Issue Brief on the HR 1 Campaign Finance Program
By Howie Hawkins, February 18, 2021
The Campaign Finance section is one of three divisions in HR 1, the proposed For the People Act.
Division A deals with Voting, including many good reforms concerning internet and same-day voter registration, eliminating unjust voter roll purges, voter-verified permanent paper ballots, early voting, and no excuse absentee ballots.
Division C deals with Ethics, again with many good reforms such as requiring presidential candidates to release their tax returns.
Division B deal with Campaign Finance. It creates a matching funds public campaign finance program for congressional and presidential candidates that simply adds public money on top of a campaign finance system that is dominated by private money. It also creates qualifying thresholds that are beyond the reach of third-party candidates. It has no restrictions on private campaign funding.
In short, the HR 1 public campaign finance system is a scam to add public money to all the private money corporate major-party incumbents can raise, while making it hard for challengers, whether inside a major party or in a third party, to even qualify for public funding. The Republican politicians won’t vote for this, but if it passes, they will be happy to get in on the scam.
The Campaign Finance section of HR 1 is a reform that doesn’t reform.
Qualifying Thresholds Are Too High
For presidential candidates, the HR 1 increases the qualifying threshold by five times, from $100,000 ($5,000 in contributions of $250 or less from 20 states) to $500,000 ($25,000 in contributions of $200 or less from 20 states).
This threshold would have been beyond the reach of every third party candidate who qualified for presidential primary matching funds since the program was instituted after the Watergate scandal. (For details, see the lead story in Ballot Access News, Feb. 2021).
Congressional candidates would have a matching funds program for the first time. Congressional candidates must raise at least $50,000 in contributions of $200 or less from at least 1,000 contributors.
Again, this threshold is too high for almost all third-party candidates and many major-party primary challengers.
Matching Funds Increase Funding Disparities
Candidates who qualify receive a 6:1 match for qualifying contributions.
This match increases funding disparities seven times.
For example, suppose a third-party presidential candidate just qualifies at $500,000. Compare that with candidates at the low-end of funding for 2020 Democratic presidential primary candidates like Julian Castro and Marianne Williamson who raised about $5 million in small donations (https://projects.propublica.org/itemizer/presidential-candidates/2020).
A 6:1 match for $500,000 would yield $3.5 million. A 6:1 match for $5 million would yield $35 million. The funding disparity grows seven times, from $4.5 million to $31.5 million
This increase in funding disparity happens among major party candidates as well as between major-party and third-party candidates.
No Limits to Private Financing
The HR 1 Campaign Finance section provides no limits on the amount private donations candidates may raise and spend.
This is a step back from the existing public campaign finance system adopted after Watergate, which set limits on spending private funding for candidates who opt into public funding.
To accept presidential primary matching funds in 2020, a candidate had to limit total primary spending to $51,850,800 (https://www.fec.gov/help-candidates-and-committees/understanding-public-funding-presidential-elections/presidential-spending-limits-2020/).
None of the major party candidates opted in because they believed they needed to raise and spend more than that limit to win the Democratic primary. The Green Party’s Howie Hawkins was the only presidential candidate in 2020 who qualified and applied for presidential primary matching funds.
Under the new campaign finance program proposed in HR 1, there are no limits to the amount of private money candidates who receive pubic funding can raise and spend.
The current system also has a public funding program for major-party presidential candidates for the general election. Each major party nominee, defined as the candidate of a party whose presidential candidate received at least 25% of the popular vote in the previous presidential election, is eligible for an equal public campaign grant. If they accept, they cannot spend private money in the general election after their party’s nominating convention.
The amount available in 2020 was $103,701,600. No candidate has taken the general election public campaign grant since John McCain in 2008.
Minor party candidates, defined as candidates of parties who received between 5% and 25% of the popular vote in the previous presidential election, were qualified to receive a pro-rated proportion of the major party grant.
Until Barack Obama refused the public grant for the general election in 2008, all major party candidates ran on it. Major party presidential candidates opted into both the primary matching funds and the general election grant until 2008. With the radical rise in campaign spending in the 2000s, the old system public funding amounts are not enough for what major party candidates can raise and want to spend.
Increases National Party Committee Contributions to Presidential Candidates
HR 1 increases the amount national party committees can contribute to presidential candidates from $5,000 to $100 million. Each party has three national committees that can make this contribution: the national committee and the party’s house and senate campaign committees. So the total amount increases from $15,000 to $300 million.
This change increases the influence of big donors. The current individual contribution limit to a federal candidate’s campaign committee is $5,600 ($2,800 for the primary and $2,800 for the general). The current individual campaign contribution limit to party’s national committees is $109,500 (https://www.fec.gov/help-candidates-and-committees/candidate-taking-receipts/contribution-limits/).
No Restrictions on Joint Campaign Committees
The April 2014 Supreme Court decision in McCutcheon v. Federal Election Commission eliminated the cap on how much a political donor could give in an election cycle. Congress and President Obama vastly expanded how much national parties can raise by allowing them to collect high-level donations for separate accounts to finance their presidential conventions, building renovations, and legal proceedings in a measure slipped into the omnibus spending bill at the end of 2014 (https://www.washingtonpost.com/politics/political-parties-go-after-million-dollar-donors-in-wake-of-looser-rules/2015/09/19/728b43fe-5ede-11e5-8e9e-dce8a2a2a679_story.html).
