[Congressional Record Volume 156, Number 114 (Friday, July 30, 2010)]
[Senate]
[Pages S6551-S6553]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FEINGOLD:
  S. 3681. 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 reintroduce a bill to 
repair and strengthen the presidential public financing system. The 
Presidential Funding Act of 2010 will ensure that this system will 
continue to fulfill its promise in the 21st century. The bill will take 
effect in January 2011, so it will first apply in the 2012 presidential 
election.
  It is important to note that the cost of this bill is completely 
offset by reforms to the federal irrigation subsidy program. Friends of 
the Earth in its 2003 Green Scissors report estimated that these 
provisions would save at least $4.4 billion over 10 years, which is 
more than sufficient to cover the estimated cost of this bill--$1.1 
billion over 4 years.
  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. Until the 2008 election, every major party 
nominee for President since 1976 had 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 as well.
  In the 2004 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 accepted the general election grant.
  In 2008, several of the leading candidates for President, including 
President Obama, Secretary Clinton, Senator McCain and Governors 
Huckabee and Romney, did not participate in the primary system. While 
Senator McCain accepted the public grant for the general election, 
President Obama became the first major party candidate not to 
participate in the general election public funding system.
  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.
  In the post-Citizens United world, the likelihood of general election 
candidates participating in the system if it is not changed is greatly 
reduced as well. The current system completely prohibits private 
fundraising, requiring candidates to fund their campaigns solely with 
the general election grant, which was $84.1 million in 2008. Senator 
McCain, who accepted the grant, raised approximately $220 million for 
the primaries in 2008. President Obama, who did not participate in 
either the primary or general election public funding system, raised a 
total of approximately $746 million for the entire 2008 campaign. The 
public funding system is clearly not keeping pace with the current cost 
of campaigns or the ability of candidates to raise private money.
  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 all spending limits in the law for both 
the primary and the general elections. 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. 
It increases the match of small contributions from 1:1 to 4:1 and 
provides up to $100 million in matching funds for a participating 
candidate in the primaries and $200 million in total grants for the 
general election.
  In exchange for the much more generous public grants provided by the 
bill, participating candidates are required to focus their fundraising 
on small donors. First, they must agree to accept contributions of only 
up to $1,000 in the primaries. The current individual contribution 
limit, established by the Bipartisan Campaign Reform Act of 2002, is 
$2,400. In addition, only contributors of $200 or less can have their 
contributions matched. Since each $200 contribution will yield $800 in 
matching funds, there will be a great incentive for candidates to seek 
out small donors. The 2008 campaign saw an explosion of small donations 
to the campaigns of both parties. This bill should help promote and 
extend this trend, which is a positive development for our democracy.
  Under the bill, for the first time, matching funds will also be part 
of the general election system. In addition to a $50 million grant, 
general election candidates can receive up to $150 million in matching 
funds, again based on a 4:1 match of contributions of $200 or less. 
General election candidates can also raise contributions of up to $500 
from other donors whose contributions will not be matched. General 
election candidates, therefore, will be able to spend up to $200 
million in public funds plus whatever they can raise in contributions 
of $500 or less. Even in light of the specter of corporate spending 
permitted by Citizens United, these should be adequate resources for a 
campaign that lasts only a few months.
  One very important provision of the 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.
  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

[[Page S6552]]

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. By eliminating spending limits in the primaries, the bill 
makes sure that candidates can continue raising and spending the money 
they need to remain competitive. In addition, the political parties 
will be permitted to spend up to $50 million coordinated with their 
candidates, an increase from the current limit of $15 million.
  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, which is 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 conventions and 
requires presidential candidates to disclose bundled contributions. The 
bundling provision builds on a provision contained in ethics and 
lobbying reform legislation enacted in 2007. It requires presidential 
candidates to disclosure all bundlers of $50,000 or more.
  Additional provisions, and those I have discussed in summary form 
here, are explained in a section-by-section analysis of the bill that I 
will ask to be printed in the Record, following my statement.
  The purpose of this bill is to improve the campaign finance system, 
not to advance one party's interests. The current President raised and 
spent more money than any other candidate in history. But he has a 
history of supporting the presidential public funding system, and he 
recognizes the importance of reforming and updating the current system. 
I am optimistic that he will endorse this bill, and will participate in 
the system if he runs for reelection.
  Fixing the presidential public financing system will cost money. The 
total cost of the system, based on data from the 2008 elections, is 
projected to be around $1.1 billion over the 4-year election cycle. 
Though this is a large number, it 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 candidates entirely beholden to private 
donors. We must act to ensure the fairness of our elections and the 
confidence of our citizens in the process by repairing the cornerstone 
of the Watergate reforms.
  Mr. President, I ask unanimous consent that a section by section 
analysis be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record as follows:

