3: Presidential Campaigns
Public financing of Presidential campaigns Other Information:
The Presidential Election Campaign Fund Act: Under the Internal Revenue Code, qualified Presidential candidates receive money
from the Presidential Election Campaign Fund, which is an account on the books of the U.S. Treasury. The Fund is financed
exclusively by a voluntary tax checkoff. By checking a box on their income tax returns, individual taxpayers may direct $3
of their tax to the Fund (up to $6 for joint filers). Checking the box does not increase the amount a taxpayer owes or reduce
his or her refund; it merely directs that three (or six) dollars from the U.S. Treasury be used in Presidential elections.
Checkoff funds may not be spent for other federal programs. The funds are distributed under three programs: Primary Matching
Payments - Eligible candidates in the Presidential primaries may receive public funds to match the private contributions they
raise. While a candidate may raise money from many different sources, only contributions from individuals are matchable; contributions
from PACs and party committees are not. Furthermore, while an individual may give up to $2,300 to a primary candidate, only
the first $250 of that contribution is matchable. To participate in the matching fund program, a candidate must demonstrate
broad-based support by raising more than $5,000 in matchable contributions in each of 20 different states. Candidates must
agree to use public funds only for campaign expenses, and they must comply with spending limits. Beginning with a $10 million
base figure, the overall primary spending limit is adjusted each Presidential election year to reflect inflation. In 2004,
the limit was $37.31 million. General Election Grants - The Republican and Democratic candidates who win their parties' nominations
for President are each eligible to receive a grant to cover all the expenses of their general election campaigns. The basic
$20 million grant is adjusted for inflation each Presidential election year. In 2004, the grant was $74.62 million. Nominees
who accept the funds must agree not to raise private contributions (from individuals, PACs or party committees) and to limit
their campaign expenditures to the amount of public funds they receive. They may use the funds only for campaign expenses.
A third party Presidential candidate may qualify for some public funds after the general election if he or she receives at
least five percent of the popular vote. Party Convention Grants - Each major political party may receive public funds to pay
for its national Presidential nominating convention. The statute sets the base amount of the grant at $4 million for each
party, and that amount is adjusted for inflation each Presidential election year. In 2004, the major parties each received
$14.592 million. Other parties may also be eligible for partial public financing of their nominating conventions, provided
that their nominees received at least five percent of the vote in the previous Presidential election.
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