This first section provides the context for the debate on extending public financing to congressional elections, beginning with a discussion of two major political realities that inform that debate. The first is the presidential public financing system that has been in place since 1976 and has had mixed success in realizing the goals of its original sponsors. The second is the interplay between the concepts of public financing and campaign spending limits, which are often linked but which have very distinct characteristics; the 1976 landmark Supreme Court decision in Buckley v. Valeo contributed to that linkage because of its allowance for only voluntary spending limits, such as in conjunction with a public financing system. The section concludes with a summary of arguments for and against public financing, arguments which have not changed in essence over time but which have been shaped by the political realities noted above. The second section provides a historical review of efforts in Congress to enact public financing of its elections (although some attention is paid to presidential public financing as a precursor). The section begins with a brief review of early congressional interest and activity in the 20 th century, followed by a more detailed Congress-by-Congress discussion beginning with the 90 th Congress. Special attention is paid to the two periods in which congressional activity on public financing was the greatest: the Watergate-focused 93 rd Congress and the 100 th -103 rd Congresses. Public finance bills were passed by at least one chamber in those two periods, although the latter period was marked by a move toward downplaying public funds per se in favor of the broader concept of public benefits. The section concludes with a review of the major features of congressional proposals, presented as policy options to choose from in devising a congressional public finance system. The third section examines the experience of the 16 states that provide some form of public subsidies to candidates for state office. This section features a table ( Table 1 ) detailing these systems, and concludes with an analysis of the impact of public finance programs in the states. It is important to note from the outset, however, that this report does not examine recent constitutional and other legal challenges to some states' public financing programs. As developments in this area become clearer over time, this report will be updated. The fourth section offers a discussion of public opinion data on support for public financing of elections, as well as for the related idea of campaign spending limits. Public opinion is not as extensive on these questions as in the 1970s, when the idea of public financing was particularly prominent. The final section reviews the experience from public finance systems at both the state and presidential levels to offer some overarching observations for Congress possibly to consider in devising a public finance system for its elections, should it choose to do so. The report concludes with appendices to augment the information in the section on congressional proposals. Appendix A is a table ( Table A -1 ) providing details of the public finance (or benefits) measures that have passed either chamber (from 1973 -1993); because they passed at least one chamber, these bills are perhaps the most important for Congress to review before beginning a fresher look at the idea. To allow a more contemporary look at how recent public finance proposals have evolved, appendices provide detailed summaries of public financing legislation introduced in recent congresses. Two bills that propose to publicly finance congressional campaigns have been introduced in the 112 th Congress. Both bills, H.R. 1404 (Larson) and S. 750 (Durbin), are companion measures. These latest versions of the Fair Elections Now Act (FENA) are substantially similar, with some changes in proposed benefits to participating candidates, to versions introduced during the 111 th Congress. A third bill introduced in the 112 th Congress, S. 749 (Durbin), provides a separate funding mechanism for the public financing program proposed in S. 750 . Specifically, S. 749 would fund the public financing program through a 0.5% tax on those holding government contracts of more than $10 million. Additional discussion appears in the " 112th Congress " section of this report and in Appendix E at the end of this report. While public financing of congressional elections has been advocated for a century, contemporary discussions of these proposals are informed by two basic political realities of the past 30 years. First, the nation has had public financing in presidential elections since 1976. That system serves both as a model for proposals to extend public financing to congressional elections and as a case study of how a congressional system might and might not be structured. Second, in striking down mandatory expenditure limits in 1976 while allowing voluntary limits in the context of a public finance system, the Supreme Court's Buckley v. Valeo ruling resulted in a closer linkage between the distinct concepts of public subsidies for election campaigns and limitations on campaign spending. Since 1976, public funds have helped finance presidential elections, with the level of funds determined by a taxpayer designations on a voluntary check-off. This system was established initially under the Revenue Act of 1971 and augmented by the Federal Election Campaign Act (FECA) Amendments of 1974. Candidates who meet eligibility requirements and agree to voluntary limits on campaign expenditures are eligible for matching funds in the primaries. In the general election, major party candidates automatically qualify for full subsidies equal to the spending limit; minor party and independent candidates may also qualify for public funds by meeting specified criteria. Also, political parties may receive funding for their nominating conventions. Additional discussion of the provisions and evolution of the presidential public financing program appear in another CRS product. At the outset of any discussion on public financing proposals, it is important to address the question of expenditure limits because, almost invariably, legislative proposals for public funding are linked with candidates' adherence to spending limits. (In fact, the absence of spending limits in some public financing proposals, first offered in the 111 th Congress, marks a notable departure from most proposed public financing programs.) Despite this common linkage, public financing and spending limits are distinct concepts, with distinct potential benefits and drawbacks. Public financing of elections, at its core, is aimed at reducing reliance by politicians on private, interested sources of money for their elections. Expenditure limits are essentially aimed at curbing rising and, in the view of many, excessive amounts of money spent on elections. In fact, from the time public financing was first proposed by President Theodore Roosevelt in 1907 until the Supreme Court's 1976 ruling in Buckley v. Valeo (424 U.S. 1 (1976)), the impetus for passage stemmed more from the concern over the source of campaign money than the overall amount spent. In that landmark ruling, the Court struck down mandatory spending limits (such as those imposed on congressional candidates by the FECA Amendments of 1974), but allowed that in a voluntary system of public financing, it was permissible to require candidate adherence to spending limits as a condition of a government-provided benefit (i.e., public funds). Hence, spending limits in conjunction with public funding would be permissible because candidates voluntarily accepted them. In light of the Buckley decision, the prevailing view among policymakers has been that public financing offers the only realistic means of controlling campaign expenditures in congressional elections, short of enacting a constitutional amendment to allow mandatory limits (which Congress has refused to support on several occasions). Finally, it should be noted that some of the goals sought in the public funding and spending limit measures have been addressed in other legislation, which has been less sweeping yet often with significant bipartisan support. Proposals to lower campaign costs, without spending limits, have been prominent in Congress at least until enactment of the Bipartisan Campaign Reform Act of 2002 (BCRA). Bills to provide free or reduced-rate broadcast time and postal rates have sought to reduce campaign costs and the need for money, without the possibly negative effects of arbitrary limits. Bills to provide for tax credits for small individual contributions have sought to encourage a greater role for citizens vis-à-vis organized interest groups. These measures offer the potential of realizing some of the aims of the more comprehensive measures but without some of the perceived pitfalls. A few major points are common arguments in favor of public financing. Supporters say that public financing can reduce the threat of political corruption, enhance electoral competition, and allow candidates to focus on issues rather than raising money. To many observers, the amount of money spent in elections today is arguably corrupting the political system, forcing candidates and officeholders to spend increasing amounts of time raising money, possibly creating pressure on them to rely on affluent individuals and special interests for campaign assistance, conceivably deterring candidates without personal fortunes from attempting to run for office, and leaving an impression among some voters that elections are "bought and sold." Accordingly, one of the most prominent goals behind public financing is reducing the potential for corruption or the appearance of corruption. As political scientists Donald A. Gross and Robert K. Goidel have explained, "Public subsidies to candidates, whether in the form of direct grants or matching funds, are seen as a way to minimize the undue influence and corruption often ascribed to contributors and partisan fundraising." Many former lawmakers, interest group representatives, political professionals, and academic experts submitted written testimony for the McConnell v. FEC  lawsuit heard by a U.S. District Court and the Supreme Court of the United States in their consideration of BCRA. Some of this testimony included empirical analysis of claims about potentially corrupting influences from private money in campaign politics and related issues. Other public financing goals relate to electoral competition. Public financing provides candidates—regardless of personal wealth—with financial resources to wage campaigns. This allows candidates who might not otherwise run for office to do so. As is noted in the discussion of states' experiences with public financing, most programs require that candidates demonstrate political viability before being eligible for funds. If more candidates have access to funds, supporters say that electoral competition should increase. Finally, public financing is attractive to some because it is one of the few constitutional ways to limit campaign spending—a major concern among campaign reformers. Although the Supreme Court's 1976 Buckley v. Valeo ruling held that campaign spending generally could not be subjected to mandatory limits, candidates could be required to limit spending in exchange for receiving public funding. As is discussed elsewhere in this report, some public financing systems—including the presidential one—are today in jeopardy because major candidates fear that observing spending limits associated with public financing will preclude them from spending enough money to wage competitive campaigns. Objections to public financing are also varied. Many are rooted in philosophical opposition to funding elections with taxpayer money, compelling taxpayers to support candidates whose views are antithetical to theirs, and adding another government program in the face of some cynicism toward government spending. Opponents also raise administrative concerns: how can a system be devised that accounts for different natures of districts and states, with different styles of campaigning and disparate media costs, and is fair to all candidates—incumbent, challenger, or open-seat, major or minor party, serious or "longshot"? Similarly, opponents assert that public financing could distort elections by imposing the same system on 50 different states with different degrees of competitiveness in individual races and by providing even greater advantages to incumbents than already exist, thereby decreasing the competitiveness of elections. In view of the relatively low rate of participation in the voluntary check-off for the existing presidential system, they see little evidence that the public would favor such a plan. Some public financing opponents believe that government-funded campaign subsides amount to "welfare for politicians," and are an