      Presidential Funding Act of 2010 Section by Section Analysis


               SECTION 1: SHORT TITLE; TABLE OF CONTENTS

                       TITLE I--PRIMARY ELECTIONS

       Section 101: Increase in and modifications to matching 
     payments--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-1 ratio, so a $200 
     individual contribution can be matched with $800 from public 
     funds. Contributions are ``matchable contributions,'' 
     however, only if the donor has made $200 or less in aggregate 
     contributions to the candidate, and the candidate certifies 
     that he or she will not accept more than $200 from that 
     donor. In addition, ``matchable contributions'' may not be 
     bundled by anyone other than an individual.
       A participating candidate can receive up to $100 million in 
     matching funds.
       ``Contribution'' is defined as ``a gift of money made by a 
     written instrument which identifies the person making the 
     contribution by full name and mailing address.''
       Section 102: ELigibility requirements for matching 
     payments--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 be eligible for matching funds, candidates 
     must agree not to accept more than $1,000 in aggregate 
     contributions from a single donor. That amount will be 
     indexed for inflation. Participating candidates must also 
     agree to not accept contributions either made by or bundled 
     by lobbyists and PACs.
       Finally, to receive matching funds in the primary, 
     candidates must also pledge to apply for and accept public 
     money in the general election if nominated.
       Section 103: Inflation adjustment for contribution 
     limitations and matching contributions--Contribution limits 
     will be indexed for inflation, with 2012 as the base year.
       Section 104: Repeal of expenditure limitations--Under 
     current law, participating candidates cannot spend in excess 
     of the primary spending limit, which was $54 million in 2008. 
     The bill eliminates that spending limit.
       Section 105: Period of availability of matching 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. That date for the 2008 elections would have been 
     July 3, 2007.
       Section 106: Examination and audits of matchable 
     contributions--Current law requires that the Commission 
     conduct an audit of the qualified campaign expenses of 
     candidates and authorized committees that received payments 
     under section 9037. This Section would require the Commission 
     to also audit matchable contributions accepted by candidates 
     and authorized committees.
       Section 107: Modification to limitation on contributions 
     for presidential primary candidates--Under current law, all 
     elections held in a calendar year for President are 
     considered to be a single election for purposes of the 
     contribution limits. This Section addresses the possibility 
     that a primary or caucus might be actually be held the year 
     before the general election by changing ``calendar year'' to 
     ``four year election cycle.''


                      TITLE II--GENERAL ELECTIONS

       Section 201: Modification of eligibility requirements for 
     public financing--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.
       Furthermore, the candidate must agree to (1) furnish the 
     Commission with evidence of qualified campaign expenses, if 
     requested; (2) agree to keep any records, books and other 
     information the Commission may request; and (3) agree to an 
     audit by the Commission and pay any amounts required to be 
     paid as a result of that audit.
       To receive public funding in the general election, 
     candidates must certify that they will not (1) accept 
     contributions or bundled contributions from lobbyists or 
     contributions from a political committee other than a 
     political party; (2) solicit funds for a joint fundraising 
     committee that includes a political party after June 1 of the 
     election year ; and (3) solicit funds for any political party 
     committee after they have received their general election 
     grant.
       Section 202: Repeal of expenditure limitations and use of 
     qualified campaign contributions--Currently, candidates who 
     receive public funds are prohibited from raising any private 
     funds for general election campaign expenses. Under the bill, 
     such candidates may continue to raise ``qualified 
     contributions'' for the general election. Qualified 
     contributions are defined as contributions of no more than 
     $500 in the aggregate that are received after June 1 of the 
     election year. To accept a qualified contribution, candidates 
     must certify that the donor has not contributed more than 
     $500 in the aggregate to the candidate for the general 
     election, and the candidate will not accept additional 
     contributions from that donor once $500 has been received 
     from that donor.
       Section 203: Matching payments and other modifications to 
     payment amounts--The major party candidates for President 
     will be entitled to equal payments of $50 million, plus 
     matching funds of up to $150 million for a maximum total of 
     $200 million in public funding. Individual contributions 
     raised after June 1 of the election year of up to $200 will 
     be matched at a 4-to-1 ratio. Contributions are ``matchable 
     contributions,'' however, only if the candidate certifies 
     that the donor has made contributions of $200 or less in 
     aggregate for the general election, the candidate will not 
     accept more than $200 from that donor, and the contribution 
     has not been bundled or forwarded by anyone other than an 
     individual fundraiser.
       Minor party candidates can receive grants and matching 
     funds for the general election after the fact, based on the 
     percentage of

[[Page S6553]]

     votes received by those candidates in the election. If a 
     minor party fielded a candidate in the previous election, 
     general election funds can be received by that party's 
     candidate based on the performance of the candidate in the 
     previous election. These rules mirror current law on the 
     availability of general election funding for minor party 
     candidates.
       Section 204: Inflation adjustment for payment amounts and 
     qualified contributions--The general election grant amount, 
     ($50 million in 2012), general election matching fund maximum 
     amount ($150 million in 2012), and qualified contribution 
     limit for the general election ($500 in 2012) will be indexed 
     for inflation.
       Section 205: Increase in limit on coordinated party 
     expenditures--Current law provides a single coordinated 
     spending limit for national party committees. In 2008, that 
     limit was about $15 million. The bill increases the limit to 
     $50 million. 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. Party spending limits will be indexed 
     for inflation.
       Section 205: Establishment of uniform date for release of 
     payments--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 their grants and whatever matching funds they 
     are entitled to at that time on the Friday before Labor Day, 
     or 24 hours after both major party candidates have been 
     nominated, whichever is later.
       Section 206: 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 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 also 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 207: Use of general election payments for general 
     election legal and accounting compliance--Current FEC 
     regulations permit general election candidates to raise money 
     for a separate fund to pay their legal and accounting 
     expenses (so-called ``GELAC funds''). The bill specifies that 
     all such expenses will now considered general election 
     expenses and must be paid for out of their general election 
     funds.


