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U.S. House Votes to End Campaign Finance System, Senate Unlikely to Agree

The Republican-controlled U.S. House, continuing its push for spending cuts, voted to put the public financing of presidential campaigns on the budget chopping block.

Legislation passed yesterday by a largely party-line vote of 239-160 would abolish the funding system almost four decades after the Watergate scandal that led to its adoption. Republicans cited the nonpartisan Congressional Budget Office’s findings that their action would save $617 million over 10 years.

Democrats who control the Senate said they won’t go along with the measure, even as the chamber’s Republican leader, Mitch McConnell of Kentucky, introduced legislation to do so.

The Democrats said the bill was another effort to remove limits on campaign contributions following the U.S. Supreme Court’s decision in the Citizens United case last year that allowed corporations to fund political ads from their treasuries.

“This is an attempt to finish the job that the Supreme Court started with the Citizens United decision,” said Senator Charles Schumer, a New York Democrat and chairman of the Rules Committee, which has jurisdiction over campaign finance legislation. “It would bust one of the last dams protecting our election system from an uncontrolled flood of special-interest money.”

Jon Summers, a spokesman for Senate Majority Leader Harry Reid, a Nevada Democrat, said McConnell’s bill wouldn’t be brought up for a vote in the Senate. President Barack Obama also said he opposed ending the program.

Declining Check-Offs

McConnell, in offering his bill, cited declining public participation in the public financing program. The percentage of Americans agreeing to divert $3 from their tax bill to the program in 2007 was 8.3 percent, down from a high of 28.7 percent in 1980, when the check-off was $1, Internal Revenue Statistics show.

“In a time of exploding deficits and record debt, the last thing the American people want right now is to provide what amounts to welfare for politicians,” McConnell said in a statement.

House Republicans have promised to vote each week on proposals to cut spending. “In times when government has no choice but to do more with less, voting to end the Presidential Election Campaign Fund should be a no-brainer,” House Majority Leader Eric Cantor, a Virginia Republican, said during yesterday’s debate.

Disclosure Rules

Before the final vote, House Republicans defeated, 228-173, a Democratic attempt to require groups funding political ads to disclose their donors. The proposal was in response to the Citizens United decision, which eased such disclosure rules. In the last Congress, Senate Republicans twice blocked a more far- reaching disclosure bill.

Supporters of public financing called for amending the law, rather than eliminating it.

Democratic Representatives Chris Van Hollen of Maryland and David Price of North Carolina have introduced legislation that would increase spending limits for candidates, provide a greater federal match of campaign donations, allow them to receive federal funding six months before the first primaries, and enable nominees to raise money in small amounts for the general election even after receiving a federal grant. It would also require candidates to disclose their top fundraisers.

Watergate Scandal

The 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 and office complex. 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.

“Dare we forget what Watergate was all about?” Price said in a statement. “President Nixon’s Committee to Re-Elect the President, fueled by huge quantities of corporate cash, paid for criminal acts and otherwise subverted the American electoral system. Let’s not return to the darkest days of our democracy.”

Under the current financing program, 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 program also pays for the Republican and Democratic presidential nominating conventions.

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.

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.

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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