inappropriate use of taxpayer dollars. These opponents argue that public financing could coerce candidates into limiting their campaign spending—viewed as a form of political speech—in exchange for funding, or that it could force taxpayers to indirectly fund campaign messages they might find objectionable. On a related note, opponents suggest that public financing could waste taxpayer money on "fringe" candidates who represent political views that may be far outside the mainstream and who have little chance of winning elections. In response to arguments that public funding is necessary to limit campaign expenditures, those opposed to public financing often argue that campaign spending is not high, especially compared with commercial advertising budgets or spending on consumer goods. They argue that worthy candidates will win public support without government intervention via public financing. Some researchers also suggest that concerns about rising campaign costs are overstated, and that most campaign fundraising comes from individuals who give less than the legal limit. Finally, opponents of public financing sometimes argue that proponents fail to sufficiently support their arguments in favor of public financing, relying instead on the "self-evidence" of its appeal. For example, although the appearance of corruption or potential corruption is a common argument in favor of public financing, political scientists Jeffrey Milyo and David Primo have found that scholarly research on the topic is limited or anecdotal. The same, they say, is true for fears about declining trust in government and declining voter turnout, which some contend could be buoyed by public financing. While the idea of public financing of federal elections was first proposed in 1907, it was not until the 1950s that bills were first introduced in Congress to implement such a plan. Since that time, legislative proposals have been offered in nearly every Congress, while the extent of legislative activity around the issue has varied according to the political climate and circumstances. In two very active periods, bills to extend public financing to congressional elections have passed one or both houses but were never enacted. In the first period, during the 93 rd Congress (1973-1974), the Senate twice passed bills for public funding in congressional elections, widely seen as a response to the unfolding Watergate scandal. In 1973, a bill was passed providing full subsidies (equal to mandatory spending limits) to major party candidates in House and Senate general elections. In 1974, a bill was passed providing matching funds in House and Senate primaries and full subsidies (equal to the voluntary spending limits) to major party candidates in House and Senate general elections. Both provisions were later deleted in conference, in view of some strong opposition in the House. In the second period, the 100 th through 103 rd Congresses (1987-1993), the House and Senate spent considerable amounts of time debating bills that featured the twin ideas of voluntary spending limits and public financing. In the 101 st , 102 nd , and 103 rd Congresses, both chambers actually passed such bills; the 102 nd Congress bill was vetoed by President George H.W. Bush, but the bills in the other two Congresses were never reconciled in conference. In contrast to the first period, when one of the Senate-passed bills covered both primary and general elections, bills in the second period offered benefits only for general election candidates. More broadly, efforts in the more recent period reflected a move toward paring down the level of public treasury funds going to campaigns, in light of a less favorable political climate. The emphasis in this second period shifted from public funds per se to public benefits . Public benefits were those either financed with public resources—whether directly, as with public subsidies, or indirectly, as with revenue forgone from tax incentives or postal discounts—or mandated by government action, such as requirements for reduced broadcast rates, at no cost to the U.S. Treasury. The common element was that they all constituted incentives to participation in a voluntary system based on campaign spending limits. The earliest suggestion to Congress of public subsidies for election campaigns was apparently made by President Theodore Roosevelt in 1907 in his annual message to Congress. Roosevelt saw reforms such as requiring disclosure and prohibiting corporate contributions as worthwhile but difficult to enforce and inadequate in deterring "an unscrupulous man of unlimited means from buying his own way into office." He suggested an admittedly radical approach of providing ample appropriations to the major national political parties to fund their "organization and machinery." Parties receiving federal monies were to be limited to a fixed amount that could be raised from individual contributors, all of which would be disclosed to the public. It is unclear from the text of his message (the relevant portion of which is reprinted below) whether Roosevelt intended this plan to be limited to presidential, as opposed to all federal, campaigns. At the time, given the political parties' central role in financing all election campaigns, the distinction may not have been as great as it would be today, when candidates take the lead role in financing their campaigns. In any case, the section of the message was titled "Presidential Campaign Expenses." Under our form of government voting is not merely a right but a duty, and, moreover, a fundamental and necessary duty if a man is to be a good citizen. It is well to provide that corporations shall not contribute to Presidential or National campaigns, and furthermore to provide for the publication of both contributions and expenditures. There is, however, always danger in laws of this kind, which from their very nature are difficult of enforcement; the danger being lest they be obeyed only by the honest, and disobeyed by the unscrupulous, so as to act only as a penalty upon honest men. Moreover, no such law would hamper an unscrupulous man of unlimited means from buying his own way into office. There is a very radical measure which would, I believe, work a substantial improvement in our system of conducting a campaign, although I am well aware that it will take some time for people so to familiarize themselves with such a proposal as to be willing to consider its adoption. The need for collecting large campaign funds would vanish if Congress provided an appropriation for the proper and legitimate expenses of each of the great national parties, an appropriation ample enough to meet the necessity for thorough organization and machinery, which requires a large expenditure of money. Then the stipulation should be made that no party receiving campaign funds from the Treasury should accept more than a fixed amount from any individual subscriber or donor; and the necessary publicity for receipts and expenditures could without difficulty be provided. Roosevelt was not exaggerating when he commented that it would take "some time" for people to familiarize themselves with such a proposal. From the mid-1920s through the 1970s, select and special committees had been established by every Congress (predominantly on the Senate side) to investigate campaign expenditures—presidential or congressional—in recent elections. Reports issued at the conclusion of the work of these committees often included recommendations designed to correct shortcomings perceived in existing campaign finance practices. In 1937, during the 75 th Congress, the report of the Senate's Special Committee to Investigate Campaign Expenditures of Presidential, Vice Presidential, and Senatorial Candidates in 1936 was released. Included in its section of recommendations was a proposal for public funding of all federal elections, which the committee passed along without judgment as to its merits. All private contributions were to be prohibited under this plan. Under recommendation no. 9, the report said, It has been suggested that private contributions to political campaigns be prohibited entirely and that instead all election campaign expenses should be defrayed from public funds. Congress apparently took no action on this proposal. Interest in public funding of political campaigns has often been aroused by allegations of unethical conduct by public officials for accepting particular campaign contributions. Such was the case on July 6, 1949, when Senator Henry Cabot Lodge, Jr., introduced a resolution to commission a study by the Committee on Rules and Administration on the mechanics of establishing a system of public funding of presidential campaigns. In introducing his resolution, Lodge responded to rumors government corruption. The resolution—S.Res. 132—read as follows: Resolved. That the Senate Committee on Rules and Administration is authorized and directed to make a full and complete study and investigation for the purpose of obtaining such information with respect to the problems involved in financing with governmental funds presidential election campaigns in the United States as may be necessary to enable the committee to formulate and report at the earliest practicable date a bill providing for such method of financing presidential election campaigns. Lodge's support for this concept, the details of which he envisioned coming out of a congressional study, was summed up in this excerpt from his floor statement: All this talk of an "office market," and of putting high executive and diplomatic positions on the auction block—all this breeding of suspicion and cynicism would disappear, I believe, overnight if the primary cause of the evil were obliterated at its root. If no private individual or officer of a corporation were permitted by statute to contribute one cent to a presidential campaign there would be a far cleaner atmosphere surrounding political appointments, and this would encourage public-spirited men holding public office. If there are no bidders, there can be no auction. Lodge acknowledged that the same principle could also be applied to other offices, but he was limiting his suggestion to presidential races because of the enormous number of appointments to public office at the President's disposal. Apparently the type of corruption which motivated Lodge in S.Res. 132 was the selling of government positions rather than the broader notion of trading influence or access on policy questions for campaign contributions. A concern over the latter possibility would be a likely prerequisite for any proposal for public financing of congressional campaigns. No action was taken on S.Res. 132 by the Committee on Rules and Administration. During the 84 th Congress, the name of Theodore Roosevelt was invoked when the first public funding bills were introduced in Congress, almost 50 years after being suggested by Roosevelt. On February 20, 1956, Senator Richard Neuberger introduced S. 3242, to provide for direct public subsidies for all major party campaigns for federal office, co-sponsored initially by Senators Wayne Morse, James Murray, Paul Douglas, John Sparkman, and Mike Mansfield. The identical bill was submitted two days later in the House as H.R. 9488 by Representative Frank Thompson. "Sometimes I call my bill the Teddy Roosevelt bill, because of its origin," observed Neuberger; Thompson commented that the bill could "appropriately, enough, I think be called the Theodore Roosevelt Campaign Contributions Act of 1956." Neuberger, who quickly became identified as the chief congressional proponent of public financing at the time, declared that S. 3242 was "the most far-reaching bill ever proposed to strike loose the financial fetters from our democratic processes of government." The final impetus for the bill was the recent revelation of a large campaign contribution offered to a Senator by an oil company during debate on removing federal controls from natural gas prices. The alleged bribery attempt contributed to Neuberger's view that, These contributions, in my opinion, have become an unbearable yoke to many of the men who must accept them. They even have become onerous and objectionable to the individuals who parcel out such contributions. Neuberger based his proposal on the belief that the system of raising campaign funds from private sources hampered the independence of public officials, created doubts among the public about the integrity of the government, and created an inequality in gaining access to voters by various candidates. He continued in his statement to articulate what would remain the major motivation for later advocates of publicly financed elections: An undemocratic element is introduced when one nominee can eclipse his opponent not because of superiority of ability or of his policies, but merely through a preponderance of coin of the realm .... We would not dream of permitting our Presidents or our Senators and Representatives