, p. 95. Clean Money

programs generally rely on a grant system to distribute funding. Janice Thompson, a consultant for Public

Campaign, reported that her research suggests that the New Mexico program is funded primarily by utility

fees and taxes (telephone conversations with (name redacted), Aug. 2006), which is consistent with the CGS

findings. The preceding applies to the Public Regulation Commission component of the program, which

became effective for the 2006 election cycle. In April 2007, Governor Bill Richardson signed legislation

extending public financing to elections for state appeals court judges and Supreme Court justices. See Gov.

Bill Richardson, “Gov. Richardson Signs Landmark Public Financing Bill,” press release; April 13, 2007;

accessed April 27, 2007, by CRS Information Professional Zina Watkins via LexisNexis.

Some of the information about North Carolina’s public financing program reflected in the table came from

Jason Schrader, Audit Specialist in the Campaign Finance Division at the North Carolina State Board of

Elections (telephone conversations with (name redacted), Aug. 2006). See also North Carolina State Board of

Elections, 2008-2009 Campaign Finance Manual at http://www.sboe.state.nc.us/content.aspx?id=7. For an

early assessment of North Carolina’s first cycle of public financing for judicial candidates, see Doug Bend,

“North Carolina’s Public Financing of Judicial Campaigns: A Preliminary Analysis,” The Georgetown Journal of

Legal Ethics, vol. 18, no. 3 (summer 2005), pp. 597-609.

The 2006 CGS report lists only a check-off as the funding mechanism for Rhode Island’s public financing

system. See Steven M. Levin, Keeping It Clean: Public Financing in American Elections, p. 97. Rhode Island law

authorizes the state treasury to provide monies from the state’s general fund if “funds generated by the tax

credit ... fail to produce sufficient money to meet the requirements of the public financing of the electoral

system.” See R.I. G.L. § 17-25-29 at http://www.rilin.state.ri.us/Statutes/TITLE17/17-25/17-25-29.HTM. “Tax

credit” in the preceding sentence appears to be a reference to the tax check-off system. Hank Johnson, a

staff member in the Campaign Finance Division at the Rhode Island Board of Elections, confirmed that the

program is financed by the check-off system and general fund revenues distributed by the state treasury

(telephone conversation with (name redacted), August 2006).

According to information from staff at the Vermont Secretary of State’s office, corporate reporting fees are

the major source of funding for the state’s public financing program, and that not all other sources of

funding authorized by statute have been utilized (telephone conversation with (name redacted), Aug. 2006).

Some of this information came from Dennis Morvak, an auditor in the Campaign Finance Division at the

Wisconsin Elections Board (telephone conversations with (name redacted), Aug. 22, 2006). Common Cause

reports that “In recent years, the system has been damaged by a decline in the amount of funds generated

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by the check-off and growing spending on independent expenditures and sham ‘issue ads.’” This report

takes no position on Common Cause’s statement regarding issue advertising. The text of this report

provides additional information on the Wisconsin program, including citations to other critiques.

Impact of Public Financing in the States

Despite recent scholarly research, there is little certainty about how changes in American

campaign finance law affect electoral outcomes. 111 Research on the impact of public financing is

particularly limited, dated, or both. Public financing programs in the states vary widely and were

implemented at different times. Even basic terminology can vary across states. All these factors

limit opportunities for comparing data.112 In answering whether public financing has achieved the

various goals proponents ascribe, one group of scholars wrote in 2006:

The short answer is that nobody knows because there has been no comprehensive evaluation

of public finance systems to identify what conditions and program elements lead to

successful outcomes. The conventional wisdom is based on either a limited amount of data

or anecdotal impression.113

Similarly, much of what is known about public financing is based on relatively narrow

evaluations of particular states or races. Finally, it is important to note that this report does not

examine recent constitutional and other legal challenges to some states’ public financing

programs. As developments in this area become clearer over time, this report will be updated.

Money and Competition

One of the major questions surrounding public financing is whether publicly funded campaigns

are more or less competitive than those that are privately financed. Research often considers at

least two different measures of “competition” surrounding public financing: (1) the amount of

money at each campaign’s disposal; and (2) the margin of victory on election day. In theory,

public financing should foster lower-cost campaigns because public financing generally requires

observing spending limits and reduces fundraising costs. If more candidates have access to

funding through public financing, races might also be closer on election day.114 Evidence on both

fronts is mixed. In general, research suggests that public financing can foster more competitive

elections. However, research on competition and public financing commonly emphasizes that

most public financing programs are in their infancy, and that more time and cases are needed to

draw definitive conclusions.

111

Donald A. Gross, Robert K. Goidel, and Todd G. Shields, “State Campaign Finance Regulations and Electoral

Competition,” American Politics Research, vol. 30, no. 2 (March 2002), pp. 143-145; see also Michael J. Malbin and

Thomas L. Gais, eds., The Day After Reform.

112

For an example of the difficulty in standardizing measures of public financing in campaign finance research, see

Christopher Witko, “Measuring the Stringency of State Campaign Finance Regulation,” State Politics and Policy

Quarterly, vol. 5, no. 3 (fall 2005), pp. 297-298. See also Michael J. Malbin and Thomas L. Gais, eds., The Day After

Reform, chapter 4.

113

Kenneth R. Mayer, Timothy Werner, and Amanda Williams, “Public Funding Programs and Competition,” in

Michael P. McDonald and John Samples, eds., The Marketplace of Democracy: Electoral Competition and American

Politics (Washington: Cato Institute and Brookings Institution Press, 2006), p. 246.

114

On its own, however, public financing limits only candidate spending—not spending by outside groups such as

parties, interest groups, and 527 organizations.

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Public financing does appear to reduce financial disparities among candidates, provided that all

candidates participate in public financing. For example, research on state legislative elections has

found that public financing in Minnesota and Wisconsin decreased financial disparities between

challengers and incumbents.115 More access to money via public funding does not always foster

closer races,116 although it can provide ballot access for candidates who might not otherwise be

able to run.117 From this perspective, public financing provides an avenue to consistent

competition in elections, but not necessarily closer elections. On the other hand, in a comparative

analysis of legislative elections in five states that offer public financing—Arizona, Hawaii,

Maine, Minnesota, and W

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