[Congressional Record Volume 153, Number 18 (Tuesday, January 30, 2007)]
[Senate]
[Pages S1346-S1351]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FEINGOLD:
  S. 436. A bill to amend the Internal Revenue Code of 1986 to reform 
the system of public financing for Presidential elections, and for 
other purposes; to the Committee on Finance.
  Mr. FEINGOLD. Mr. President, today I will introduce a bill to repair 
and strengthen the presidential public financing system. The 
Presidential Funding Act of 2007 will ensure that this system will 
continue to fulfill its promise in the 21st century. The bill will take 
effect in January 2009, so it will first apply in the 2012 presidential 
election.
  The presidential public financing system was put into place in the 
wake of the Watergate scandals as part of the Federal Election Campaign 
Act of 1974. It was held to be constitutional by the Supreme Court in 
Buckley v. Valeo. The system, of course, is voluntary, as the Supreme 
Court required in Buckley. Every major party nominee for President 
since 1976 has participated in the system for the general election and, 
prior to 2000, every major party nominee had participated in the system 
for the primary election, too. In the last election, President Bush and 
two Democratic candidates, Howard Dean and the eventual nominee John 
Kerry, opted out of the system for the presidential primaries. 
President Bush and Senator Kerry elected to take the taxpayer-funded 
grant in the general election. President Bush also opted out of the 
system for the Republican primaries in 2000 but took the general 
election grant.
  It is unfortunate that the matching funds system for the primaries 
has become less practicable. The system protects the integrity of the 
electoral process by allowing candidates to run viable campaigns 
without becoming overly dependent on private donors. The system has 
worked well in the past, and it is worth repairing so that it can work 
in the future. If we don't repair it, the pressures on candidates to 
opt out will increase until the system collapses from disuse.
  This bill makes changes to both the primary and general election 
public financing system to address the weaknesses and problems that 
have been identified by participants in the system, experts on the 
presidential election financing process, and an electorate that is 
increasingly dismayed by the influence of money in politics. First and 
most important, it eliminates the State-by-State spending limits in the 
current law and substantially increases the overall spending limit from 
the current limit of approximately $45 million to $150 million, of 
which up to $100 million can be spent before April 1 of the election 
year. This should make the system much more viable for serious 
candidates facing opponents who are capable of raising significant sums 
outside the system. The bill also makes available substantially more 
public money for participating candidates by increasing the match of 
small contributions from 1:1 to 4:1.
  One very important provision of this bill ties the primary and 
general election systems together and requires candidates to make a 
single decision on whether to participate. Candidates who opt out of 
the primary system and decide to rely solely on private money cannot 
return to the system for the general election. And candidates must 
commit to participate in the system in the general election if they 
want to receive Federal matching funds in the primaries. The bill also 
increases the spending limits for participating candidates in the 
primaries who face a nonparticipating opponent if that opponent raises 
more than 20 percent more than the spending limit. This provides some 
protection against being far outspent by a nonparticipating opponent. 
Additional grants of public money are also available to participating 
candidates who face a nonparticipating candidate spending substantially 
more than the spending limit.
  The bill also sets the general election spending limit at $100 
million, indexed for inflation. And if a general election candidate 
does not participate in the system and spends more than 20 percent more 
than the combined primary and general election spending limits, a 
participating candidate will receive a grant equal to twice the general 
election spending limit.
  This bill also addresses what some have called the ``gap'' between 
the primary and general election seasons. Presumptive presidential 
nominees have emerged earlier in the election year over the life of the 
public financing system. This has led to some nominees being 
essentially out of money between the time that they nail down the 
nomination and the convention where they are formally nominated and 
become eligible for the general election grant. For a few cycles, soft 
money raised by the parties filled in that gap, but the Bipartisan 
Campaign Reform Act of 2002 fortunately has now closed that loophole. 
This bill allows candidates who are still in the primary race as of 
April 1 to spend an additional $50 million. In addition, the bill 
allows the political parties to spend up to $25 million between April 1 
and the date that a candidate is nominated and an additional $25 
million after the nomination. The total amount of $50 million is over 
three times the amount allowed under current law. This should allow any 
gap to be more than adequately filled.
  Obviously, these changes make this a more generous system. So the 
bill also makes the requirement for qualifying more difficult. To be 
eligible for matching funds, a candidate must raise $25,000 in 
matchable contributions--up to $200 for each donor--in at least 20 
States. That is five times the threshold under current law.
  The bill also makes a number of changes in the system to reflect the 
changes in our presidential races over the past several decades. For 
one thing, it makes matching funds available starting six months before 
the date of the first primary or caucus, that's approximately 6 months 
earlier than is currently the case. For another, it sets a single date 
for release of the public grants for the general election--the Friday 
before Labor Day. This addresses an inequity in the current system, 
under which the general election grants are released after each 
nominating convention, which can be several weeks apart.
  The bill also prohibits federal elected officials and candidates from 
soliciting soft money for use in funding the party and requires 
presidential candidates to disclose bundled contributions. Additional 
provisions, and those I have discussed in summary form here, are 
explained in a section-by-section analysis of the bill that I ask 
unanimous consent to be printed in the Record, following my statement. 
I will also ask unanimous consent that the text of the bill itself be 
printed in the Record.
  The purpose of this bill is to improve the campaign finance system, 
not to advance one party's interests. In fact, this is an excellent 
time to make changes in the Presidential public funding system. The 
2008 presidential campaign, which is already underway, will undoubtedly 
be the most expensive in history. It is likely that a number of 
candidates from both parties will once again opt out of the primary 
matching funds system, and some experts predict that one or both major 
party nominees will even refuse public grants for the