to draw their pay from a private payroll or in the form of private contributions; they get paid by the public for whom they act. Why, then, leave their campaigns for these offices to be lavishly financed from private sources? Neuberger's bill provided for the allotment of federal funds to the major political parties, to be used for campaign expenditures of its candidates for federal office. (In the 1950s, election financing was still substantially conducted by the parties, in contrast with today, when party support is considered ancillary to the expenditures of the candidates themselves.) A major party was defined as one which received at least 10% of the vote in the previous national election. The total federal contribution for a two-year period would be determined by multiplying 20 cents by the average number of votes cast in the previous two presidential elections (for presidential election years) and 15 cents by the average number of votes cast in the previous two House elections (for non-presidential election years). The system would be conducted on a voluntary basis and would allow for parties to accept donations from private sources, provided that no individual's contribution exceeded $100 and that the total raised from these sources did not exceed the total federal donation. The term "matching funds" was used by Neuberger to describe the system, but it differed from the present system of matching funds in presidential primaries in that the federal subsidy in the latter case is determined by the amount raised privately; in the Neuberger proposal, the amount that could be raised privately was to be determined by how much the federal subsidy would be. The proposed system was to be administered by a Federal Campaign Contributions Board, to include an administrator and one representative from each major party. During the 1950s and 1960s, Congress turned its attention to the Federal Corrupt Practices Act, the law governing campaign financing since 1925, and to its perceived inadequacies both in limiting amounts of money raised and spent in elections and in promoting transparency. Numerous hearings were held and bills introduced aimed at improving the nation's campaign finance laws generally. A few bills providing direct public financing were introduced in nearly every Congress since the 84 th Congress (1955-1956), but most of these were proposed and supported by a small minority of Members. A greater number of proposals, in this period, however, did include indirect public financing of elections, in the form of tax credits and deductions. In 1962, a report was released by the President's Commission on Campaign Costs, established the previous year by President John F. Kennedy to make recommendations for improving campaign finance practices and laws. While the report was ostensibly focused on presidential elections, its findings were more broadly applicable to all federal elections because of the extent to which the political parties were at that time the major financiers of all federal campaigns. Its recommendations, which included tax incentives to encourage individual donations to political parties, did not include the proposal urged on it by many for direct public subsidies. Rather, the commission expressed concern for public financing's potential to discourage citizen participation in campaigns, to redistribute power arbitrarily within the parties, to encourage fraud, and to be administered unfairly. However, the commission expressed interest in a "matching incentive system," whereby small individual donations to parties would be equally matched with U.S. Treasury funds. Such a system found favor with the commission because the amount of subsidy would be determined not by governmental action but by "private voluntary action." The 1962 commission report thus advanced the concept of direct government subsidies of campaigns for federal office. In 1966, Congress took its first step toward public subsidies in federal elections when it enacted the Presidential Campaign Fund Act, providing public subsidies to major political parties for their presidential campaigns. The proposal, sponsored by Senator Russell Long (and which he initially introduced as S. 3469), was added by the Senate Finance Committee as an amendment to H.R. 13103, the Foreign Investors Tax Act. The act was signed into law November 13, 1966, by President Johnson, as P.L. 89-809. The following year, amidst congressional pressure to repeal the act, an amendment was added to the Investment Tax Credit bill (H.R. 6950) to make the act inoperative until Congress provided written guidelines on how the funds were to be distributed. With approval of the bill as P.L. 90-26, the Presidential Campaign Fund Act was effectively killed before it was ever implemented. In the 90 th Congress, the first public finance bill that covered congressional elections was reported from committee. As reported by the Senate Finance Committee, H.R. 4890, the Honest Elections Act of 1967, provided for optional public financing for general election campaigns of presidential, vice presidential, and senatorial candidates (the committee left the extension of the system to House elections to that body). The system was based on permanent appropriations of the funding necessary, with the stipulation that no private funds could be raised from 60 days before to 30 days after the general election. Funds were to be provided directly to candidates, not through the parties, as earlier bills had done, perhaps in recognition of the onset of candidacies in the 1960s that were more independent of the party structure. The bill was opposed by the committee's six Republican members, who protested its financial burden to taxpayers and its unfairness to taxpayers who were thus forced to support candidates they opposed. The measure never came to the Senate for a vote. The 92 nd Congress marked a milestone in the federal government's evolving role in election finance, with enactment of FECA to replace the Corrupt Practices Act of 1925 as the nation's chief statute governing campaign finance and also the enactment of public financing in presidential general elections. The latter was added as a floor amendment by Senator John Pastore during Senate consideration of the Revenue Act of 1971. It set up the Presidential Election Campaign Fund, financed through a $1 tax check-off (as was first enacted in 1966), to fund presidential general election campaigns. The Pastore amendment also included tax credits and deductions for political contributions, an indirect form of public financing. The amendment survived Senate debate and the House-Senate conference; the underlying legislation survived a veto threat by President Nixon by delaying implementation of the public finance system to the 1976 election. The Revenue Act of 1971 was signed into law December 10, 1971 (P.L. 92-178). In the 93 rd Congress, public financing of elections became a major and continuing issue before Congress for the first time, largely in response to the Watergate scandal unfolding in 1973 and 1974. To the extent that large and unaccountable sums of campaign money seemed to be connected to the scandal, many Members came to see the newly enacted FECA of 1971, which essentially required uniform disclosure of campaign money, as inadequate in preventing the kinds of abuses then being uncovered. In addition, public financing of presidential elections was not due to begin until 1976. Those focusing on campaign finance law amendments came to center on the ideas of limits on contributions and expenditures, and on extending public financing to congressional elections. Some 76 bills were introduced in the House and Senate to provide direct subsidies in congressional elections; in the House, more than 140 Members cosponsored such bills. In July 1973, public finance supporters, led by Senators Edward Kennedy and Hugh Scott, tried to add congressional public funding to the 1973 FECA Amendments. The Kennedy-Scott amendment (no. 406) to S. 372 would have provided public subsidies in House and Senate general elections, with major party candidates eligible for a subsidy equal to the proposed spending limit. The amendment was tabled on a 53-38 vote. Later in 1973, the Senate passed public financing of congressional elections, the first time either chamber had ever done so. It took the form of amendment no. 651, offered by Senators Kennedy, Scott, and others, to H.R. 11104 , the Public Debt Ceiling bill. As added on the Senate floor by a 52-40 vote, the amendment provided for mandatory public financing in House and Senate general elections. Major party House candidates were eligible to receive the greater of 15 cents per eligible voter, or $90,000; major party Senate candidates were eligible for the greater of 15 cents per eligible voter, or $175,000; private contributions were essentially eliminated in the general election (minor party candidates were eligible for funding based on their parties' vote share in the previous election). H.R. 11104 , as amended, passed the Senate that day by a 58-34 vote. This provision was removed, however, when the House refused to accept the Senate amendments. A leadership agreement resulted in the matter being dropped from the public debt limit bill and killing the issue for the first session of the 93 rd Congress. see Appendix A for details on this measure.) By 1974, after a year of the unfolding Watergate scandal, support for public financing of elections was growing in Congress. In February 1974, the Senate Rules and Administration Committee reported a new version of the FECA Amendments (in lieu of S. 372 ), which included public funding in presidential and congressional primary and general elections. As reported with only one dissenting vote, S. 3044 created a system for all federal elections, which is still in place in presidential elections: a voluntary system, with matching funds in the primaries and a fixed subsidy in the general election, all funded from the check-off on federal tax returns. The committee report expressed the view then in ascendancy about the need for public funding: The only way in which Congress can eliminate reliance on large private contributions and still ensure adequate presentation to the electorate of competing candidates is through comprehensive public financing.... The election of federal officials is not a private affair. It is the foundation of our government. As Senator Mansfield recently observed, it is now clear that "we shall not finally come to grips with the problems except as we are prepared to pay for the public business of elections with public funds." Senate debate on S. 3044 lasted for 13 days, in which proponents were able to defeat four amendments to drop public financing completely, two amendments to reduce the level of public funds, one amendment to reduce funding to incumbents by 30%, and one amendment to add three free mass mailings to general election candidates. The Senate passed S. 3044 on April 11, 1974, by a 53-32 vote, following a second, and successful, vote to invoke cloture. (See Appendix A for details on this measure.) Public financing of congressional elections, however, was not included in the House Administration Committee's reported version of the 1974 FECA Amendments, H.R. 16090 . Supporters, led by Representatives John Anderson and Morris Udall, attempted to add a voluntary matching system for House and Senate general elections, but their amendment to H.R. 16090 was defeated by a 187-228 vote. Public financing of congressional elections was a particularly contentious issue in the House-Senate conference on S. 3044 , but ultimately it was dropped, while the presidential public financing provisions were left intact. That bill did, however, leave spending limits (without public funding) in place for congressional elections, at different levels than in S. 3044 initially: $70,000 for House primaries and general elections, the greater of eight cents per eligible voter, or $100,000, in Senate primaries, and the greater of 12 cents per eligible voter, or $150,000, in Senate general elections. Also, limits on spending from personal and family resources were imposed on House candidates ($25,000) and Senate candidates ($35,000). Activity on behalf of public financing of congressional elections subsided considerably after the 93 rd Congress, which had seen particularly strong momentum for governmental and electoral reforms as the Watergate scandal was unfolding. Public finance supporters did, however, make several unsuccessful attempts to revive the issue in the 94 th through 96 th Congresses. During consideration of the FECA Amendments of 1976 in the 94 th Congress, Senate supporters of public financing failed to get congressional public financing included in the bill reported by the Rules and Administration Committee ( S. 3065 ). House supporters, led by Representative Phil Burton, offered a floor amendment to the FECA Amendments ( H.R. 12406 ), providing