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HR 1’s Campaign Finance Program: A Reform that Doesn’t Reform

Photograph Source: tom_bullock – CC BY 2.0

HR 1, the For the People Act, is an omnibus voting reform bill that has many progressive measures concerning voter registration, voter roll purges, voter-verified paper ballots, early voting, no-excuse absentee ballots, presidential candidate tax returns, gerrymandering, and more. According to reports, the Democratic leadership will whip their members hard to pass the bill through the House and Senate in March.

But progressives should say not so fast. Buried in the middle of the bill is a public campaign finance program that is merely a public funding palliative that fails to stop the overwhelming domination of big private money in federal elections.

Progressives should be demanding full public funding based on equal grants for all qualified candidates and a constitutional amendment to end the US Supreme Court imposed doctrines that limit public regulation of campaign funding in public elections.

Instead, HR 1’s partial public campaign finance program based on matching funds merely adds a token patina of new public money on top of the swelling ocean of private campaign spending. The qualifying thresholds to access this presidential primary matching funds are increased five times, putting the program beyond the reach of third-party candidates. The 6:1 matching funds program for both presidential and congressional candidates increases the funding gaps between candidates by seven times.

The program simply accepts the domination of big private donations, including unaccountable dark money, in campaign financing. In fact, it eliminates the current limits on the expenditure private money for candidates who accept public funding. It deceptively creates a token program of small-donor public funds that diverts attention from the mountains of big-donor private funds.

In short, the HR 1 public campaign finance system is a scam to add public campaign subsidies to all the private money that corporate major-party incumbents can raise, while making it nearly impossible for challengers, whether inside a major party or in a third party, to even qualify for public funding. Republicans won’t vote for this, but if it passes, no doubt they will be happy to get in on the scam.

Post-Watergate Public Campaign Funding

The HR 1 campaign finance program would replace the existing system of public funding of presidential elections enacted by the Presidential Election Campaign Fund Act (FECA) of 1974 as a post-Watergate reform. The Watergate scandal had revealed that Nixon’s CREEP (Committee to Re-Elect the President) had received bags and suitcases filled with large illegal cash donations from corporate and foreign sources, including ITT, Pennzoil, Archer Daniels Midland, Gulf Resources, McDonalds, South Vietnam’s Diem, the Philippines’ Marcos, Nicaragua’s Somoza, the Greek military junta, and the Saudi royals.

The FECA system for public funding system presidential elections worked pretty well until the 2000s. It provided for a 1:1 public funding match for qualified small donations in the primaries, equal public grants for the general election campaign, and it limited how much private money candidates who receive public money could spend. In its first election, the program kept outsiders Jimmy Carter and Ronald Reagan viable, who both has less than $50,000 on hand when they got their matching funds in January 1976 as primary voting approached. For the next quarter century, major party candidates relied heavily on the program, with Reagan, George H.W. Bush, Bill Clinton, and Bob Dole taking in over $20 million for their campaigns. But as campaign spending exploded in the 2000s, major party candidates began to eschew public funding because of the limits it imposed private fundraising and spending for candidates who accepted public campaign funds. George W. Bush was the first presidential candidate to not take primary matching funds in 2000 and Barack Obama was the first to not take the general election campaign grant.

Excluding Third-Party Candidates

The HR 1 matching funds program for presidential candidates is advertised as a solution to give candidates without big donor benefactors a chance to compete. But its practical effect will be to exclude the upstarts and add public money to all the private money that insider major-party candidates can already access.

HR 1 increases by five times the qualifying threshold for presidential primary matching funds. The current system requires a candidate to raise $5,000 in contributions of $250 or less from 20 states for a minimum total of $100,000. HR 1 quintuples the qualifying threshold to $25,000 in contributions of $200 or less from 20 states for a minimum total of $500,000.

After presenting what third-party candidates in the past raised to qualify for primary season matching funds, Richard Winger argues in the lead story in the February 2020 issue of Ballot Access News that “It is unlikely that any of these candidates would have been able to qualify if the new proposal has been in effect in the past.”

Congressional candidates would also have a matching funds program for the first time under HR 1. Congressional candidates would have raise at least $50,000 in contributions of $200 or less from at least 1,000 contributors.

$50,000 is too high for almost all third-party candidates and many major-party primary challengers, particularly challengers from outside major-party machines who are women and minorities based in working-class communities.

6:1 Match Increases Funding Gaps by Seven Times

Candidates who meet the small-donor fundraising thresholds receive a 6:1 match for qualified contributions. At first glance, this may look like a program to make upstart candidates viable, but it actually increases the funding disparities between candidates by seven times.

For example, suppose a third-party presidential candidate just qualifies at $500,000 under the HR 1 program. 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.