[[Page S1347]]

general election period. It is too late to make the changes needed to 
repair the system for the 2008 election. But if we act now, we can make 
sure that an updated and revised system is in place for the 2012 
election. If we act now, I am certain that the 2008 campaign cycle will 
confirm our foresight. If we do nothing, 2008 will continue and 
accelerate the slide of the current system into irrelevancy.
  Fixing the presidential public financing system will cost money, but 
our best calculations at the present time indicate that the changes to 
the system in this bill can be paid for by raising the income tax 
check-off on an individual return from $3 to just $10. The total cost 
of the changes to the system, based on data from the 2004 elections, is 
projected to be around $360 million over the 4-year election cycle. To 
offset that increased cost, this bill caps taxpayer subsidies for 
promotion of agricultural products, including some brand-name goods, by 
limiting the Market Access Program to $100 million per year.
  Though the numbers are large, this is actually a very small 
investment to make to protect our democracy and preserve the integrity 
of our presidential elections. The American people do not want to see a 
return to the pre-Watergate days of unlimited spending on presidential 
elections and candidates entirely beholden to private donors. We must 
act now to ensure the fairness of our elections and the confidence of 
our citizens in the process by repairing the cornerstone of the 
Watergate reforms.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

     Presidential Funding Act of 2006--Section by Section Analysis


                         SECTION 1: SHORT TITLE

    SECTION 2: REVISIONS TO SYSTEM OF PRESIDENTIAL PRIMARY MATCHING 
                                PAYMENTS

       (a) Matching Funds: Current law provides for a 1-to-1 
     match, where up to $250 of each individual's contributions 
     for the primaries is matched with $250 in public funds. Under 
     the new matching system, individual contributions of up to 
     $200 from each individual will be matched at a 4-to-l ratio, 
     so $200 in individual contributions can be matched with $800 
     from public funds.
       Candidates who remain in the primary race can also receive 
     an additional 1-to-1 match of up to $200 of contributions 
     received after March 31 of a presidential election year. This 
     additional match applies both to an initial contribution made 
     after March 31 and to contributions from individuals who 
     already gave $200 or more prior to April 1.
       The bill defines ``contribution'' as ``a gift of money made 
     by a written instrument which identifies the person making 
     the contribution by full name and mailing address.''
       (b) Eligibility for matching funds: Current law requires 
     candidates to raise $5,000 in matchable contributions 
     (currently $250 or less) in 20 states. To be eligible for 
     matching funds under this bill, a candidate must raise 
     $25,000 of matchable contributions (up to $200 per individual 
     donor) in at least 20 states.
       In addition, to receive matching funds in the primary, 
     candidates must pledge to apply for public money in the 
     general election if nominated and to not exceed the general 
     election spending limits.
       (c) Timing of payments: Current law makes matching funds 
     available on January 1 of a presidential election year. The 
     bill makes such funds available six months prior to the first 
     state caucus or primary.


    SECTION 3: REQUIRING PARTICIPATION IN PRIMARY PAYMENT SYSTEM AS 
        CONDITION OF ELIGIBILITY FOR GENERAL ELECTIONS PAYMENTS

       Currently, candidates can participate in either the primary 
     or the general election public financing system, or both. 
     Under the bill, a candidate must participate in the primary 
     matching system in order to be eligible to receive public 
     funds in the general election.


               SECTION 4: REVISIONS TO EXPENDITURE LIMITS

       (a) Spending limits for candidates: In 2004, under current 
     law, candidates participating in the public funding system 
     had to abide by a primary election spending limit of about 
     $45 million and a general election spending limit of about 
     $75 million (all of which was public money). The bill sets a 
     total primary spending ceiling for participating candidates 
     in 2008 of $150 million, of which only $100 million can be 
     spent before April 1. State by state spending limits are 
     eliminated. The general election limit, which the major party 
     candidates will receive in public funds, will be $100 
     million.
       (b) Spending limit for parties: Current law provides a 
     single coordinated spending limit for national party 
     committees based on population. In 2004 that limit was about 
     $15 million. The bill provides two limits of $25 million. The 
     first applies after April 1 until a candidate is nominated. 
     The second limit kicks in after the nomination. Any part of 
     the limit not spent before the nomination can be spent after. 
     In addition, the party coordinated spending limit is 
     eliminated entirely until the general election public funds 
     are released if there is an active candidate from the 
     opposing party who has exceeded the primary spending limits 
     by more than 20 percent.
       This will allow the party to support the presumptive 
     nominee during the so-called ``gap'' between the end of the 
     primaries and the conventions. The entire cost of a 
     coordinated party communication is subject to the limit if 
     any portion of that communication has to do with the 
     presidential election.
       (c) Inflation adjustment: Party and candidate spending 
     limits will be indexed for inflation, with 2008 as the base 
     year.
       (d) Fundraising expenses: Under the bill, all the costs of 
     fundraising by candidates are subject to their spending 
     limits.


 SECTION 5: ADDITIONAL PAYMENTS AND INCREASED EXPENDITURES LIMITS FOR 
     CANDIDATES PARTICIPATING IN PUBLIC FINANCING WHO FACE CERTAIN 
                       NONPARTICIPATING OPPONENTS

       (a) Primary candidates: When a participating candidate is 
     opposed in a primary by a nonparticipating candidate who 
     spends more than 120 percent of the primary spending limit 
     ($100 million prior to April 1 and $150 million after April 
     1), the participating candidate will receive a 5-to-1 match, 
     instead of a 4-to-1 match for contributions of less than $200 
     per donor. That additional match applies to all contributions 
     received by the participating candidate both before and after 
     the nonparticipating candidate crosses the 120 percent 
     threshold. In addition, the participating candidate's primary 
     spending limit is raised by $50 million when a 
     nonparticipating candidate raise spends more than the 120 
     percent of either the $100 million (before April 1) or $150 
     million (after April 1) limit. The limit is raised by another 
     $50 million if the nonparticipating candidate spends more 
     than 120 percent of the increased limit. Thus, the maximum 
     spending limit in the primary would be $250 million if an 
     opposing candidate has spent more than $240 million.
       (b) General election candidates: When a participating 
     candidate is opposed in a general election by a 
     nonparticipating candidate who spends more than 120 percent 
     of the combined primary and general election spending limits, 
     the participating candidate shall receive an additional 
     grant of public money equal to the amount provided for 
     that election--$100 million in 2008. Minor party 
     candidates are also eligible for an additional grant equal 
     to the amount they otherwise receive (which is based on 
     the performance of that party in the previous presidential 
     election).
       (c) Reporting and Certification: In order to provide for 
     timely determination of a participating candidate's 
     eligibility for increased spending limits, matching funds, 
     and/or general election grants, non-participating candidates 
     must notify the FEC within 24 hours after receiving 
     contributions or making expenditures of greater than the 
     applicable 120 percent threshold. Within 24 hours of 
     receiving such a notice, the FEC will inform candidates 
     participating in the system of their increased expenditure 
     limits and will certify to the Secretary of the Treasury that 
     participating candidates are eligible to receive additional 
     payments.


