Election Campaign Financing

Some presidential candidates may receive federal tax dollars to fund their campaigns. Federal funding for presidential campaigns comes in three forms: general-election grants, given to individual candidates; matching funds, given to nominated candidates for primary campaigns; and funding provided to parties for their nominating conventions.

Under the Presidential Election Campaign Fund Act (Fund Act) (26 U.S.C.A. §§ 9001–9013), presidential candidates must meet certain standards in order to obtain federal tax money for their campaigns. The Fund Act distinguishes between major-party candidates and minor-party candidates. For purposes of the act, a major party is defined as any political party that received at least 25 percent of the popular vote in the previous presidential election. A minor party is defined as a political party that received less than 25 percent but more than five percent of the popular vote in the previous presidential election.

Under the Fund Act, a presidential candidate from a major party is entitled to a general-election grant of $20 million plus cost-of-living expenses. In 1996, this amount totaled over $60 million each for President BILL CLINTON and REPUBLICAN PARTY nominee BOB DOLE. This number increased to more than $67.5 million for the 2000 presidential election between GEORGE W. BUSH and AL GORE. The FEC estimate that each party will receive $74.4 million from this grant for the 2004 presidential elections.

Minor-party presidential candidates may receive a general-election grant only if their party had a candidate on the ballot in at least ten states in the previous presidential election, and if that candidate won at least five percent of the popular vote. If a minor-party candidate qualifies, the election grant is equal to the total amount of the general-election grants received by the major-party candidates in the previous presidential election, multiplied by the percentage of popular votes received by the minor-party candidate, divided by the percentage of popular votes received by the two major-party candidates. To illustrate, assume that each of the two major-party candidates received $50 million under the act in the previous election. The minor-party candidate received five percent of the popular vote, and the major-party candidates together received 95 percent of the popular vote. The minor-party candidate will receive $1 for every $19 received by the major-party candidates, or about $5.3 million.

Presidential candidates do not receive general-election grants until after the election.

Some presidential candidates may qualify for additional taxpayer funding for their campaigns. Under 26 U.S.C.A. §§ 9031–9042, the Federal Election Commission may authorize funds to presidential candidates who participated in their party primaries. Under the act, the presidential-campaign fund matches every contribution of $250 or less that was given to the candidate during the primaries. To qualify for these matching funds, a presidential candidate must receive at least $5,000 in contributions from contributors in at least 20 different states. Only contributions of $250 or less may be counted in reaching the $5,000 threshold.

Under the matching-funds provision, no candidate may spend more than a specified amount in each state's primary election campaign. If a presidential candidate is eligible for matching funds and decides to claim them, the candidate may spend no more than $50,000 of his or her own money on the campaign. Candidates must keep specific records and must submit them to the commission for audit. No distinction is made between major and minor parties in determining whether a candidate qualifies for federal matching funds.

Finally, under Section 9008, a political party may receive taxpayer funds to pay for its political convention. Major parties are entitled to $4 million of public funds for their conventions. A minor party is entitled to the same amount that its candidate received under the Fund Act. For the vast majority of minor political parties, this amount is zero, because most minor-party presidential candidates receive less than five percent of the popular vote.

Like private funding, public funding for presidential campaigns is criticized as being biased toward the two major parties. Under the Fund Act, major-party candidates and their parties receive more money than do minor-party candidates and their parties. With more money, major-party candidates can spend more on support staff, advertising, traveling, and personal appearances. By creating these advantages, the federal funding scheme, according to critics, ensures the continued success of the two major parties in presidential campaigns and the continued failure of minor-party candidates.

Generally, advocates of the funding scheme for presidential candidates concede that it favors the two major parties. However, they insist that it should not be expensive for popular candidates to run for president, and that public funding is necessary to ensure that it is not. Defenders note further that the funding scheme does not restrict access to ballots and that it does not prevent people from voting for the candidate of their choice.

Finally, according to defenders of the funding scheme, any claim that the scheme is responsible for the inability of minor parties to win presidential elections is speculative. As the Supreme Court stated in Buckley, "[T]he inability, if any, of minor-party candidates to wage effective campaigns will derive not from lack of public funding but from their inability to raise private contributions."