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

Elimination of Private Spending Limits

The HR 1 Campaign Finance section eliminates the private funding caps for public funded candidates in the 1974 FECA public funding program. This change is step back that opens the door to even more private campaign funding for candidates who take public campaign funding.

To accept presidential primary matching funds in 2020 under the current system, a candidate had to limit total primary spending to $51.8 million. None of the candidates in the Democratic presidential candidates opted into primary matching funds because they believed they needed to raise and spend more than that limit to win the Democratic primary. As a Green Party candidate, I was the only presidential candidate who qualified and applied for primary matching funds in 2020.

The public campaign grant for the general election in the current public funding program for presidential candidates requires them to spend no private money in 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, would have received a grant of $103.7 million in 2020.

Minor-party candidates, defined as candidates of parties who received between 5% and 25% of the popular vote in the previous presidential election, were also qualified to receive a pro-rated proportion of the major party grant. Ross Perot in 1996 is the only third-party candidate to have qualified for and accepted the public campaign grant. Perot’s pro-rated minor-party grant was $30 million, compared to the $61.8 million major-party grant for Clinton and Dole.

Major party presidential candidates opted into both the primary matching funds and the general election grant until the 2000s. George W. Bush in 2000 was the first major-party nominee to eschew primary matching funds. Barack Obama in 2008 was the first to refuse the public grant for the general election John McCain in 2008 was the last major-party candidate to run on the public grant. With the radical rise in campaign spending in the 2000s, the public funding amounts, which are adjusted to inflation from amounts set in 1974, are not enough for major-party candidates who can raise far more from private sources. HR 1 “solves” this problem by eliminating the caps on the spending of private donations by candidates who also take and spend public funds.

Increased Big Donor Funding through National Party Committees

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 limits 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. So the super-rich can give up to $328,500 to a party’s national committees (and some, like Jeff Bezos, give to both major parties). But the super-rich can and do give more through other routes such as presidential candidate Victory Funds and unlimited millions to SuperPACs, including dark money laundered through 501c4 organizations.

Increased Big Donor Funding through Joint Campaign Committees

The April 2014 Supreme Court decision in McCutcheon v. Federal Election Commission eliminated the cap on how much a political donor can 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 in a measure slipped into the omnibus spending bill at the end of 2014.

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 $418,800 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.

HR 1 has no provisions to reign in these high-roller Victory Funds.

Increased Big Donor Funding through Dark Money and SuperPACs

Nor does HR 1 have any restrictions on the biggest sources of private campaign funding: dark money and SuperPACs.

Dark money is given to 501c4 “social welfare” organizations that can pass funds on to SuperPACs. 501c4 organizations are not required to publicly disclose 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 officially cannot coordinate with candidates, but few believe this makes much difference. SuperPACs supportive of candidates are usually set up by “former” campaign operatives who don’t need direct instructions on how to spend money in ways that enhance the candidate’s messaging and field operations.

HR 1 Deceptively Treats Symptoms, Not Causes

Proponents of the HR 1 campaign finance program like to highlight that it reduces from $5,6000 to $1,000 the individual contribution limit to federal candidates’ campaign committees. Yes, it limits what the little people can give directly candidate’s campaign committees. But that is the bright shiny object in this grift. It diverts attention from the millions that the super-rich can contribute to national party committees, Victory Funds, and SuperPACs, both directly and as dark money laundered through 501c4 organizations.

HR 1 does nothing about dark money, SuperPACs, and the Victory Funds that enable multi-millionaires to contribute millions. It increases what the rich can give to national party committees. HR 1 thus not only accepts but further facilitates the domination of big private money, including unaccountable dark money. It just adds a small donor public funds matching program on top of the existing campaign finance system, public funds that are readily available to major-party incumbents but very difficult for third-party candidates and major-party insurgents who challenge incumbents.

The problem of big donor dominance has been a problem with New York City’s much publicized matching funds program, which provides an 8:1 match. But it is no match for private money, which has long been dominant in New York City mayoral campaigns, and is becoming even more so in the 2020 campaign where SuperPACs are playing an outsized role.

A progressive campaign finance reform agenda would reject the HR 1 matching funds proposal and push for a full public campaign financing of equal grants for all candidate who meet reasonable qualifying standards and a constitutional amendment to reverse the US Supreme Court rulings that prevent full public regulation of public elections.

Cut the HR 1 Matching Funds Program

Progressives should push Congress to cut the matching funds public campaign finance program 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 it increases qualifying threshold for presidential primary matching funds by five times, which is too high for third-party candidates and many major-party challengers. Progressives should urge Congress to take up campaign finance reform in separate legislation rather than ram this problematic matching funds program through in order to get the other good reforms in HR 1 enacted.