 SECTION 6: ESTABLISHMENT OF UNIFORM DATE FOR RELEASE OF PAYMENTS FROM 
      PRESIDENTIAL ELECTIONS CAMPAIGN FUNDS TO ELIGIBLE CANDIDATES

       Under current law, candidates participating in the system 
     for the general election receive their grants of public money 
     immediately after receiving the nomination of their party, 
     meaning that the two major parties receive their grants on 
     different dates. Under the bill, all candidates eligible to 
     receive public money in the general election would receive 
     that money on the Friday before Labor Day, unless a 
     candidate's formal nomination occurs later.


     SECTION 7: REVISIONS TO DESIGNATION OF INCOME TAX PAYMENTS BY 
                          INDIVIDUAL TAXPAYERS

       The tax check-off is increased from $3 (individual) and $6 
     (couple) to $10 and $20. The amount will be adjusted for 
     inflation, and rounded to the nearest dollar, beginning in 
     2009.
       The IRS shall require by regulation that electronic tax 
     preparation software does not automatically accept or decline 
     the tax checkoff. The FEC is required to inform and educate 
     the public about the purpose of the Presidential Election 
     Campaign Fund (``PECF'') and how to make a contribution. 
     Funding for this program of up to $10 million in a four year 
     presidential election cycle, will come from the PECF.


       SECTION 8: AMOUNTS IN PRESIDENTIAL ELECTION CAMPAIGN FUND

       Under current law, in January of an election year if the 
     Treasury Department determines that there are insufficient 
     funds in the PECF to make the required payments to 
     participating primary candidates, the party conventions, and 
     the general election candidates, it must reduce the payments 
     available to participating primary candidates and it cannot 
     make up the shortfall from any other source until those funds 
     come in. Under the bill, in making that determination the 
     Department can include an estimate of the amount that will be 
     received by the PECF during that election year, but the 
     estimate cannot exceed the past three years' average 
     contribution to the fund. This will allow primary candidates 
     to receive their

[[Page S1348]]

     full payments as long as a reasonable estimate of the funds 
     that will come into the PECF that year will cover the general 
     election candidate payments. The bill allows the Secretary of 
     the Treasury to borrow the funds necessary to carry out the 
     purposes of the fund during the first campaign cycle in which 
     the bill is in effect.


SECTION 9: REPEAL OF PRIORITY IN USE OF FUNDS FOR POLITICAL CONVENTIONS

       Current law gives the political parties priority on 
     receiving the funds they are entitled to from the PECF. This 
     means that parties get money for their conventions even if 
     adequate funds are not available for participating 
     candidates. This section would make funds available for the 
     conventions only if all participating candidates have 
     received the funds to which they are entitled.


             SECTION 10: REGULATION OF CONVENTION FINANCING

       Federal candidates and officeholders are prohibited from 
     raising or spending soft money in connection with a 
     nominating convention of any political party, including funds 
     for a host committee, civic committee, or municipality.


            SECTION 11: DISCLOSURE OF BUNDLED CONTRIBUTIONS

       (a) Disclosure requirement: The authorized committees of 
     presidential candidate committee must report the name, 
     address, and occupation of each person making a bundled 
     contribution and the aggregate amount of bundled 
     contributions made by that person.
       (b) Definition of bundled contribution. A bundled 
     contribution is a series of contributions totaling $10,000 or 
     more that are (1) collected by one person and transferred to 
     the candidate; or (2) delivered directly to the candidate 
     from the donor but include a written or oral communication 
     that the funds were ``solicited, arranged, or directed'' by 
     someone other than the donor. This covers the two most common 
     bundling arrangements where fundraisers get ``credit'' for 
     collecting contributions for a candidate.


                           SECTION 12: OFFSET

       This section provides an offset for the increased cost of 
     the presidential public funding system. It caps taxpayer 
     subsidies for promotion of agricultural products, including 
     some brand-named goods, by limiting the Market Access Program 
     to $100 million per year.


                       SECTION 13: EFFECTIVE DATE

       Provides that the amendments will apply to presidential 
     elections occurring after January 1, 2009.
                                  ____


                                 S. 436

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the 
     ``Presidential Funding Act of 2007''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Revisions to system of Presidential primary matching payments.
Sec. 3. Requiring participation in primary payment system as condition 
              of eligibility for general election payments.
Sec. 4. Revisions to expenditure limits.
Sec. 5. Additional payments and increased expenditure limits for 
              candidates participating in public financing who face 
              certain nonparticipating opponents.
Sec. 6. Establishment of uniform date for release of payments from 
              Presidential Election Campaign Fund to eligible 
              candidates.
Sec. 7. Revisions to designation of income tax payments by individual 
              taxpayers.
Sec. 8. Amounts in Presidential Election Campaign Fund.
Sec. 9. Repeal of priority in use of funds for political conventions.
Sec. 10. Regulation of convention financing.
Sec. 11. Disclosure of bundled contributions.
Sec. 12. Offset.
Sec. 13. Effective date.

     SEC. 2. REVISIONS TO SYSTEM OF PRESIDENTIAL PRIMARY MATCHING 
                   PAYMENTS.

