The 2012 presidential election was certainly the most expensive in American history. President Obama‘s re-election effort cost $1.1 billion, including nearly $700 million spent directly by his campaign. Mitt Romney‘s campaign spent over $400 million, but he received almost $800 million in additional outside help.
The cost of the 2016 presidential election, however, is expected to surpass these figures. One estimate reaches as high as $5 billion, and Hillary Clinton’s campaign might spend as much as $2 billion.
Presidential elections were not always this pricy.
Following the Watergate scandal, Congress amended the Federal Election Campaign Act (FECA) in 1974, which imposed a host of regulations on federal campaigns. To enforce these regulations, FECA created the Federal Election Commission. Among its responsibilities was releasing government monies to federal candidates, ushering in a new era of campaign finance: publicly funded elections.
In 1976, Jimmy Carter and Gerald Ford relied exclusively on public funding to pay for their campaigns. Sustained by $1 check-off amounts on taxpayers’ filings (later upped to $3 in 1996), the cost of that year’s election was $73 million – down from $90 million spent during the 1972 presidential election.
Many states embraced public funding for elections as well, starting with Iowa, Maine, Rhode Island, and Utah in 1973. By 2001, more than half of the states had some form of publicly funded elections, as did several major cities.
Supporters have noted several benefits of this method of campaign finance.
First, it increases voter engagement. In New York City, which matches $6 for every $1 in individual contributions up to $175, voters have been far more eager to open their wallets for municipal candidates. One study found that in 2009, small donors in the city were three times more likely to contribute to citywide candidates who receive public funding than to state assembly candidates, who do not receive such contributions.
Second, it attracts candidates who otherwise might not have the connections or resources to run for office. One former state senator from Maine — which adopted the Clean Elections Act in 1996 — said the state’s public funding system permitted her to run “without having to figure out how to ask for money from donors” when she really didn’t live in that world.
As a result, Maine has a uniquely blue-collar legislature. While two percent of the members of Congress have a working class background, 14 percent of Maine’s legislature comes from the working class – nearly five times the average for state assemblies across the country.
For many election cycles, public funding has been a popular option where it has been available. In 2008, 80 percent of candidates in Maine opted for this funding mechanism, and in Arizona, the rate has been as high as two-thirds.
But publicly funded elections started to slide into disuse in 2008, when then-candidate Obama decided to forego public funding – the first presidential candidate from a major party to do so since 1976. He turned down a block grant of $84.1 million from the Presidential Election Campaign Fund to free up his fundraising and campaign spending: candidates who receive public funding must refuse private donations and cannot spend more than their allotted amounts.
In 2008, Obama spent $750 million on his successful presidential bid. His opponent, U.S. Senator John McCain — a long-time champion of campaign finance reform – relied on public funding.
Then, the Supreme Court handed down two decisions that severely weakened the efficacy of publicly funded elections.
In 2010, the Supreme Court invalidated a key provision of the 2002 McCain-Feingold bill that amended FECA banning outside groups from issuing “electioneering communications” (such as TV ads) that name a federal candidate shortly before an election. It also removed the ban on groups and individuals from making unlimited contributions to political groups that make “independent expenditures” to influence public opinion. This decision, Citizens United v. FEC, is the primary driver behind the arms race-like escalation in the overall cost of elections.
The following year, the Supreme Court invalidated Arizona’s “trigger” provision, which dispersed more money to a publicly funded candidate if he or she was being outspent by a privately-financed candidate.
The plaintiffs argued that this mechanism discouraged private donors from contributing if they knew their opponents would be assisted by the state and thus claimed it forced them to curtail their constitutional rights.
Penning the 5-4 majority opinion in favor of the plaintiffs in Arizona Free Enterprise v. Bennett, Chief Justice John Roberts wrote, “We hold that Arizona’s matching funds scheme substantially burdens protected political speech without serving a compelling state interest and, therefore, violates the First Amendment.”
Combined, these two decisions severely weakened the incentive for a candidate to limit themselves to public funding. In 2011, Wisconsin scrapped its 33-year-old public funding system. One state senator said, “the state doesn’t have a lot of money and I don’t know anyone who wants to spend money on such a silly thing.”
Since the Bennett ruling, reformers have found inspiration from New York City’s high-ratio, contribution-matching system to renew the appeal of public funding now that publicly funded candidates cannot automatically receive additional resources when they are being outspent.
In 2014, Montgomery County in Maryland approved a bill that encourages candidates to appeal to small donors by rewarding them with high-multiple bonuses. Here is the Washington Post‘s summary of the system, which will go into effect in 2018:
Each dollar of the first $50 contributed by a county resident to a qualifying candidate for county executive is matched with $6 of public funds, turning a $50 contribution into $350. A second $50 contribution to an executive candidate is matched at 4-to-1 and a third $50 at 2-to-1, turning a $150 contribution into $750. Qualifying council candidates will receive $4 of public funds for each of the first $50 from a resident, turning a $50 contribution into $250. A second $50 contribution is matched at 3-to-1 and a third $50 at 2-to-1, turning a $150 contribution into $600.
In Maine, supporters of reform have gathered enough signatures to put a measure on the November ballot that would strengthen the state’s increasingly unpopular public funding system. The proposal essentially triples the amount that statewide candidates can collect if they receive a certain number of $5 contributions – a minor amount that encourages candidates to re-orient their focus toward small donors.
The momentum for this kind of reform has percolated up to the national level.
In June, U.S. Sen. Dick Durbin (D-Ill.) introduced the Fair Elections Now Act, which seeks to implement public funding for congressional races.
The 2014 midterm elections were the most expensive in congressional history, costing $3.77 billion. The number of donors shrank by 11 percent compared to the 2010 midterm elections.
The Fair Elections Now Act would give Americans a $25 refundable tax credit for donations to a congressional campaign. Qualifying candidates would receive a base grant to fund their campaigns if they receive a certain number of contributions from residents of their state. Also, contributions less than or equal to $150 would be matched at a 6-1 ratio.
The Senate bill has 16 Democratic co-sponsors and the support of presidential candidate Bernie Sanders (I-Vt.), but no Republican endorsement.