In 2016, the Clinton and Trump campaigns took advantage of these changes to set up Victory Funds as joint operations of the campaigns with the national and state parties, to which donors could give up to $356,100 to the Clinton Victory Fund and $449,400 to the Trump Victory Fund. In 2020, donors could give up to $620,600 to the Biden Victory Fund and $580,600 to the Trump Victory Fund. (https://www.washingtonpost.com/politics/donors-can-now-give-620600-to-biden-and-dnc-expanding-democratic-big-money-fundraising/2020/05/16/d2bf51cc-978a-11ea-82b4-c8db161ff6e5_story.html; https://www.washingtonpost.com/politics/2020/01/15/wealthy-donors-now-allowed-give-over-half-million-dollars-each-support-trumps-re-election/).
HR 1 has no provisions to reign in these high-roller campaign funds.
No Restrictions on Dark Money and SuperPACs
HR 1 has no restrictions on dark money and SuperPACs.
Dark money is given to 501c4 “social welfare” organizations that pass funds on to SuperPACs. 501c4 organizations are not required to publicly report their donors or the amounts. So this “dark money” gets into campaign financing through SuperPACs, which do have to report their donors but in this case report the money as coming from the 510c4, not the original source.
SuperPACs were made possible by the 2010 US Supreme Court decision in Citizens United v. Federal Election Commission. SuperPACs cannot coordinate with candidates, but they are set up by “former” campaign operatives who don’t need direct instructions to spend money in ways that enhance the candidate’s messaging and field operation.
HR 1 thus accepts the domination of big private money, including unaccountable dark money, and just adds a small donor public funds matching program on top of the existing campaign finance system.
What Can Be Done
Cut the Matching Funds Program
Progressives should push to cut the matching funds public campaign finance progran for presidential and congressional candidates from HR 1 because it does not limit private campaign financing, its 6:1 match increases funding disparities seven times, and its qualifying threshold for presidential primary matching funds increases the qualifying threshold by five times, which is too high for third-party candidates and many major-party primary challengers.
Cut the “My Voice Voucher” Pilot Program
The Campaign Finance section of HR 1 also includes a “My Voice Voucher” pilot program that would run in three states that apply to and are chosen by the Federal Elections Commission for two two-year election cycles. It would give voters who request them a $25 voucher which the could use to make contributions to congressional candidates. No state may receive more than $10 million in vouchers.
This program is not big enough to make a difference in states of any size and its limited pilot program scope and timeframe means it will have no significant impact in a system dominated by massive amounts of private money. The harm is that the program is just a palliative that distracts from the much stronger election finance reforms that progressives should push for.
Progressive should push for full public campaign financing and a constitutional amendment that will enable strong public regulation of election campaign financing.
Clean Money, Clean Elections
In the 1990s and early 2000s, progressives campaigned for full public campaign financing under a program known as Clean Money, Clean Elections (CMCE). Since around 2010, progressive Democratic legislators have stopped campaigning for full public campaign financing and pushed the matching funds system of partial public campaign financing at the state and federal levels. This effort has received major funding from wealthy individuals (a Soros, a Rockefeller, a Facebook founder, etc.) and corporate lobbies like the Committee for Economic Development. (https://www.thenation.com/article/archive/all-eyes-new-york-unlikely-coalition-pushes-cuomo-make-good-public-finance/).
Under the CMCE full public campaign financing program, candidates collect small contributions from individuals to demonstrate that they have enough public support to warrant public funding of their campaign. For example, in Arizona a state house candidate must collect 200 $5 contributions to qualify. In Maine, a state house candidate must raise $1,000 in contributions of $100 or less. All candidates who qualify receive an equal public campaign grant sufficient to reach all the voters in the election. In Arizona, publicly funded candidates are required to participate in a debate sponsored by the Citizens Clean Election Commission.
Maine (1996), Arizona (2000), and Connecticut (2006) have adopted CMCE for their state elections (although Connecticut’s system discriminates against third-party candidates by requiring that they meet a much higher qualifying threshold). Massachusetts voters adopted a CMCE program by a vote 58.4% to 29.6% in a 1998 initiative, but the overwhelmingly Democratic state legislature refused to fund it. In 2003 it was repealed in adopting Republican Governor Mitt Romney’s austerity budget and the courts upheld the legislature’s overturning of the citizens’ initiative vote. Congressional legislation for full public campaign financing for federal elections was introduced in the 1990s and early 2000s, but never adopted (https://www.everycrsreport.com/reports/RL33814.html#_Ref221333440).
Instead of HR 1’s matching funds system that magnifies funding disparities and allows publicly-funded candidates to raise and spend unlimited amounts of private funds, progressives should push for a Clean Money, Clean Elections system of full public campaign financing where candidates run on equal public grants and no private money.
We the People Amendment
In order to end the domination of private money in elections, including dark money, a constitutional amendment is required to overturn the rulings of the US Supreme Court in Buckley v. Valeo (1976), Citizens United v. FEC (2010), and McCutcheon v. FEC (2014) that opened the floodgates to unlimited and unreported private money.
House Joint Resolution 48 (https://www.congress.gov/bill/116th-congress/house-joint-resolution/48), popularly know as the We The People Amendment, is a proposed amendment to the US Constitution that will enable we the people through our elected representatives to publicly and fully regulate and finance public elections. The amendment establishes that only natural human beings, not artificial corporations, are persons entitled to constitutional rights, and that money is property, not protected speech.