                    TITLE III--POLITICAL CONVENTIONS

       Section 301: Repeal of public financing of party 
     conventions--This section eliminates the public financing of 
     party conventions.
       Section 302: Contributions for political conventions--This 
     section allows the national political parties to establish a 
     separate account to receive contributions that can only be 
     used to fund their party conventions. Individuals may 
     contribute up to $25,000 in a four year election cycle to 
     that account. The aggregate annual contribution limit 
     applicable to an individual who contributes to a political 
     convention account will be increased by the amount of such 
     contributions, meaning that the contributions essentially 
     will not count toward the aggregate limit.
       Section 303: Prohibition on use of soft money--Federal 
     candidates and officeholders and national parties and their 
     officers 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.


                       TITLE IV--OTHER PROVISIONS

       Section 401: 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 2010.
       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. These 
     provisions will take effect immediately upon enactment of 
     this bill.
       Section 402: Regulations with respect to best efforts for 
     identifying persons making contributions--Within six months 
     of enactment, the FEC must promulgate new regulations on what 
     constitutes ``best efforts'' for determining the identity of 
     persons making contributions, including persons making 
     contributions over the Internet or by credit card. The 
     regulations must require the entity receiving the 
     contribution to verify that the name on the credit card 
     matches the name of the donor.
       Section 403: Prohibition on joint fundraising committees--
     Federal candidates are prohibited from forming a joint 
     fundraising committee with any political committee other than 
     an authorized candidate committee.
       Section 404: Disclosure of bundled contributions to 
     presidential campaigns--This section builds on the bundling 
     disclosure provision of the Honest Leadership and Open 
     Government Act of 2007 (``HLOGA'') to require presidential 
     campaigns to disclose the name, address, and employer of all 
     individuals or groups that bundle contributions totaling more 
     than $50,000 in the four year election cycle. Individuals who 
     are registered lobbyists would have to be separately 
     identified. HLOGA's definition of bundling would apply to 
     bundling disclosure by the presidential candidates, and no 
     change is made to the requirements of HLOGA with respect to 
     congressional campaigns.
       Section 405: Judicial review of actions related to campaign 
     finance laws--Current law provides four separate judicial 
     review provisions: (1) Section 403 of the Bipartisan Campaign 
     Reform Act (``BCRA''), which applies to actions challenging 
     the constitutionality of any provision of that Act; (2) 2 
     U.S.C. Sec. 437h, which applies to actions challenging the 
     constitutionality of any other provision of the Federal 
     Election Campaign Act (``FECA''); (3) 26 U.S.C. Sec. 9011, 
     which applies to certifications or other actions taken by the 
     FEC in connection with the general election public financing 
     program; and (4) 26 U.S.C. Sec. 9041, which applies to 
     certifications and other actions by the FEC in connection 
     with the primary public funding system.
       The bill replaces all four of those provisions with a 
     single judicial review provision. All actions shall be filed 
     in the U.S. District Court for the District of Columbia, with 
     an appeal permitted to the Court of Appeals for the District 
     of Columbia Circuit and then to the Supreme Court. All courts 
     are required to expedite any such actions to the greatest 
     extent possible, and Members of Congress are granted the 
     right to intervene as of right in any case challenging the 
     constitutionality of any provision of FECA or the public 
     financing provisions in the Internal Revenue Code. Members of 
     Congress may themselves bring such a case.


                            TITLE V--OFFSETS

       Section 501: Offsets--This section would reform a federal 
     irrigation subsidy program by closing a loophole in the 1982 
     Reclamation Reform Act to require a means test to qualify for 
     federal irrigation subsidies. This would ensure that small 
     family farmers, not huge agribusinesses, benefit from federal 
     water pricing policies intended to help small entities 
     struggling to survive. This new approach limits the amount of 
     subsidized irrigation water delivered to any operation in 
     excess of the 960 acre limit that claimed $500,000 or more in 
     gross income. Friends of the Earth in its 2003 Green Scissors 
     report estimated that these provisions would save at least 
     $4.4 billion over 10 years, which is more than sufficient to 
     cover the estimated cost of this bill--$1.1 billion over 4 
     years.


               TITLE VI--SEVERABILITY AND EFFECTIVE DATE

       Section 601: Severability--If any provision of the bill is 
     held unconstitutional, the remainder of the bill will not be 
     affected.
       Section 602: Effective date--The amendments contained in 
     this bill will apply to presidential elections occurring 
     after January 1, 2010.

                          ____________________