Fact Sheet on the Presidential Public Financing System

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  • The 1974 Federal Election Campaign Act (FECA), enacted in response to the Watergate scandal, fundamentally reformed the rules governing campaign financing in federal elections. The hallmark of this legislation was the creation of a voluntary program of public financing for presidential elections. This innovative reform, which stands to this day as the flagship of public financing systems used in the United States, was designed to establish a safeguard against corruption in the political system by reducing the emphasis on fundraising in presidential campaigns and diminishing the influence of private donations by providing an alternative source of funds.
     
  • In the primary period, a candidate may qualify for public matching funds on a dollar-for-dollar basis for the first $250 contributed by an individual donor. To be eligible, a candidate must raise a threshold amount from private contributions in amounts of $250 or less and agree to limit personal contributions to his or her own campaign to a maximum of $50,000. 
  • In the general election campaign, the major party nominees can choose to receive a public grant that provides full funding for a campaign. The amount of the grant is based on a formula that is indexed for inflation and, by 2008, was $84.1 million.
  • Since 1976, the first presidential election in which public funds were available, every presidential election has been financed in part with public funds. From 1976 through 2004, every major party presidential nominee relied exclusively on public money for the financing of the general election campaign. And from 1976 through 1996, every winner of the major parties’ respective presidential nominations did so with the assistance of public matching funds in the primary elections.
  • The presidential public financing system was voluntarily used by every Republican presidential nominee from 1976 to 2008 to finance their general election campaigns. This included President Gerald Ford, President Ronald Reagan (twice), President George H.W. Bush, Senator Bob Dole, President George W. Bush (twice) and Sen. John McCain. Similarly all Democratic nominees during this same period, with the exception of President Barack Obama, used the system to pay for their general election campaigns.
  • The Republican and Democratic parties have asked for and received public funds to pay for their national presidential nominating conventions for every nominating convention from 1976 to 2008.
  • The use of the presidential public financing system by candidates began to decline when the system became outdated as increased campaign costs and changes in the presidential nominating process made revisions necessary in the presidential system. The presidential system needs to be repaired, not repealed. The disastrous Citizens United decision that unleashed corporate influence-buying expenditures in our national elections has demonstrated just how essential it is to repair the presidential public financing system. A repaired system would provide presidential candidates with a viable alternative for financing their elections as opposed to having to depend on big donors, bundlers, lobbyists and corporate and other outside spenders. 
  • Reps. David Price (D-N.C.) and Chris Van Hollen (D-Md.) introduced legislation in the last Congress, and are expected to shortly reintroduce the legislation, that would repair and update the presidential public financing system to take account of the changes that have occurred in presidential campaigns. The key to the changes being proposed involves greatly increasing the role and importance of small donors and public matching funds in providing financial support for presidential candidates, and decreasing the role and importance of influence-seeking money.
  • Public funding has provided substantial support to a wide range of presidential aspirants. In the eight presidential elections from 1976 through 2004, presidential candidates and national party committees voluntarily asked for and received more than $1.3 billion in public funds.  Candidates seeking their party’s nomination asked for and received about $342 million of public money in total during this period; general election contenders asked for and received a total of $839 million.  Republicans and Democrats alike, as well as some minor party candidates, have participated in the program.
  • Public financing has been valuable because it has provided candidates with the monies needed to mount viable candidacies and raise the funds needed to wage competitive campaigns, particularly in the critical early primary states. In this way, public funding has not only served to promote competition in elections and provide more meaningful choices to voters, but it has also helped to ensure that more candidates have the opportunity to share their views with the electorate. For many candidates, public funding was the source of sorely needed funds at crucial points in a presidential race.
  • No candidate may have benefitted from public funding more than Ronald Reagan. Due to his broad base of supporters throughout the nation, Reagan was able to capitalize on his small-donor fundraising capacity to accrue substantial sums of public money. In fact, even in 1984, when as President he was seeking reelection without significant opposition from with his own party, President Reagan raised about 60 percent of the funds for his campaign from small donors and, as a result, received $9.7 million in matching funds.  Most notably, this was the maximum amount of public money a primary candidate could receive in accordance with the law at the time. To date, President Reagan stands as the only candidate to ever reach the public funding primary campaign maximum.
  • In his 1976 presidential primary campaign, Ronald Reagan had less than $44,000 in campaign money at the end of January of 1976, while his opponent, incumbent President Gerald Ford had fifteen times more cash on hand. The $1 million in public funds that Reagan received in January and $1.2 million that he received in February were essential in allowing him to continue his campaign. Reagan was once again short of cash at the end of March and was allowed to continue as a result of an infusion of public money.
  •  Ronald Reagan is not the only example of a candidate who was able to mount a competitive campaign as a result of receiving public money at a time when his campaign needed funds. Almost every election has featured candidates who faced better-funded opponents and benefitted from public funding in this way. These include Jimmy Carter in 1976, George H. W. Bush in 1980, Gary Hart in 1984, Jesse Jackson in 1988, Paul Tsongas in 1992, Pat Buchanan in 1996 and John McCain in 2000.
  • In terms of dollar totals, Democratic contenders and their national party committee received $646 million of public funding through the 2004 election, while Republican candidates and their national party committee received $628 million.  In all, 91 challengers for a presidential nomination in the elections from 1976 through 2004 qualified for and accepted primary campaign matching funds, including 53 Democrats, 29 Republicans, and 9 minor party aspirants.
  • In the first two decades of experience under the public funding programs, the vast majority of contenders for the Republican and Democratic Party presidential nominations chose to participate in the public matching funds program. Of all those who ran as Democrats or Republicans for president in the six elections between 1976 and 1996, only four (all Republicans) decided to forgo public money during the primary campaign.  (They were John Connally in 1980, Steve Forbes in 1996, Robert Dornan in 1996 and Maurice Taylor in 1996). 
  • Presidential aspirants have embraced public funding because these monies proved to be an invaluable resource. The general election grants alone freed candidates of the need to raise money and gave them more time to make their case to the electorate. Without public funding, candidate would have had to spend much of their time between July and November raising funds in order to accrue the tens of millions of dollars needed to mount a national campaign. The public funds also helped to hold down campaign expenses, since candidates did not have to spend the millions of dollars that would be needed to generate the sums offered through public funding.
  • Public financing has benefited candidates who challenged their party’s establishment or lesser-known aspirants. In these instances, public funding provided them with the resources to mount viable campaigns and present their case to the voters. For example, liberal candidates such as Democrats Jesse Jackson in 1984 and 1988 and Jerry Brown in 1992 received the vast majority of their campaign funds from smaller donations and thus qualified for significant amounts of public money.  Similarly, conservative candidates such as Republicans Pat Robertson in 1988 and Patrick Buchanan in 1992 received significant sums of public money in their respective bids for the presidency by successfully soliciting small contributions from a broad base of individual donors.