for matching funds in House and Senate general elections; the amendment failed on a 121-274 vote. The 95 th Congress began auspiciously for public finance supporters with the announced support of House Speaker Thomas P. O'Neill, Jr., and Senate Majority Leader Robert Byrd, with the elevation of public finance supporter Frank Thompson to House Administration chairman, and with a series of election reform measures, including public financing of congressional elections, by President Jimmy Carter. The Senate Rules and Administration Committee considered S. 926 , which, as introduced by Senators Kennedy, Dick Clark, Alan Cranston, Charles Mathias, and Russell Schweicker, proposed matching funds in Senate primaries and a combination of subsidies and matching funds in Senate general elections. The reported version of S. 926 , however, deleted funding for primary elections, as suggested by sponsors, in order to increase chances for passage in the House. Opposition to public financing was strong enough to force three cloture votes to limit debate on S. 926 . After the final cloture vote failed, the Senate voted 58-39 for an amendment by Senator James Allen to delete public financing of Senate general elections. The new House leadership support led to six days of House Administration Committee hearings on public financing of congressional elections, although no consensus developed over what approach to choose. An attempt to report a bill for partial public funding of House general elections failed in October 1977, after approval of two amendments offered by public finance opponents which added to the costs of the system and were seen as making the bill more difficult to pass (one extended funding to primaries; the other extended funding to all candidates who met a contribution threshold). Following adoption of these amendments, Chairman Thompson discontinued the markup, saying the votes were lacking to report a measure. On two occasions during the second session of the 95 th Congress, the House narrowly defeated rules to allow consideration of public finance measures. An amendment to H.R. 11315 , intended as a non-controversial set of amendments to federal campaign finance law, was offered in March 1978 by Representatives Thomas Foley and Barber Conable, proposing a matching fund system in House general elections. The underlying bill became embroiled in controversy, however, thus poisoning the atmosphere for House consideration of the public finance amendment as well. The open rule, allowing for consideration of the Foley-Conable amendment, was defeated on a 198-209 vote on March 21, 1978. Included in those voting against the rule were some 25 Republicans who had reportedly committed to voting for the public finance amendment. A second effort by public finance supporters came with a proposed amendment to the Federal Election Commission (FEC) authorization bill for FY1979 ( H.R. 11983 ). The amendment, similar to the one offered in March 1978, was offered by Representatives Foley, Conable, Anderson, and Abner Mikva. In contrast with the situation in March, the reported rule was a closed one, thus prohibiting amendments on the floor. An effort to defeat the proposed rule was made by public finance supporters, but it failed on a 213-196 vote on July 19, 1978. That vote, which observers saw as reflecting congressional sentiment on public financing, ended consideration of the issue for the 95 th Congress. As the 96 th Congress began, the House leadership accorded the efforts of public finance advocates—led by Representatives Foley, Conable, Anderson, Udall, Mikva, and Tim Wirth—priority status by designating their proposal H.R. 1 . Similar to the failed amendments of the 95 th Congress, the bill provided for matching funds in House general elections, in conjunction with voluntary spending limits. The House Administration Committee held five days of hearings in March 1979 on this and other public finance bills. On May 24, 1979, despite efforts by supporters to gain more support, the bill failed to be reported, on a 8-17 vote. With that vote, the momentum for extending public financing to congressional elections that had begun in the 93 rd Congress came to an end. While public financing remained an objective for many in Congress and bills continued to be introduced, the 97 th through 99 th Congresses saw no concerted effort in pursuit of this goal. In part, this reflected a changed political environment, with Senate control during this period (1981-1987) shifting to Republicans, generally less supportive of public financing than Democrats, and with frustration over the failure to enact public financing in the 93 rd through 96 th Congresses. Those advocating campaign finance reform set their sights on a less sweeping goal during the 1980s, and much of the 1990s: restricting the growing role of political action committees (PACs), the political agents of interest groups, in the financing of congressional elections. Like public financing, curbs on PACs were intended to lessen the importance of money, particularly "interested" money, in elections. Unlike public financing, restrictions on PACs did not involve the highly controversial issue of using tax revenues to fund campaigns and the invariably associated goal of limits on campaign spending. But, despite 19 days of hearings in the 97 th through 99 th Congresses, partisan stalemate on the PAC issue kept any major campaign finance bills from floor votes. The political environment again shifted in the 100 th Congress, with a Democratic majority in the Senate following the 1986 elections. With this change, the goal of campaign reform advocates quickly extended from curbs on PACs to their longer-standing objective of public financing and campaign spending limits in congressional elections. The twin ideas of voluntary spending limits and participation incentives in the form of public funds or some form of cost-saving benefits became the cornerstone of the leading reform proposals through the 105 th Congress. On the first day of the 100 th Congress, Senate Majority Leader Robert Byrd joined Senator David Boren in cosponsoring S. 2 , which became the focus of reform efforts and eventually gained 50 additional cosponsors. As reported by the Rules and Administration Committee, the bill featured public funding for Senate general election candidates who agreed to spending limits (in both their primary and general election campaigns) and aggregate PAC receipts limits for House and Senate candidates. The public funding amount for major party candidates was equal to 80% of the state's spending limit for the general election. The measure was brought to the floor in June 1987, in the face of strong Republican opposition and the stated intention of opponents to filibuster the measure. After a failed vote to invoke cloture, sponsors of S. 2 offered an amendment to change the public funding component from a full subsidy for major party candidates to a matching fund system, thereby reducing in half the cost of the subsidy (and changing the expenditure limit formula as well). Opponents were not mollified, and four successive cloture votes in June 1987 also failed. Sponsors made yet another attempt to scale back the public funds component of the bill, in an effort to gain the needed votes to overcome the filibuster. The second substitute amendment provided subsidies only to those whose opponents exceeded the voluntary limits, as both a disincentive to the large spender and as a means of "leveling the playing field." In addition, the substitute offered lower postal and broadcast rates to candidates who agreed to abide by the voluntary spending limits, both as an incentive to participation in the system and as a means of curbing campaign costs. This change also proved insufficient to ameliorate the opposition, and, following three additional failed cloture votes, the measure was pulled from further consideration in February 1988. House and Senate leaders offered and enabled passage of bills featuring spending limits and public benefits (the concept of public financing per se became broadened to public benefits as Members sought ways to reduce the level of direct treasury funding to campaigns). The Senate Rules and Administration Committee reported S. 137 (Boren-Mitchell), based on the final version of S. 2 in the 100 th Congress, with spending limits, public benefits, and a PAC receipts cap. A substitute was offered May 11, 1990, reflecting several features aimed at increasing support for a public benefits and spending limits system. Public funds per se, in the form of direct cash payments to candidates, were to be triggered only on a contingency basis, to compensate participating candidates against free-spending opponents and independent expenditures against them (or for their opponents). The principal subsidy for all participants was to take the form of broadcast communication vouchers, whereby broadcasters would be reimbursed with federal funds but no funds would be transmitted directly to candidates. The other benefits were a reduced broadcast rate, through requiring the lowest unit rate be made available only to participating candidates (and making such time not subject to preemption), and a reduced postal rate; neither of these benefits involved direct payments to candidates although the postal benefit did involve revenue loss to the U.S. Postal Service. Even the spending limits, based on the same population-based formula as was used in the 100 th Congress bill, were adjusted as a means of increasing Senate support, with the provision for an additional 25% in allowable spending from small in-state donors. Senate debate began July 30, 1990, and encompassed 16 roll-call votes on amendments, including one by Senator Mitch McConnell to strike public funds entirely (defeated by 46-49) and another by Senator John Kerry to greatly increase the level of public funds (defeated by 38-60). On August 1, 1990, the Senate passed S. 137 on a 59-40 vote, with five Republicans for and only one Democrat against. It featured voluntary Senate spending limits, communication vouchers, postal and broadcast discounts, and subsidies to match independent expenditures and wealthy opponents, plus other campaign finance provisions. (See Appendix A for details on this measure.) In the House, the Democratic leadership offered a measure which went even further than the Senate bill in reducing the role of public funds as an incentive to adhering to spending limits. In exchange for agreeing to spending limits, which were set at $550,000 for a two-year election cycle (and an additional $165,000 in the case of a nominee who won a competitive primary), H.R. 5400 (Swift) offered House general election candidates three benefits, none of which involved direct payments to candidates. These included lower rates on first- and third-class mailings in the last 90 days of an election, one free radio or TV spot for every two purchased, and a 100% tax credit for in-state contributors (up to $50, or $100 on joint returns). While public funding was involved in H.R. 5400 , it took a less direct form than with candidate subsidies. H.R. 5400 was passed by the House on August 3, 1990, by a 255-155 vote. (See Appendix A for details on this measure.) A conference committee was appointed, but, faced with large differences between H.R. 5400 and S. 137 and a presidential veto, it never met. Public financing of congressional elections advanced further in the legislative process during the 102 nd Congress than ever before or since. Bills comparable to those passed in the 101 st Congress were approved by the Senate and House and reconciled in conference, but vetoed by President George H.W. Bush. On March 20, 1991, the Senate Rules and Administration Committee reported S. 3 (Mitchell-Boren), similar to S. 137 (101 st Congress). When Senate debate began May 15, the Boren substitute amendment was incorporated into S. 3 . Debate took place over six days and encompassed 21 roll-call amendment votes, including one by Senator McConnell to eliminate the public funding and spending limits from the bill (defeated on a 42-56 vote) and one by Senator Kerry to increase vastly the public funding level in the bill (defeated on a 39-58 vote). On May 23, 1991, the Senate passed S. 3 on a 56-42 vote, with all but five Republicans voting against and all but five Democrats in favor. As passed, S. 3 included voluntary Senate spending limits, an extra 25% allowance in spending from small in-state donations, broadcast communication vouchers, broadcast and postal discounts, and conditional subsidies to match non-complying opponents and independent expenditures. (See Appendix A for details on this measure.) The House Administration Committee's Task Force on Campaign Finance Reform led to a Democratic bill, H.R. 3750 (Gejdenson), reported by the committee on November 12, 1991, and amended by the Rules Committee on November 23. The bill replaced the free TV and radio time and