       (a) Increase in Matching Payments.--
       (1) In general.--Section 9034(a) of the Internal Revenue 
     Code of 1986 is amended--
       (A) by striking ``an amount equal to the amount'' and 
     inserting ``an amount equal to 400 percent of the amount''; 
     and
       (B) by striking ``$250'' and inserting ``$200''.
       (2) Additional matching payments for candidates after march 
     31 of the election year.--Section 9034(b) of such Code is 
     amended to read as follows:
       ``(b) Additional Payments for Candidates After March 31 of 
     the Election Year.--In addition to any payment under 
     subsection (a), an individual who is a candidate after March 
     31 of the calendar year in which the presidential election is 
     held and who is eligible to receive payments under section 
     9033 shall be entitled to payments under section 9037 in an 
     amount equal to the amount of each contribution received by 
     such individual after March 31 of the calendar year in which 
     such presidential election is held, disregarding any amount 
     of contributions from any person to the extent that the total 
     of the amounts contributed by such person after such date 
     exceeds $200.''.
       (3) Conforming amendments.--Section 9034 of such Code, as 
     amended by paragraph (2), is amended--
       (A) by striking the last sentence of subsection (a); and
       (B) by inserting after subsection (b) the following new 
     subsection:
       ``(c) Contribution Defined.--For purposes of this section 
     and section 9033(b), the term `contribution' means a gift of 
     money made by a written instrument which identifies the 
     person making the contribution by full name and mailing 
     address, but does not include a subscription, loan, advance, 
     or deposit of money, or anything of value or anything 
     described in subparagraph (B), (C), or (D) of section 
     9032(4).''.
       (b) Eligibility Requirements.--
       (1) Amount of aggregate contributions per state.--Section 
     9033(b)(3) of such Code is amended by striking ``$5,000'' and 
     inserting ``$25,000''.
       (2) Amount of individual contributions.--Section 9033(b)(4) 
     of such Code is amended by striking ``$250'' and inserting 
     ``$200''.
       (3) Participation in system for payments for general 
     election.--Section 9033(b) of such Code is amended--
       (A) by striking ``and'' at the end of paragraph (3);
       (B) by striking the period at the end of paragraph (4) and 
     inserting ``, and''; and
       (C) by adding at the end the following new paragraph:
       ``(5) if the candidate is nominated by a political party 
     for election to the office of President, the candidate will 
     apply for and accept payments with respect to the general 
     election for such office in accordance with chapter 95, 
     including the requirement that the candidate and the 
     candidate's authorized committees will not incur qualified 
     campaign expenses in excess of the aggregate payments to 
     which they will be entitled under section 9004.''.
       (c) Period of Availability of Payments.--Section 9032(6) of 
     such Code is amended by striking ``the beginning of the 
     calendar year in which a general election for the office of 
     President of the United States will be held'' and inserting 
     ``the date that is 6 months prior to the date of the earliest 
     State primary election''.

     SEC. 3. REQUIRING PARTICIPATION IN PRIMARY PAYMENT SYSTEM AS 
                   CONDITION OF ELIGIBILITY FOR GENERAL ELECTION 
                   PAYMENTS.

       (a) Major Party Candidates.--Section 9003(b) of the 
     Internal Revenue Code of 1986 is amended--
       (1) by redesignating paragraphs (1) and (2) as paragraphs 
     (2) and (3); and
       (2) by inserting before paragraph (2) (as so redesignated) 
     the following new paragraph:
       ``(1) the candidate received payments under chapter 96 for 
     the campaign for nomination;''.
       (b) Minor Party Candidates.--Section 9003(c) of such Code 
     is amended--
       (1) by redesignating paragraphs (1) and (2) as paragraphs 
     (2) and (3); and
       (2) by inserting before paragraph (2) (as so redesignated) 
     the following new paragraph:
       ``(1) the candidate received payments under chapter 96 for 
     the campaign for nomination;''.

     SEC. 4. REVISIONS TO EXPENDITURE LIMITS.

       (a) Increase in Expenditure Limits for Participating 
     Candidates; Elimination of State-Specific Limits.--
       (1) In general.--Section 315(b)(1) of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 441a(b)(1)) is amended by 
     striking ``may make expenditures in excess of'' and all that 
     follows and inserting ``may make expenditures--
       ``(A) with respect to a campaign for nomination for 
     election to such office--
       ``(i) in excess of $100,000,000 before April 1 of the 
     calendar year in which the presidential election is held; and
       ``(ii) in excess of $150,000,000 before the date described 
     in section 9006(b) of the Internal Revenue Code of 1986; and
       ``(B) with respect to a campaign for election to such 
     office, in excess of $100,000,000.''.
       (2) Clerical correction.--Section 9004(a)(1) of the 
     Internal Revenue Code of 1986 is amended by striking 
     ``section 320(b)(1)(B) of the Federal Election Campaign Act 
     of 1971'' and inserting ``section 315(b)(1)(B) of the Federal 
     Election Campaign Act of 1971''.
       (b) Increase in Limit on Coordinated Party Expenditures.--
     Section 315(d)(2) of the Federal Election Campaign Act of 
     1971 (2 U.S.C. 441a(d)(2)) is amended to read as follows:
       ``(2)(A) The national committee of a political party may 
     not make any expenditure in connection with the general 
     election campaign of any candidate for President of the 
     United States who is affiliated with such party which exceeds 
     $25,000,000.
       ``(B) Notwithstanding the limitation under subparagraph 
     (A), during the period beginning on April 1 of the year in 
     which a presidential election is held and ending on the date 
     described in section 9006(b) of the Internal Revenue Code of 
     1986, the national committee of a political party may make 
     additional expenditures in connection with the general 
     election campaign of a candidate for President of the United 
     States who is affiliated with such party in an amount not to 
     exceed $25,000,000.
       ``(C)(i) Notwithstanding subparagraph (B) or the limitation 
     under subparagraph (A), if any nonparticipating primary 
     candidate (within the meaning of subsection (b)(3)) 
     affiliated with the national committee of a political party 
     receives contributions or makes expenditures with respect to 
     such candidate's campaign in an aggregate amount greater than 
     120 percent of the expenditure limitation in effect under 
     subsection

