Watergate-Era Public Finance System Faces Budget Ax
Watergate-Inspired Finance System Faces Republican Ax
Mike Mergen/Bloomberg
Voters cast their ballots in the Pennsylvania presidential primary in Philadelphia.
Voters cast their ballots in the Pennsylvania presidential primary in Philadelphia. Photographer: Mike Mergen/Bloomberg
Almost four decades after Congress responded to the Watergate scandal by providing federal funds for presidential campaigns, fewer candidates are taking the money, a smaller percentage of taxpayers contribute to the program and House Republicans want to abolish it.
A mainstay of every presidential campaign since 1976, the public financing system is the latest target of the Republican push to rein in the federal deficit. A bill on the House floor today would save $617 million over 10 years, according to the Congressional Budget Office.
That is a minuscule fraction of this year’s $1.3 trillion deficit, and the bill is unlikely to advance in the Democratic- controlled Senate. Still, the push to end the program underscores discontent with it. President Barack Obama and backers of campaign finance laws say the solution is to amend the law, rather than eliminate it.
“Congress decided back in the ‘70s huge contributions from special interests corrupt our politics,” said Paul Ryan, a lawyer with the Washington-based Campaign Legal Center, an advocacy group. “It’s been a very valuable program to presidential contenders. It needs updating, but it shouldn’t be scrapped.”
Former Federal Election Commission Chairman Bradley Smith, a Republican, said the program isn’t worth the money.
‘No Evidence’
“There’s no evidence that we’re governed better, that campaigns are better,” said Smith, chairman of the Alexandria, Virginia-based Center for Competitive Politics, which opposes limits on political spending. “The public doesn’t care. There’s no real evidence that we get better governance.”
Representative Tom Cole, an Oklahoma Republican and the bill’s lead sponsor, said today ending the program should be an easy choice for lawmakers as they look to cut federal spending.
“It simply goes to support a handful of politicians who want to run for president,” he said on the House floor. “This is a no-brainer.”
Representative Chris Van Hollen, a Maryland Democrat, said the bill would put more special-interest money flowing into the political system. The legislation “takes our nation’s campaign finance system in exactly the wrong direction,” he said.
Declining Participation
The effort to eliminate the system comes as the share of Americans agreeing to pay for it with taxes they owe is at an all-time low. In 2007 the percentage agreeing to divert $3 from their tax bill to the program was 8.3 percent, down from a high of 28.7 percent in 1980, when the check-off was $1, Internal Revenue Statistics show.
The legislation wouldn’t change the limits on contributions to candidates, which in 2010 were $2,400 per individual and $5,000 per political action committee for both primary and general election campaigns.
The public financing program was enacted in 1974 after President Richard Nixon resigned from office amid revelations about his role in covering up the break-in of Democratic political offices at Washington’s Watergate Hotel. During probes of the break-in, reports surfaced of secret slush funds and illegal activities funded by some of the unregulated private donations to Nixon’s 1972 re-election campaign. That spurred Congress to create the public financing system.
Government Match
Under it, the government matches the first $250 of each individual contribution for presidential candidates who are willing to limit their spending in primaries. In the general election, the major-party nominees receive a lump sum if they agree to forgo private fundraising except to cover legal and accounting costs.
The government also pays for the Republican and Democratic quadrennial nominating conventions.
Until 2000, taxpayers helped fund every major presidential candidate except for Republicans John Connally and Steve Forbes, who relied on private contributions in failed bids for their party’s nomination.
George W. Bush in 2000 became the first major-party candidate to win the presidential nomination without taking federal matching funds for the primaries. Since then, no nominee has. Candidates using the system in 2008 received $21.7 million in matching funds for the primaries, the lowest amount ever.
Obama’s Move
Also in 2008, Obama became the first major-party nominee to turn down general election money, funding his campaign through $745.7 million in private donations. His Republican opponent, Senator John McCain of Arizona, received $84.1 million from the government for his general election campaign after raising $219.6 million during the primaries.
Candidates who have passed on getting federal funds have relied on hundreds of corporate executives, lobbyists and other individuals to help them organize large-scale fundraising.
Robert Wolf, chairman of UBS AG’s Americas unit, brought in more than $500,000 for Obama; former Representative Tom Loeffler of Texas, a lobbyist whose clients include General Motors Co., raised at least $500,000 for McCain.
Van Hollen and Representative David Price, a North Carolina Democrat, introduced legislation yesterday to increase the federal match for primary funds, raise the amount of money candidates can spend overall and allow nominees to continue raising money in small amounts after taking the general-election grant.
Other proposals to alter the system have stalled in recent sessions.
“There’s been a lack of political will,” said Ryan, of the Campaign Legal Center. “The fixes aren’t difficult to write, but it’s been difficult to get the votes to change the law.”
To contact the reporter on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net.
To contact the editor responsible for this story: Mark Silva in Washington at milva34@bloomberg.net.
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