the tax credit in the 101 st Congress bill with a matching fund system, while leaving some form of reduced mailing rates. But concerns over perceived unpopularity of public funding led sponsors to omit provisions to finance benefits, beyond allowing voluntary contributions to the Make Democracy Work Fund, in the version brought to the House floor. The House passed H.R. 3750 on November 25, 1991, by a 273-156 vote. As passed, it featured voluntary House spending limits, in exchange for matching funds and lower postal rates, with extra spending for runoffs or close primaries and extra matching funds to offset non-complying opponents and independent expenditures. (See Appendix A for details on this measure.) A conference committee was appointed to reconcile the two passed bills and filed its report April 3, 1992 (amended on April 8). The conference bill combined features of S. 3 and H.R. 3750 , leaving House and Senate spending limits and public benefits largely intact for their own candidates. Major changes in the conference version centered around other issues, such as PAC contribution limits, soft money, and bundling. The conference also delayed implementation of the spending limits and public funding systems pending enactment of a funding mechanism. (See Appendix A for details on this measure.) The House passed the conference report on April 9 by a 259-165 vote. The Senate followed suit on April 30 with a 58-42 vote. President Bush, citing his opposition to spending limits and public financing, vetoed the bill May 9. On May 13, a Senate override vote failed by 57-42, thus ending debate on the issue for the 102 nd Congress. At the start of the 103 rd Congress, Democratic leaders introduced bills identical to those in the 102 nd Congress: H.R. 3 (Gejdenson) and S. 3 (Boren). With a President of the same party in favor, 1993 reform prospects seemed improved. On March 18, 1993, the Senate Rules and Administration Committee reported S. 3 (largely the bill vetoed in 1992, including the House provisions). Prior to the Senate debate, President William J. Clinton made his own recommendations on May 7, 1993, which added such provisions to the vetoed 102 nd Congress bill as congressional broadcast vouchers and an increased tax check-off financed by an end to lobbying expense deductions. On May 21, Senate began debate on a leadership substitute to the committee version of S. 3 , focused solely on Senate elections and reflecting the Clinton proposal and a federal PAC ban. Debate lasted for three weeks, encompassing three cloture votes and 24 recorded amendment votes. The filibuster was not broken until agreement was reached between Democratic leaders and seven Republicans to add the Durenberger/Exon Amendment. This provision dropped the bill's broadcast vouchers, allowed subsidies only to offset independent spending and spending in excess of the limits by non-complying opponents, and repealed the exempt function income exclusion on principal campaign committees of candidates who exceeded spending limits (in effect, subjecting them to a 34% tax on income). Passage of this amendment cleared the way for a successful vote to invoke cloture and passage of S. 3 the next day on a 60-38 vote. (See Appendix A for details on this measure.) The House leadership bill, H.R. 3 , was reported from the House Administration Committee on November 10, 1993, as amended by the committee and focused only on House elections. The reported bill featured voluntary House spending limits and communication vouchers (based on matching donations); other than contingency funds to compensate for non-complying opponents and independent expenditures, no other benefits were offered. After defeating a rule to allow votes on more alternatives, the House, on November 22, 1993, passed H.R. 3 by 255-175. (See Appendix A for details on this measure.) House and Senate compromise efforts were impeded by differences on PAC limits and funding sources; both bills avoided establishing a funding mechanism for the public benefits, deferring implementation until revenue legislation could be enacted. Late in the second session, on September 29, 1994, Democratic leaders announced a deal, but Senate Republicans led a filibuster against appointing conferees, ending with a failed cloture vote (52-46) on September 30, 1994. The shift to Republican control of the House and Senate in 1995 effectively killed the momentum for public financing in Congress, given generally strong Republican opposition to both public financing and spending limits. Public finance bills continued to be introduced in every Congress, including in the 104 th when Senators John McCain and Russell Feingold introduced their first campaign finance reform bill, establishing themselves as the Senate's leading reform advocates. That bill ( S. 1219 ) was the successor to the bills passed in the previous three Congresses, and it reflected the same pre-1996 consensus among campaign finance reform advocates that prioritized curbing the high cost of congressional elections and replacing private funds with other funding sources. The election of 1996 proved to be a watershed in the campaign finance debate, as largely unregulated campaign activity (party soft money and election-related issue advocacy) seemed to overshadow the regulated activity. In response, the leading reform advocates in Congress made significant changes in their proposed legislation at the start of the 105 th Congress. S. 25 (McCain-Feingold), as well as its companion H.R. 493 (Shays-Meehan), added provisions to the comparable 104 th Congress bills to allow federal regulation of election-related activity then being conducted as "issue advocacy." Following the most intensive congressional activity on campaign finance reform since the 1970s, a revised S. 25 was offered in the fall of 1997, featuring provisions on party soft money and issue advocacy. What was striking was that the provisions on congressional spending limits and public benefits, and on PACs, the key elements of reformers' objectives for at least the previous 10 years, were eliminated from the bill entirely. Thus, in one year's time, the very nature of the campaign finance debate had shifted from efforts to improve the existing regulatory system to efforts to save it from becoming meaningless in the face of newly emerging campaign practices. This debate, in the wake of the 1996 elections, was to last until 2002, when BCRA, commonly known as McCain-Feingold, was enacted. Appendix B contains summaries of the four public finance bills introduced in the 109 th Congress. All were House bills, dealing only with House elections. Two of the bills— H.R. 2753 (Andrews) and H.R. 4694 (Obey)—would have provided public funding only in the general election. The Andrews bill would have provided up to $750,000 (based on media costs in the district) to candidates who met certain criteria, such as a $100 limit on individual donations and an 80% in-state funding requirement; but, unlike others introduced, the bill would have imposed no spending limit. The Obey bill would have established a mandatory spending limit, based on the median household income in the district, and would have provided public funds to equal those limits. The benefit would have been financed in part by a tax on corporate income. The bill provided for fast-track consideration of a constitutional amendment to allow mandatory spending limits if the limits in the bill were struck down. The other two bills— H.R. 3099 (Tierney) and H.R. 5281 (Leach)—would have offered benefits in both primary and general elections. The Leach bill would have provided funds to match contributions from in-state contributors and would have imposed a $500,000 per election spending limit. The Tierney bill was the Clean Money, Clean Elections measure, which would have provided public subsidies equal to the spending limit in the primary and general election, specified allotments of free broadcast time, and additional broadcast time at 50% of the lowest unit rate. Candidates would have qualified by raising specified numbers of small donations. (The clean money model is discussed in greater detail under the States' Experience section of this report.) Five congressional public financing bills were introduced in the 110 th Congress: H.R. 1614 (Tierney), H.R. 2817 (Obey), H.R. 7022 (Larson), S. 936 (Durbin), and S. 1285 (Durbin). Appendix C at the end of this report and the discussion below provide additional detail. All five bills proposed comprehensive public financing programs, but did so in different ways. H.R. 2817 (Obey) proposed perhaps the most direct change to the status quo because it would have essentially made public financing mandatory in general elections. By contrast, candidates operating under the other four bills could have chosen to participate in public financing—and would have had to meet specific criteria to do so. H.R. 1614 , H.R. 7022 , S. 936 , and S. 1285 explicitly proposed public financing for primary elections. Overall, while H.R. 2817 would replaced the private campaign financing system in general elections, H.R. 1614 , H.R. 7022 , S. 936 , and S. 1285 proposed a benefits package designed to allow publicly financed candidates to compete within the current system. The public financing program proposed in H.R. 2817 would only have covered general elections, but the bill also specifies spending limits for primary elections. H.R. 2817 would have banned independent expenditures in House elections. By contrast, H.R. 1614 , H.R. 7022 , S. 936 , and S. 1285 proposed "fair fight funds" to counter high-spending opponents and those airing independent expenditures against participating candidates or in favor of their opponents. Only S. 1285 received a hearing during the 110 th Congress. On June 20, 2007, the Senate Committee on Rules and Administration heard testimony on the bill from Senators, a former FEC chairman, and interest group representatives. At that hearing, Senators Durbin and Specter (and former senator Warren Rudman) testified in favor of the bill, saying that it was a "modest" step toward reducing the role of money in elections and a means to restoring public trust in government. In particular, Senator Durbin emphasized what he called an "unsustainable" current system of private fundraising that potentially separates lawmakers from average voters and distracts them from policymaking. Minority Leader McConnell testified against the bill, citing declining public participation in the presidential public financing system and philosophical opposition to public financing for politicians. Chairman Feinstein and Ranking Member Bennett both expressed concerns at the hearing about the possibility of "fringe" candidates receiving public funds. In a letter to committee members, the National Association of Broadcasters (NAB) expressed "great concern" about proposed LUC reductions for participating candidates and sections of S. 1285 that would bar broadcasters from preempting candidate advertising and fund public financing through spectrum usage fees. Five congressional public financing bills were introduced in the 111 th Congress. Additional summary material appears in Appendix D at the end of this report. The first bill introduced, H.R. 158 (Obey), would have, essentially, mandated public financing during House general elections by prohibiting candidate spending other than from a proposed public financing fund. In exchange, candidates would have received grants designed to cover full campaign costs. H.R. 158 was virtually identical to H.R. 2817 (discussed above), which Representative Obey introduced during the 110 th Congress. The second bill, H.R. 2056 (Tierney), like H.R. 158 , would have required participants to limit spending. H.R. 2056 was virtually identical to H.R. 1614 (Tierney), introduced in the 110 th Congress. The Tierney bills were traditional "clean elections" measures. They proposed full public financing for participating candidates, a "seed money" period in which candidates would demonstrate viability by raising small start-up contributions, and additional funds for participating candidates facing non-participating opponents or attacks by outside groups. Three other bills, H.R. 6116 (Larson), H.R. 1826 (Larson) and S. 752 (Durbin), proposed an alternative to the bills discussed above: voluntary public financing that would have provided a base subsidy and matching funds. These three bills were the focus of most attention thus far in the 111 th Congress. The Committee on House Administration held a hearing on H.R. 1826 during the first session of the 111 th Congress. In September 2010, the committee marked up a successor bill, H.R. 6116 , and ordered it reported favorably to the House. No additional legislative action occurred. Candidates would have received a variety of incentives to participate in public financing under H.R. 6116 , H.R. 1826 , and S. 752 . Under both House versions of FENA, publicly financed candidates would