[[Page S1349]]

     (b)(1)(A)(ii), then, during the period described in clause 
     (ii), the national committee of any other political party may 
     make expenditures in connection with the general election 
     campaign of a candidate for President of the United States 
     who is affiliated with such other party without limitation.
       ``(ii) The period described in this clause is the period--
       ``(I) beginning on the later of April 1 of the year in 
     which a presidential election is held or the date on which 
     such nonparticipating primary candidate first receives 
     contributions or makes expenditures in the aggregate amount 
     described in clause (i); and
       ``(II) ending on the earlier of the date such 
     nonparticipating primary candidate ceases to be a candidate 
     for nomination to the office of President of the United 
     States and is not a candidate for such office or the date 
     described in section 9006(b) of the Internal Revenue Code of 
     1986.
       ``(iii) If the nonparticipating primary candidate described 
     in clause (i) ceases to be a candidate for nomination to the 
     office of President of the United States and is not a 
     candidate for such office, clause (i) shall not apply and the 
     limitations under subparagraphs (A) and (B) shall apply. It 
     shall not be considered to be a violation of this Act if the 
     application of the preceding sentence results in the national 
     committee of a political party violating the limitations 
     under subparagraphs (A) and (B) solely by reason of 
     expenditures made by such national committee during the 
     period in which clause (i) applied.
       ``(D) For purposes of this paragraph--
       ``(i) any expenditure made by or on behalf of a national 
     committee of a political party and in connection with a 
     presidential election shall be considered to be made in 
     connection with the general election campaign of a candidate 
     for President of the United States who is affiliated with 
     such party; and
       ``(ii) any communication made by or on behalf of such party 
     shall be considered to be made in connection with the general 
     election campaign of a candidate for President of the United 
     States who is affiliated with such party if any portion of 
     the communication is in connection with such election.
       ``(E) Any expenditure under this paragraph shall be in 
     addition to any expenditure by a national committee of a 
     political party serving as the principal campaign committee 
     of a candidate for the office of President of the United 
     States.''.
       (c) Conforming Amendments Relating to Timing of Cost-of-
     Living Adjustment.--
       (1) In general.--Section 315(c)(1) of such Act (2 U.S.C. 
     441a(c)(1)) is amended--
       (A) in subparagraph (B), by striking ``(b), (d),'' and 
     inserting ``(d)(3)''; and
       (B) by inserting at the end the following new subparagraph:
       ``(D) In any calendar year after 2008--
       ``(i) a limitation established by subsection (b) or (d)(2) 
     shall be increased by the percent difference determined under 
     subparagraph (A);
       ``(ii) each amount so increased shall remain in effect for 
     the calendar year; and
       ``(iii) if any amount after adjustment under clause (i) is 
     not a multiple of $100, such amount shall be rounded to the 
     nearest multiple of $100.''.
       (2) Base year.--Section 315(c)(2)(B) of such Act (2 U.S.C. 
     441a(c)(2)(B)) is amended--
       (A) in clause (i)--
       (i) by striking ``subsections (b) and (d)'' and inserting 
     ``subsection (d)(3)''; and
       (ii) by striking ``and'' at the end;
       (B) in clause (ii), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following new clause:
       ``(iii) for purposes of subsection (b) and (d)(2), calendar 
     year 2007.''.
       (d) Repeal of Exclusion of Fundraising Costs From Treatment 
     as Expenditures.--Section 301(9)(B)(vi) of the Federal 
     Election Campaign Act of 1971 (2 U.S.C. 431(9)(B)(vi)) is 
     amended by striking ``in excess of an amount equal to 20 
     percent of the expenditure limitation applicable to such 
     candidate under section 315(b)'' and inserting the following: 
     ``who is seeking nomination for election or election to the 
     office of President or Vice President of the United States''.

     SEC. 5. ADDITIONAL PAYMENTS AND INCREASED EXPENDITURE LIMITS 
                   FOR CANDIDATES PARTICIPATING IN PUBLIC 
                   FINANCING WHO FACE CERTAIN NONPARTICIPATING 
                   OPPONENTS.