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 for two two-year election cycles in three states that apply to and are chosen by the Federal Elections Commission. It would give voters, but only those who request them, a $25 voucher that a voter can use to make contributions to congressional candidates. No state may receive more than $10 million in vouchers.

This program is not funded enough to make an appreciable difference in states of any size. Its limited scope and timeframe means it will have no significant impact against the massive amounts of private money in congressional elections. The harm is that the program is just a bromide that distracts from the much stronger election finance reforms that progressives should push for.

Clean Money, Clean Elections

Progressives should return to the demand they pushed in the 1990s and early 2000s 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 turn to a matching funds model for public campaign funding has received major funding from wealthy individuals (a Soros, a Rockefeller, a Facebook founder, etc.) and corporate lobbies like the Committee for Economic Development.

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. Qualifying candidates receive equal public campaign grants and spend only on clean public money and not any private money on their campaigns.

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 difficult additional requirements). Most Republicans as well as Democrats and third-party candidates opt into these full public campaign funding programs rather than run on private money. These state candidates in Arizona, Connecticut, and Maine prefer to run with a public grant rather than to beg for money from rich people and special interests.

Massachusetts voters adopted a CMCE program by a landslide vote of 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 repeal of the citizens’ initiative vote. Congressional legislation for full public campaign financing for federal elections was repeatedly introduced in the 1990s and early 2000s, but never brought to the floor for a vote.

The qualifying thresholds in these state programs are reasonable. In Arizona a state house candidate must raise $1,000 in 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.

In Connecticut, to qualify for a public funding grant, a state house candidate must raise $5,300 in contributions between $5 and $270 from at least 150 district residents. That standard qualifies major-party candidates. But third-party candidates face additional requirements that are extremely difficult to meet. In order to receive a one-third grant, a third-party candidate must have also received at least 10% of the vote in the prior election or satisfy an onerous petitioning requirement of 10% of the electorate in the district in the prior election. For a two-thirds grant, these voting and petitioning thresholds rise to 15% and for a full grant to 20%. Only one third-party candidate, a Green in 2019, has qualified for a public grant since the program began in 2008.

A reasonable standard for qualifying a US House candidate under a CMCE equal grants program would be more like $5,000, not the $50,000 proposed for matching funds in HR 1. $5,000 the US House would be roughly proportional to Arizona’s state house public funding threshold. US House districts represent 711,000 people, a little over four times more than Arizona’s state house districts representing 172,000 people. If we make that five times more, scaling up Arizona’s qualifying threshold to US House districts would require raising $5,000 in 1,000 $5 contributions to qualify for an equal public campaign grant.

Instead of HR 1’s partial public funding system based on matching funds that magnifies funding disparities and allows publicly-funded candidates to raise and spend unlimited amounts of private funds, progressives should push for a CMCE system of full public campaign financing where candidates run on equal grants of clean public money instead of dirty private money.

We the People Amendment

A progressive campaign finance reform agenda must include amending the US Constitution so that even a CMCE program for full public campaign funding is not swamped by private money. Public campaign funding programs today must be voluntary and exist alongside private campaign financing under current law, including law established by rulings of the conservative US Supreme Court starting soon after FECA passed in 1974 with the 1976 Buckley v. Valeo decision. The Buckley decision ruled that limits on campaign spending restricted free speech. In other words, money is speech, not property, even if the money spent on political campaigns by the super-rich and special interests drowns out the political speech of ordinary citizens.

HR 1’s Campaign Finance section has no provisions that support amending the US Constitution to reign in big donor private funding of election campaigns. In order to end the domination of private money in elections, including dark money, the US Constitution must be amended to overturn the rulings of the US Supreme Court – including Buckley v. Valeo (1976), Citizens United v. FEC (2010), and McCutcheon v. FEC (2014) – that opened the floodgates to unlimited and often unreported “dark” private money.

More than ten proposed amendments to the US Constitution have been introduced in recent sessions of Congress to enable stronger public regulation of campaign finance. The most powerful is the We The People Amendment, which was House Joint Resolution 48 in the 116th Congress and will soon be reintroduced into the current 117th Congress. The We The People Amendment reverses the US Supreme Court imposed doctrines that corporations have the same rights as natural persons and that money is speech. The amendment would establish that only natural human beings, not artificial corporations, are persons entitled to constitutional rights, and that money is property, not protected speech. It would create the legal framework in which we the people through our elected representatives could publicly and fully regulate and finance public elections.

A progressive campaign finance agenda would therefore reject HR 1’s matching funds program of partial public funding and focus on two structural reforms: (1) enacting a program of full public campaign funding through equal grants to all qualified candidates, and (2) enacting the We The People Amendment to the US Constitution to enable full public regulation and funding of election campaigns.

Howie Hawkins was the Green Party candidate for President in 2020.

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