have received two major benefits to finance their campaigns: a base subsidy and a 400% match of small contributions of $100 or less. These bills were substantially similar to the versions of the Fair Elections Now Act introduced in the 112 th Congress. Additional discussion appears below. The two current versions of the Fair Elections Now Act, also known as FENA ( S. 750 and H.R. 1404 ), are similar to H.R. 6116 (which superseded H.R. 1826 ) and S. 752 from the 111 th Congress. Like their predecessors, the current versions of FENA propose to provide participating candidates with a mix of base subsidies, matching funds, and other incentives in exchange for limiting private fundraising to small contributions. The discussion below and bullet-point summary in Appendix E at the end of this report provide additional information. Neither S. 750 nor H.R. 1404 would require participating candidates to limit their spending—provided that the campaign spent no funds beyond the public financing allocation and small-dollar contributions (i.e., $100 or less). The legislation would, however, limit other forms of spending. In particular, party coordinated expenditures (except, in some cases, in the Senate bill), joint fundraising, and leadership political action committee (PAC) activities would all be limited or prohibited under the current FENA proposals. Publicly financed House candidates would receive two major benefits to finance their campaigns: a base subsidy of 80% of the national average of spending by winning House candidates during the previous two election cycles (approximately $1.1 million based on 2010 and 2008 data; and a 500% match of small contributions of $100 or less raised from individuals (capped at 300% of the base subsidy). Under S. 750 , Senate candidates would be eligible for a base subsidy of $750,000 plus $150,000 for each congressional district in the state; a 500% match of small contributions of $100 or less raised from individuals (capped at 300% of the base subsidy); and broadcast vouchers equal to $100,000 for each congressional district in the state. In addition, the Senate bill would not limit coordinated party expenditures made on behalf of publicly financed candidates—if the funds used for those expenditures came from individual contributions of no more than $500. As noted previously, the House and Senate versions of FENA are substantially similar. Notable differences between the bills are summarized below. H.R. 1404 would apply only to House campaigns. S. 750 would apply only to Senate campaigns. The base subsidies in the House and Senate bills would be allocated differently, as noted above. The House bill would base the allocation on the winning average spending by previous House candidates; the Senate bill would allocate the base subsidy by a formula that emphasizes more funding for candidates from states with multiple congressional districts. Broadcast provisions in the bills vary. Unlike the House bill, the Senate bill would provide broadcast-advertising vouchers of $100,000 for each congressional district in the state. The House bill contains no voucher provisions. The Senate bill would also extend the lowest unit charge (LUC, also called the lowest unit rate ) to national party committees. (The LUC guarantees candidates the ability to purchase broadcast advertising at the cheapest available rates.) Participating candidates would receive a 20% discount on the current LUC, and time purchased under LUC provisions could not be preempted. The House bill contains no LUC provision. Unlike the House bill, the Senate bill would permit unlimited coordinated party expenditures if those expenditures were funded by individual contributions of no more than $500. The two bills would be financed differently. H.R. 1404 would finance the proposed public financing program through appropriations, unused allocations from previous elections, and penalty amounts. S. 749 , a stand-alone measure, would fund the public financing program proposed in S. 750 through a 0.5% tax on government contracts of more than $10 million. The tax could not exceed $500,000 annually. The 112 th and 111 th Congress versions of FENA are substantially similar. Notably, however, there are a few major differences. They are summarized below. The matching rate proposed in the 111 th Congress was 400% instead of the current 500%. Matching-fund benefits in the 112 th Congress versions of the bill would be capped at 300% of the base subsidy, unlike the 111 th Congress cap of 200% of the base. For Senate campaigns, S. 750 would not limit coordinated party expenditures made on behalf of publicly financed candidates—if the funds used for those expenditures came from individual contributions of no more than $500. No such provision was included in the 111 th Congress versions of FENA. Broadcast provisions in the bills vary. In particular, previous proposals regarding spectrum auctions have been omitted for the 112 th Congress versions of the legislation. H.R. 1404 also omits lowest unit charge provisions found in previous versions of the legislation (although some of these provisions were also excluded from H.R. 6116 during the 111 th Congress). As noted previously, broadcast-voucher provisions have also changed. Based on the previous discussion of proposals that advanced in the legislative process, one can see the wide range of features that any public finance proposal might embody. This section discusses some of the basic options facing Congress in any consideration of such proposals. (Further potential considerations for congressional public financing are discussed in the conclusion of this report. These considerations are based in part on experiences in the states, which are discussed in the following section.) CRS takes no position on any of the options presented here. Establishing the limits on campaign expenditures is perhaps the thorniest aspect of devising a public financing system. It has become widely accepted in the political science community that, to the extent that high spending in elections reflects a desirable level of competitiveness, low spending limits can inhibit real competition. In other words, low spending limits may reduce the chances for lesser known candidates to defeat candidates with higher visibility and name recognition. It was this principle that has often led public finance and spending limit proposals to be labeled by critics as "incumbent protection" measures, because incumbents typically start elections with much higher visibility than their challengers. Spending limits for House campaigns have almost always been a specified across-the-board amount ($600,000 in the last bill to pass the House, in 1993), whereas the Senate limits have generally reflected a population-based formula. As late as 1997 when the initial McCain-Feingold bill was offered in the 105 th Congress, the formula in Senate elections was essentially the same one incorporated into S. 2 (the leadership substitute) in the 100 th Congress (in a general election—the lesser of: (a) $5.5 million, or (b) the greater of (i) $950,000, or (ii) $400,000, plus 30 cents times the voting age population (VAP), up to 4 million, and 25 cents times the VAP over 4 million; in a primary—67% of general election limit, up to $2.75 million; and for a runoff—20% of the general election limit). The challenge for policymakers is to choose a spending limit that takes into account the realities of today's campaigns, allowing sufficient opportunity for a genuine competition which serves the public's interest. One way to offset potential damage to the vibrancy of the electoral process resulting from too stringent limits would be to increase the generosity of public funds and benefits, to lessen the need for both raising and spending money. As noted above, some legislation proposed in the 111 th Congress would not impose spending limits on participating candidates. This change is reportedly due, at least in part, to concern about the viability of the spending limits and "rescue funds" following the Supreme Court's 2008 decision in Davis v. FEC . Davis did not consider public financing per se, but its content regarding additional fundraising for those facing high-spending opponents is potentially applicable to public financing questions. While the bills that advanced in the 1970s included public funds in the primaries, most measures in more recent Congresses have covered only general elections. This has been the case not so much because the sponsors have not favored such coverage but more because of strategic decisions about the reduced likelihood of enacting a more complicated and more expensive system. Some have stated that they would settle for public funding in general elections for now and hopefully later return to the primary issue after some experience with a general election system. To some, however, the lack of inclusion of primaries may represent a serious flaw in recent proposals, with the prospect of private money entering the electoral system earlier and expenditures aimed at influencing the general election made during primaries, all to evade the restrictions of the general election system. The bills debated in the 100 th —103 rd Congresses incorporated the concept of providing benefits only in the general election but conditioning those benefits on adherence to voluntary spending limits in the primary as well as the general election. Invariably, proposals condition receipt of benefits on adherence to voluntary spending limits, whether solely in the election where the benefits are offered or in the primary as well as the general election. Most also require candidates to limit spending from personal and immediate family funds to a specified amount (generally applicable to loans as well). Some bills have added a requirement that candidates participate in a specified number of debates, and bills that passed in the 1990s added the requirement that broadcast ads must include closed-captioning. There is considerable latitude in what conditions may be imposed on candidates participating in this voluntary system. In addition to requiring adherence to spending limits, proposals typically have some sort of qualifying requirement to prove a candidate is "serious" (i.e., that he or she has some degree of public support). Most often, the qualifying requirement is a fundraising threshold, comprising relatively small donations from a specified number of voters in that jurisdiction. Petition signatures is another option. This choice may be informed by the experience the nation has had under the presidential system for the past 30 years, in which matching funds are available in the primaries and fixed subsidies are offered to candidates in the general election. As is discussed in the next section, the states also use a mix of these two forms of subsidies. Fixed subsidies offer the advantage of simplicity and providing candidates greater ability to plan their campaigns, but, depending on the percentage of the spending limit the grant is intended to constitute, it can result in a much greater cost (in the presidential system, for example, major candidates in the general election get a subsidy equal to the spending limit). The matching fund approach would generally be less expensive and would offer the advantage of linking the receipt of public money with a demonstration of voter appeal by the candidate. Matching fund systems may offer the advantage of avoiding complex legislative or regulatory judgments about who is and is not a "serious" candidate, with the meeting of fundraising thresholds and the continuing raising of small donations considered an adequate means of so doing. If a matching fund system is preferred, there is also the consideration of whether funds should match contributions on an equal basis or a higher percentage (some bills have proposed a two- or three-to-one match, at least in some circumstances). Whereas the bills that advanced in Congress during the post-Watergate 1970s were based on either direct subsidies or matching funds, the most prominent measures of the late 1980s and early 1990s reflected a move away from direct public funding to candidates. Instead, those bills featured either more indirect forms of public funding or cost-reducing benefits that did not involve public funds at all. These indirect public funding and public benefits measures, often designed to increase chances for passage in the face of perceived public opposition to use of public funds in elections, offer additional ideas in structuring a spending limits and public benefits package. Several ideas have gained support in Congress at various times that make use of public funds in ways other than direct payments from the U.S. Treasury to the candidates, including the following: Tax credits for contributions to candidates abiding by limits—This could provide a grassroots fundraising incentive to candidates who agree to limit their expenditures. Most commonly, this takes the form