       (a) Candidates in Primary Elections.--
       (1) Additional payments.--
       (A) In general.--Section 9034 of the Internal Revenue Code 
     of 1986, as amended by section 2, is amended by redesignating 
     subsection (c) as subsection (d) and by inserting after 
     subsection (b) the following new subsection:
       ``(c) Additional Payments for Candidates Facing 
     Nonparticipating Opponents.--
       ``(1) In general.--In addition to any payments provided 
     under subsections (a) and (b), each candidate described in 
     paragraph (2) shall be entitled to--
       ``(A) a payment under section 9037 in an amount equal to 
     the amount of each contribution received by such candidate on 
     or after the beginning of the calendar year preceding the 
     calendar year of the presidential election with respect to 
     which such candidate is seeking nomination and before the 
     qualifying date, disregarding any amount of contributions 
     from any person to the extent that the total of the amounts 
     contributed by such person exceeds $200, and
       ``(B) payments under section 9037 in an amount equal to the 
     amount of each contribution received by such candidate on or 
     after the qualifying date, disregarding any amount of 
     contributions from any person to the extent that the total of 
     the amounts contributed by such person exceeds $200.
       ``(2) Candidates to whom this subsection applies.--A 
     candidate is described in this paragraph if such candidate--
       ``(A) is eligible to receive payments under section 9033, 
     and
       ``(B) is opposed by a nonparticipating primary candidate of 
     the same political party who receives contributions or makes 
     expenditures with respect to the campaign--
       ``(i) before April 1 of the year in which the presidential 
     election is held, in an aggregate amount greater than 120 
     percent of the expenditure limitation under section 
     315(b)(1)(A)(i) of the Federal Election Campaign Act of 1971, 
     or
       ``(ii) before the date described in section 9006(b), in an 
     aggregate amount greater than 120 percent of the expenditure 
     limitation under section 315(b)(1)(A)(ii) of such Act.
       ``(3) Nonparticipating primary candidate.--In this 
     subsection, the term `nonparticipating primary candidate' 
     means a candidate for nomination for election for the office 
     of President who is not eligible under section 9033 to 
     receive payments from the Secretary under this chapter.
       ``(4) Qualifying date.--In this subsection, the term 
     `qualifying date' means the first date on which the 
     contributions received or expenditures made by the 
     nonparticipating primary candidate described in paragraph 
     (2)(B) exceed the amount described under either clause (i) or 
     clause (ii) of such paragraph.''.
       (B) Conforming amendment.--Section 9034(b) of such Code, as 
     amended by section 2, is amended by striking ``subsection 
     (a)'' and inserting ``subsections (a) and (c)''.
       (2) Increase in expenditure limit.--Section 315(b) of the 
     Federal Election Campaign Act of 1971 (2 U.S.C. 441a(b)) is 
     amended by adding at the end the following new paragraph:
       ``(3)(A) In the case of an eligible candidate, each of the 
     limitations under clause (i) and (ii) of paragraph (1)(A) 
     shall be increased--
       ``(i) by $50,000,000, if any nonparticipating primary 
     candidate of the same political party as such candidate 
     receives contributions or makes expenditures with respect to 
     the campaign in an aggregate amount greater than 120 percent 
     of the expenditure limitation applicable to eligible 
     candidates under clause (i) or (ii) of paragraph (1)(A) 
     (before the application of this clause), and
       ``(ii) by $100,000,000, if such nonparticipating primary 
     candidate receives contributions or makes expenditures with 
     respect to the campaign in an aggregate amount greater than 
     120 percent of the expenditure limitation applicable to 
     eligible candidates under clause (i) or (ii) of paragraph 
     (1)(A) after the application of clause (i).
       ``(B) Each dollar amount under subparagraph (A) shall be 
     considered a limitation under this subsection for purposes of 
     subsection (c).
       ``(C) In this paragraph, the term `eligible candidate' 
     means, with respect to any period, a candidate--
       ``(i) who is eligible to receive payments under section 
     9033 of the Internal Revenue Code of 1986;
       ``(ii) who is opposed by a nonparticipating primary 
     candidate; and
       ``(iii) with respect to whom the Commission has given 
     notice under section 304(i)(1)(B)(i).
       ``(D) In this paragraph, the term `nonparticipating primary 
     candidate' means, with respect to any eligible candidate, a 
     candidate for nomination for election for the office of 
     President who is not eligible under section 9033 of the 
     Internal Revenue Code of 1986 to receive payments from the 
     Secretary of the Treasury under chapter 96 of such Code.''.
       (b) Candidates in General Elections.--
       (1) Additional payments.--
       (A) In general.--Section 9004(a)(1) of the Internal Revenue 
     Code of 1986 is amended--
       (i) by striking ``(1) The eligible candidates'' and 
     inserting ``(1)(A) Except as provided in subparagraph (B), 
     the eligible candidates''; and
       (ii) by adding at the end the following new subparagraph:
       ``(B) In addition to the payments described in subparagraph 
     (A), each eligible candidate of a major party in a 
     presidential election with an opponent in the election who is 
     not eligible to receive payments under section 9006 and who 
     receives contributions or makes expenditures with respect to 
     the primary and general elections in an aggregate amount 
     greater than 120 percent of the combined expenditure 
     limitations applicable to eligible candidates under section 
     315(b)(1) of the Federal Election Campaign Act of 1971 shall 
     be entitled to an equal payment under section 9006 in an 
     amount equal to 100 percent of the expenditure limitation 
     applicable under such section with respect to a campaign for 
     election to the office of President.''.
       (B) Special rule for minor party candidates.--Section 
     9004(a)(2)(A) of such Code is amended--
       (i) by striking ``(A) The eligible candidates'' and 
     inserting ``(A)(i) Except as provided in clause (ii), the 
     eligible candidates''; and
       (ii) by adding at the end the following new clause:
       ``(ii) In addition to the payments described in clause (i), 
     each eligible candidate of a minor party in a presidential 
     election with an opponent in the election who is not eligible 
     to receive payments under section 9006

[[Page S1350]]

     and who receives contributions or makes expenditures with 
     respect to the primary and general elections in an aggregate 
     amount greater than 120 percent of the combined expenditure 
     limitations applicable to eligible candidates under section 
     315(b)(1) of the Federal Election Campaign Act of 1971 shall 
     be entitled to an equal payment under section 9006 in an 
     amount equal to 100 percent of the payment to which such 
     candidate is entitled under clause (i).''.
       (2) Exclusion of additional payment from determination of 
     expenditure limits.--Section 315(b) of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 441a(b)), as amended by 
     subsection (a), is amended by adding at the end the following 
     new paragraph:
       ``(4) In the case of a candidate who is eligible to receive 
     payments under section 9004(a)(1)(B) or 9004(a)(2)(A)(ii) of 
     the Internal Revenue Code of 1986, the limitation under 
     paragraph (1)(B) shall be increased by the amount of such 
     payments received by the candidate.''.
       (c) Process for Determination of Eligibility for Additional 
     Payment and Increased Expenditure Limits.--Section 304 of the 
     Federal Election Campaign Act of 1971 (2 U.S.C. 434) is 
     amended by adding at the end the following new subsection:
       ``(i) Reporting and Certification for Additional Public 
     Financing Payments for Candidates.--
       ``(1) Primary candidates.--
       ``(A) Notification of expenditures by ineligible 
     candidates.--
       ``(i) Expenditures in excess of 120 percent of limit.--If a 
     candidate for a nomination for election for the office of 
     President who is not eligible to receive payments under 
     section 9033 of the Internal Revenue Code of 1986 receives 
     contributions or makes expenditures with respect to the 
     primary election in an aggregate amount greater than 120 
     percent of the expenditure limitation applicable to eligible 
     candidates under clause (i) or (ii) of section 315(b)(1)(A), 
     the candidate shall notify the Commission in writing that the 
     candidate has received aggregate contributions or made 
     aggregate expenditures in such an amount not later than 24 
     hours after first receiving aggregate contributions or making 
     aggregate expenditures in such an amount.
       ``(ii) Expenditures in excess of 120 percent of increased 
     limit.--If a candidate for a nomination for election for the 
     office of President who is not eligible to receive payments 
     under section 9033 of the Internal Revenue Code of 1986 
     receives contributions or makes expenditures with respect to 
     the primary election in an aggregate amount greater than 120 
     percent of the expenditure limitation applicable to eligible 
     candidates under section 315(b) after the application of 
     paragraph (3)(A)(i) thereof, the candidate shall notify the 
     Commission in writing that the candidate has received 
     aggregate contributions or made aggregate expenditures in 
     such an amount not later than 24 hours after first receiving 
     aggregate contributions or making aggregate expenditures in 
     such an amount.
       ``(B) Certification.--Not later than 24 hours after 
     receiving any written notice under subparagraph (A) from a 
     candidate, the Commission shall--
       ``(i) certify to the Secretary of the Treasury that 
     opponents of the candidate are eligible for additional 
     payments under section 9034(c) of the Internal Revenue Code 
     of 1986;
       ``(ii) notify each opponent of the candidate who is 
     eligible to receive payments under section 9033 of the 
     Internal Revenue Code of 1986 of the amount of the increased 
     limitation on expenditures which applies pursuant to section 
     315(b)(3); and
       ``(iii) in the case of a notice under subparagraph (A)(i), 
     notify the national committee of each political party (other 
     than the political party with which the candidate is 
     affiliated) of the inapplicability of expenditure limits 
     under section 315(d)(2) pursuant to subparagraph (C) thereof.
       ``(2) General election candidates.--
       ``(A) Notification of expenditures by ineligible 
     candidates.--If a candidate in a presidential election who is 
     not eligible to receive payments under section 9006 of the 
     Internal Revenue Code of 1986 receives contributions or makes 
     expenditures with respect to the primary and general 
     elections in an aggregate amount greater than 120 percent of 
     the combined expenditure limitations applicable to eligible 
     candidates under section 315(b)(1), the candidate shall 
     notify the Commission in writing that the candidate has 
     received aggregate contributions or made aggregate 
     expenditures in such an amount not later than 24 hours after 
     first receiving aggregate contributions or making aggregate 
     expenditures in such an amount.
       ``(B) Certification.--Not later than 24 hours after 
     receiving a written notice under subparagraph (A), the 
     Commission shall certify to the Secretary of the Treasury for 
     payment to any eligible candidate who is entitled to an 
     additional payment under paragraph (1)(B) or (2)(A)(ii) of 
     section 9004(a) of the Internal Revenue Code of 1986 that the 
     candidate is entitled to payment in full of the additional 
     payment under such section.''.

     SEC. 6. ESTABLISHMENT OF UNIFORM DATE FOR RELEASE OF PAYMENTS 
                   FROM PRESIDENTIAL ELECTION CAMPAIGN FUND TO 
                   ELIGIBLE CANDIDATES.

       (a) In General.--The first sentence of section 9006(b) of 
     the Internal Revenue Code of 1986 is amended to read as 
     follows: ``If the Secretary of the Treasury receives a 
     certification from the Commission under section 9005 for 
     payment to the eligible candidates of a political party, the 
     Secretary shall, on the last Friday occurring before the 
     first Monday in September, pay to such candidates of the fund 
     the amount certified by the Commission.''.
       (b) Conforming Amendment.--The first sentence of section 
     9006(c) of such Code is amended by striking ``the time of a 
     certification by the Comptroller General under section 9005 
     for payment'' and inserting ``the time of making a payment 
     under subsection (b)''.

     SEC. 7. REVISIONS TO DESIGNATION OF INCOME TAX PAYMENTS BY 
                   INDIVIDUAL TAXPAYERS.

       (a) Increase in Amount Designated.--Section 6096(a) of the 
     Internal Revenue Code of 1986 is amended--
       (1) in the first sentence, by striking ``$3'' each place it 
     appears and inserting ``$10''; and
       (2) in the second sentence--
       (A) by striking ``$6'' and inserting ``$20''; and
       (B) by striking ``$3'' and inserting ``$10''.
       (b) Indexing.--Section 6096 of such Code is amended by 
     adding at the end the following new subsection:
       ``(d) Indexing of Amount Designated.--
       ``(1) In general.--With respect to each taxable year after 
     2008, each amount referred to in subsection (a) shall be 
     increased by the percent difference described in paragraph 
     (2), except that if any such amount after such an increase is 
     not a multiple of $1, such amount shall be rounded to the 
     nearest multiple of $1.
       ``(2) Percent difference described.--The percent difference 
     described in this paragraph with respect to a taxable year is 
     the percent difference determined under section 315(c)(1)(A) 
     of the Federal Election Campaign Act of 1971 with respect to 
     the calendar year during which the taxable year begins, 
     except that the base year involved shall be 2008.''.
       (c) Ensuring Tax Preparation Software Does Not Provide 
     Automatic Response to Designation Question.--Section 6096 of 
     such Code, as amended by subsection (b), is amended by adding 
     at the end the following new subsection:
       ``(e) Ensuring Tax Preparation Software Does Not Provide 
     Automatic Response to Designation Question.--The Secretary 
     shall promulgate regulations to ensure that electronic 
     software used in the preparation or filing of individual 
     income tax returns does not automatically accept or decline a 
     designation of a payment under this section.''.
       (d) Public Information Program on Designation.--Section 
     6096 of such Code, as amended by subsections (b) and (c), is 
     amended by adding at the end the following new subsection:
       ``(f) Public Information Program.--
       ``(1) In general.--The Federal Election Commission shall 
     conduct a program to inform and educate the public regarding 
     the purposes of the Presidential Election Campaign Fund, the 
     procedures for the designation of payments under this 
     section, and the effect of such a designation on the income 
     tax liability of taxpayers.
       ``(2) Use of funds for program.--Amounts in the 
     Presidential Election Campaign Fund shall be made available 
     to the Federal Election Commission to carry out the program 
     under this subsection, except that the amount made available 
     for this purpose may not exceed $10,000,000 with respect to 
     any Presidential election cycle. In this paragraph, a 
     `Presidential election cycle' is the 4-year period beginning 
     with January of the year following a Presidential 
     election.''.
       (e) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 8. AMOUNTS IN PRESIDENTIAL ELECTION CAMPAIGN FUND.