of a 100% tax credit for contributions to participating candidates. Such a form of public funding is determined by citizens' decisions at the grassroots level, rather than decisions of a government agency, which supporters see as an important advantage. Presumably, the prospect of raising small donations much more easily would provide sufficient incentive for candidates to agree to limit spending. Most observers of the political system argue that the best kind of political money is that from individual citizens in small amounts. (It should be noted that from 1972-1986, the federal government allowed tax deductions or credits for political contributions, but they were eliminated as part of overall tax reform; also, many states have such incentives applicable to contributions in their elections.) Broadcast vouchers to candidates—The single largest component of the typical campaign budget (at least for statewide and national offices) and the biggest single factor in the rise of campaign costs in recent years has been broadcast advertising. Proposals have been advanced whereby candidates would be allocated specified amounts of broadcast vouchers, for which broadcasters would be reimbursed from the federal treasury. Under this plan, public monies do not get distributed directly to candidates, thus at least ostensibly avoiding some of the objections to public financing per se while focusing on what many consider the biggest single problem in campaign financing—the high cost of media. However, the mechanics of implementing such a plan, particularly in districts served by high density, high-cost media markets, pose potential concerns in terms of fairness and the particulars of individual campaigns. Lower postal rates for candidates abiding by limits—Another proposal which seeks to draw candidates into acceptance of campaign spending limits is one which offers participating candidates lower postal rates, such as those currently available to political party committees. This proposal involves public funds, but only indirectly, because the U.S. Postal Service would have to be reimbursed for revenue forgone as a result of its implementation. It is not clear to what extent a lower postal rate may serve as an inducement to candidates to limit spending, since postage is not a large component in a typical campaign budget, although it may well be more important in House than Senate races (especially in high-density media markets where media costs are seen as often prohibitively expensive). Lower postal rates do offer the advantage of acting to reduce campaign costs, generally seen as a worthwhile goal, regardless of one's position on spending limits or public financing. Proposals that passed in the 101 st —103 rd Congresses (and the Senate-passed version of the BCRA (McCain-Feingold) in the 107 th Congress) looked to broadcasters to offer some of the incentive toward candidate participation. Because of broadcasters' public interest obligations as part of their license agreements, sponsors sought to require broadcasters to offer lower rates to candidates participating in public funding, as a condition of their licenses and at no cost to the U.S. treasury. (On the basis of this principle, the federal government has since 1972 required broadcasters to charge political candidates at the lowest unit rate (LUR) available to commercial advertisers for the same time and class of advertising time.) Some proposals have gone beyond requiring still-lower rates to requiring broadcasters to provide specified amounts of free time to participating candidates. To the extent that these costs are removed from candidates, the overall cost of elections could be significantly curbed, which, as with lower postal rates, would appeal to many observers regardless of their views on spending limits and public financing. Yet such proposals invariably invite strong opposition from the broadcast industry. While the Senate version of BCRA in the 107 th Congress offered substantial reductions in broadcast rates to candidates, this provision was removed in the House on a floor amendment. One concept present in most bills offered since the 100 th Congress but absent from the presidential system is protection offered to candidates who participate in public financing but are faced with large expenditures by non-participating opponents or are targeted in independent expenditures from outside groups. Most commonly, provisions designed to remedy such situations would: increase spending limits on participants to match expenditures by opponents in excess of the spending limits and by independent expenditures in amounts above a specified level; and/or provide participants with additional public funds to match excessive spending from non-participating opponents or for opposing independent expenditures, perhaps with a cap on overall funds provided in this circumstance. Providing additional funds, or allowing for supplementary private funding, to participating candidates facing non-participating opponents offers protection against being greatly outspent and presumably would deter candidates considering forgoing public financing. A potential problem with these disincentives is the increased costs they would add to a public funding system, costs not easily predictable. What has not been reflected in recent proposals but may have to be addressed in future ones is the activity by outside groups (such as 527 political organizations) that spend money outside the purview of federal election law (i.e., soft money). While public finance bills have typically focused on offering benefits as an inducement toward agreeing to expenditure limits, more recent proposals have also looked to add disincentives as well, to impose some sort of penalty on candidates not participating in the system (beyond providing benefits to the participating opponent). These proposals appeal to those who would like to lessen the role of public funds but still wish to achieve meaningful levels of participation in the system. Critics see these proposals as heavy-handed measures designed to bludgeon candidates into participating, thus casting doubts on whether participation can fairly be deemed to be voluntary. Some of the disincentives advanced in recent years include the following: requiring a disclaimer on campaign advertisements of a candidate's non-participation—This provision, requiring non-participants to state in their ads that they do not abide by spending limits, was included in Senate bills passed in the 101 st -103 rd Congresses; disallowing lowest unit rate requirement for non-participants—This provision, included in the 101 st Congress Senate bill, as passed, would have removed the lowest unit rate requirement for candidates not participating in the system; and tax campaigns of non-participating candidates—Political campaigns are generally exempt from paying taxes on money raised. The Senate bill passed in the 103 rd Congress removed the exempt function income exclusion on principal campaign committees of candidates who exceeded spending limits, thus in effect subjecting those campaigns to a 34% tax. One idea closely related to the proposals in the prior two sections is to provide public funds only as a last resort, when a participant is faced by an opponent who exceeded spending limits or by opposing independent expenditures. As is explained in the "State Experiences" section that follows, some states feature such a provision, aimed at curbing arguably excessive campaign spending without incurring the expense to the taxpayers that most public finance systems would incur. It would be applied on a very selective basis and would presumably act as a strong inhibitor against only the most excessive campaign spending. The Senate bill passed in the 103 rd Congress contained this feature, in addition to the direct incentives of lower postal and broadcast rates. Clearly, the decisions made about the aforementioned variables will determine the cost of any public finance system. Estimates of costs of public finance systems vary considerably, according to the details of the systems envisioned. For bills considered in the 101 st —103 rd Congresses, one can look to the required Congressional Budget Office (CBO) cost estimates, bearing in mind that the bills passed were often changed substantially from those reported and for which estimates were provided. At the start of the 103 rd Congress, the Senate Rules and Administration Committee reported S. 3 , which was essentially the bill vetoed during the 102 nd Congress and thus contained provisions affecting both House and Senate elections. Benefits for House elections consisted of matching funds (accounting for up to one-third of the spending limit) and reduced mailing rates; Senate election benefits consisted of voter communication vouchers (of up to 20% of the general election limit), reduced mailing rates, and contingent public grants to compensate candidates opposed by free-spending opponents and by independent expenditures. CBO estimated that this rather modest system (in terms of level of public funds) would range in cost from $90 million to $175 million in the 1996 election cycle and from $95 million to $190 million in the 1998 election cycle. At the other extreme, the most generous proposal currently being advanced at both federal and state levels is the "Clean Money, Clean Elections" measure, advocated by interest group Public Campaign. H.R. 1614 (Tierney, 110 th Congress), S. 936 (Durbin, 110 th Congress), S. 1285 (Durbin 110 th Congress), H.R. 3099 (Tierney, 109 th Congress), and S. 719 (Wellstone, 107 th Congress) are variations on the clean elections model and would (or would have) provide public funds in the primary and general elections; such funds are intended to lower all candidate spending in those elections. Public Campaign's website states, The cost of implementing such a system for Congressional elections is estimated to be less than a billion dollars per year out of a federal budget of close to two trillion dollars (that's about a half of a 10 th of a percent of the federal budget: 0.05%). That amounts to less than $10 per-taxpayer, per-year. Thus, by Public Campaign's estimates, congressional elections would cost somewhat less than $2 billion every election cycle. Most proposals since the mid-1970s have relied upon a tax check-off, based on the presidential model, whereby taxpayers could designate a certain number of tax dollars to go into the fund to pay for congressional elections. This idea is intended to mitigate negative images that might arise from "taxpayer funding" of elections, because of the direct role provided citizens in the distribution of tax revenues. Because of those perceptions, however, the 101 st —103 rd Congresses sought creative ways to offset any losses to the U.S. Treasury, or remained silent on funding sources, leaving those decisions to subsequent "enacting legislation." Proposals since that time have looked to such things as broadcast licensing fees, a tax on lobbyists, and a tax on corporate income to offset treasury losses. State public financing programs emerged primarily in the 1970s, although a few states provided limited assistance to campaigns early in the 20 th century. Prior to the 1970s, many programs that did exist provided funding to political parties rather than directly to candidate campaigns. (As noted previously, political parties were historically the major funders of congressional campaigns, especially before the 1960s.) States vary considerably in whether they offer public financing, how they do so, and why. Sixteen states offer some form of direct public financing to candidates' campaigns (see Figure 1 ). Of those, seven states fund only statewide races (Florida, Maryland, Michigan, New Mexico, North Carolina, Rhode Island, and Vermont). Nine states fund legislative and statewide races (Arizona, Connecticut, Hawaii, Maine, Massachusetts, Minnesota, Nebraska, New Jersey, and Wisconsin; see Figure 2 ), although which statewide campaigns are eligible for funding varies. Some state public financing programs have been, or are, subject to litigation—a topic that is beyond the scope of this report. States have chosen two major public-financing frameworks. First, the "clean money, clean elections" model (hereafter, clean money) is a national initiative developed by an interest group and is designed to cover full campaign costs. Clean money programs generally offer fixed subsidies to candidates once they meet basic qualifying requirements. All qualifying candidates receive the same amount of funding, which is, at least in theory, sufficient to cover all campaign costs. Clean money programs also typically make additional funding available on a contingency basis to counter spending by non-participating opponents. All clean money programs are similar, with adaptations in each state (e.g., which offices are covered). Second, and in contrast to the clean money model, other state public financing