       (a) Determination of Amounts in Fund.--Section 9006(c) of 
     the Internal Revenue Code of 1986 is amended by adding at the 
     end the following new sentence: ``In making a determination 
     of whether there are insufficient moneys in the fund for 
     purposes of the previous sentence, the Secretary shall take 
     into account in determining the balance of the fund for a 
     Presidential election year the Secretary's best estimate of 
     the amount of moneys which will be deposited into the fund 
     during the year, except that the amount of the estimate may 
     not exceed the average of the annual amounts deposited in the 
     fund during the previous 3 years.''.
       (b) Special Rule for First Campaign Cycle Under This Act.--
       (1) In general.--Section 9006 of the Internal Revenue Code 
     of 1986 is amended by adding at the end the following new 
     subsection:
       ``(d) Special Authority to Borrow.--
       ``(1) In general.--Notwithstanding subsection (c), there 
     are authorized to be appropriated to the fund, as repayable 
     advances, such sums as are necessary to carry out the 
     purposes of the fund during the period ending on the first 
     presidential election occurring after the date of the 
     enactment of this subsection.
       ``(2) Repayment of advances.--
       ``(A) In general.--Advances made to the fund shall be 
     repaid, and interest on such advances shall be paid, to the 
     general fund of the Treasury when the Secretary determines 
     that moneys are available for such purposes in the fund.
       ``(B) Rate of interest.--Interest on advances made to the 
     fund shall be at a rate determined by the Secretary of the 
     Treasury (as of the close of the calendar month preceding the 
     month in which the advance is made) to be equal to the 
     current average

[[Page S1351]]

     market yield on outstanding marketable obligations of the 
     United States with remaining periods to maturity comparable 
     to the anticipated period during which the advance will be 
     outstanding and shall be compounded annually.''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect on the date of the enactment of this Act.

     SEC. 9. REPEAL OF PRIORITY IN USE OF FUNDS FOR POLITICAL 
                   CONVENTIONS.

       (a) In General.--Section 9008(a) of the Internal Revenue 
     Code of 1986 is amended by striking the period at the end of 
     the second sentence and all that follows and inserting the 
     following: ``, except that the amount deposited may not 
     exceed the amount available after the Secretary determines 
     that amounts for payments under section 9006 and section 9037 
     are available for such payments.''.
       (b) Conforming Amendment.--The second sentence of section 
     9037(a) of such Code is amended by striking ``section 9006(c) 
     and for payments under section 9008(b)(3)'' and inserting 
     ``section 9006''.

     SEC. 10. REGULATION OF CONVENTION FINANCING.

       Section 323 of the Federal Election Campaign Act of 1971 (2 
     U.S.C. 441i) is amended by adding at the end the following 
     new subsection:
       ``(g) National Conventions.--Any person described in 
     subsection (e) shall not solicit, receive, direct, transfer, 
     or spend any funds in connection with a presidential 
     nominating convention of any political party, including funds 
     for a host committee, civic committee, municipality, or any 
     other person or entity spending funds in connection with such 
     a convention, unless such funds--
       ``(1) are not in excess of the amounts permitted with 
     respect to contributions to the political committee 
     established and maintained by a national political party 
     committee under section 315; and
       ``(2) are not from sources prohibited by this Act from 
     making contributions in connection with an election for 
     Federal office.''.

     SEC. 11. DISCLOSURE OF BUNDLED CONTRIBUTIONS.

       (a) In General.--Section 304(b) of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 434(b)) is amended--
       (1) by striking ``and'' at the end of paragraph (7);
       (2) by striking the period at the end of paragraph (8) and 
     inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(9) in the case of an authorized committee of a candidate 
     for President, the name, address, occupation, and employer of 
     each person who makes a bundled contribution, and the 
     aggregate amount of the bundled contributions made by such 
     person during the reporting period.''.
       (b) Bundled Contribution.--Section 301 of the Federal 
     Election Campaign Act of 1971 (2 U.S.C. 431) is amended by 
     adding at the end the following new paragraph:
       ``(27) Bundled contribution.--The term `bundled 
     contribution' means a series of contributions that are, in 
     the aggregate, $10,000 or more and--
       ``(A) are transferred to the candidate or the authorized 
     committee of the candidate by one person; or
       ``(B) include a written or oral notification that the 
     contribution was solicited, arranged, or directed by a person 
     other than the donor.''.

     SEC. 12. OFFSET.

       (a) In General.--Section 211(c)(1)(A) of the Agricultural 
     Trade Act of 1978 (7 U.S.C. 5641(c)(1)(A)) is amended by 
     striking ``and $200,000,000 for each of fiscal years 2006 and 
     2007'' and inserting ``$200,000,000 for fiscal year 2006, and 
     $100,000,000 for fiscal year 2007''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on the date of enactment of this Act.

     SEC. 13. EFFECTIVE DATE.

       Except as otherwise provided in this Act, the amendments 
     made by this Act shall apply with respect to elections 
     occurring after January 1, 2009.
                                 ______