mechanisms vary considerably. These programs are typically older, and developed more individually. Through matching funds and other benefits, these programs are designed to reduce the need for and impact from private fundraising, but are less likely than clean money programs to offer full public financing to participating candidates. States fund both approaches through a combination of tax check-offs, direct appropriations from state legislatures, revenues from various fines and fees, and other sources. Additional details are discussed below. As Table 1 and Figure 2 show, seven states offer some form of the clean money model of public financing. The clean money model offers full public financing to candidates who agree to certain restrictions, particularly spending limits. Candidates who agree to those restrictions, which vary by state, receive public funds via fixed subsidies. Specific amounts are determined by each state. The plan originated with the interest group Public Campaign, which describes itself as "a non-profit, non-partisan organization dedicated to sweeping reform that aims to dramatically reduce the role of big special interest money in American politics." The group advocates the clean money program at the local, state, and federal levels around the country. Currently, clean money programs in Arizona, Connecticut, Maine, New Jersey (a pilot legislative program), New Mexico, North Carolina, and Vermont offer public financing to the candidates for the offices noted in Table 1 . Although all clean money programs are adapted to states' individual needs (e.g., different offices are covered in each state), the major components of the program are similar nationwide. All programs were approved by voters or state legislatures between 1997 and 2005 (some have since been amended). By contrast, 10 states offer public financing through programs other than the clean money model: Hawaii, Florida, Nebraska, Maryland, Massachusetts, Michigan, Minnesota, New Jersey (gubernatorial campaigns), Rhode Island, and Wisconsin. While the clean money system features a uniform model for public financing and is a relatively recent initiative, other public financing programs in the states vary widely. Many of the latter programs were initiated in the 1970s, in the Watergate aftermath. Some of the most notable differences between clean money models and other programs are how candidates receive public funding and how much money is available to those candidates. Although clean money funds are generally distributed through subsidies that allocate fixed amounts to candidates, states that employ other programs rely primarily on matching funds. The amount of matching funds candidates receive depends on the amount of private contributions raised. States generally match 100%, and sometimes more, of the amount a candidate raises through private contributions. Whether clean money models or other systems, public financing programs do not guarantee unlimited funds. States generally limit the percentage of contributions that may be matched, or cap the total amount of funds that may be disbursed. Available revenues often influence these decisions. For example, in Michigan, a tax check-off system funds public financing for qualifying gubernatorial candidates. Just as in the presidential public-financing system, general-election funding in Michigan takes priority. Funding is first reserved for general-election subsidies. If additional funds are available, primary candidates may qualify for matching funds, which are distributed on a pro-rated basis. Proponents of public financing generally argue that unlimited private funding encourages corruption, or at least forces candidates to spend too much time raising money. Therefore, states often require that recipients of public funding observe certain conditions on campaign conduct, which are designed to increase public confidence in campaigns and limit or eliminate large amounts of time spent raising private funds. Publicly financed candidates must agree to limits on spending and fundraising. Some states also require publicly financed candidates to participate in debates. Public funding recipients must demonstrate that they are politically viable by raising a minimum level of private contributions before becoming eligible for public funding. Some states' individual contributions are limited to as little as $5. Once candidates meet that threshold and other qualifying requirements, they become eligible for public financing. In most cases, campaigns qualifying for public financing may spend their privately raised contributions directly. In others, privately raised "seed money" is transferred to a central state fund for redistribution among all publicly financed candidates. How widely candidates take advantage of public financing depends largely on whether opponents choose to participate in public financing, how various states structure their public financing programs, or both. Public financing programs often become dormant because potential participants believe that spending limits are too low. In Maryland, for example, although public financing is available for gubernatorial tickets, no major candidate has accepted that funding since 1994. Since that time, major candidates have reportedly viewed the 30-cent-per-voter spending limit as too low to enable effective campaigning. Low participation by candidates in public financing does not necessarily mean that the program fails to influence campaigns. At least one state's program appears to have the most impact when public financing is not utilized at all. Nebraska's public financing program has offered matching funds to a variety of statewide and legislative candidates since 1992, although it is rarely accepted. According to Frank Daley, Executive Director of the state's Accountability and Disclosure Commission, public financing in Nebraska becomes available only if one candidate adheres to spending limits while the other does not. If both candidates exceed spending limits, or if neither candidate exceeds spending limits, neither is eligible for public financing. Essentially, public financing in the state offers "extra" money for those facing high-spending opponents. Given the threat of opponents receiving public funds, most candidates have chosen to limit spending voluntarily. As a result, public financing's greatest impact in Nebraska appears to be keeping private spending down, rather than infusing greater amounts of public money into elections. Despite recent scholarly research, there is little certainty about how changes in American campaign finance law affect electoral outcomes. Research on the impact of public financing is particularly limited, dated, or both. Public financing programs in the states vary widely and were implemented at different times. Even basic terminology can vary across states. All these factors limit opportunities for comparing data. In answering whether public financing has achieved the various goals proponents ascribe, one group of scholars wrote in 2006: The short answer is that nobody knows because there has been no comprehensive evaluation of public finance systems to identify what conditions and program elements lead to successful outcomes. The conventional wisdom is based on either a limited amount of data or anecdotal impression. Similarly, much of what is known about public financing is based on relatively narrow evaluations of particular states or races. Finally, it is important to note that this report does not examine recent constitutional and other legal challenges to some states' public financing programs. As developments in this area become clearer over time, this report will be updated. One of the major questions surrounding public financing is whether publicly funded campaigns are more or less competitive than those that are privately financed. Research often considers at least two different measures of "competition" surrounding public financing: (1) the amount of money at each campaign's disposal; and (2) the margin of victory on election day. In theory, public financing should foster lower-cost campaigns because public financing generally requires observing spending limits and reduces fundraising costs. If more candidates have access to funding through public financing, races might also be closer on election day. Evidence on both fronts is mixed. In general, research suggests that public financing can foster more competitive elections. However, research on competition and public financing commonly emphasizes that most public financing programs are in their infancy, and that more time and cases are needed to draw definitive conclusions. Public financing does appear to reduce financial disparities among candidates, provided that all candidates participate in public financing. For example, research on state legislative elections has found that public financing in Minnesota and Wisconsin decreased financial disparities between challengers and incumbents. More access to money via public funding does not always foster closer races, although it can provide ballot access for candidates who might not otherwise be able to run. From this perspective, public financing provides an avenue to consistent competition in elections, but not necessarily closer elections. On the other hand, in a comparative analysis of legislative elections in five states that offer public financing—Arizona, Hawaii, Maine, Minnesota, and Wisconsin—political scientists Kenneth R. Mayer, Timothy Werner, and Amanda Williams found that competition generally increased after public financing was enacted, both in terms of the number of incumbents facing challengers, and the number of "competitive" races. These findings, however, were contingent upon sufficient funding to make the programs attractive to candidates. There is some anecdotal evidence of public financing favoring challengers or Democrats, although these findings are not systematic, and other research disputes such findings. Finally, preliminary evidence from Arizona and Maine suggests that female candidates are more likely to accept public funds in state house races, but availability of those funds has not made women more likely to seek office. Regardless of candidates eligible for funding or the particulars of individual campaigns, public financing becomes less popular, and therefore has less impact, if not all major candidates have incentives to participate. Recent experience with Wisconsin's program, for example, suggests that publicly financed elections in that state have not become more competitive. Some observers suggest that Wisconsin's program provides too little funding to be a major component of candidate's overall expenditures. Hawaii has reportedly experienced similar problems. Some who support public financing suggest that it can lead to more substantive campaigns by freeing candidates from the burdens of raising large private contributions, providing more time to connect with voters and discuss policy issues. Research indicates that public financing does decrease the amount of time state legislative candidates spend raising money, but the finding holds only for full public financing. A national survey of candidates who ran for state legislatures in 2000 revealed that "[f]ull public funding can free candidates from spending large amounts of time 'dialing for dollars' or making personal appeals to prospective donors. By comparison, candidates who accepted partial public funds devoted about the same time to fundraising as did candidates in states that did not provide public funding." If this finding holds in other kinds of races, it suggests that partial public financing might do little to alleviate what has been called "the money chase" of continual fundraising. By contrast, existing models of full public financing can reduce candidates' fundraising duties for individual campaigns. Nonetheless, despite the assertion that full public funding "can free candidates to spend less time with wealthy donors raising money and more time on other aspects of campaigning," it is unclear whether public financing makes campaigns more "substantive," or how such concepts would be measured. In addition, public financing would not necessarily free candidates from fundraising for leadership PACs or other entities that may serve to benefit their elections indirectly. Those favoring public financing suggest that it democratizes campaigns by providing more "average" people with the resources to run, and enhances the role of small donations from ordinary citizens. There is some evidence that public financing allows candidates who would not otherwise do so, including minorities and women, to run for office. Clean Money programs requiring candidates to collect small private contributions (e.g., $5 in Maine) also potentially expand the donor universe by creating an important financial role for ordinary citizens who might be unable to make large private contributions. Much of the recent attention to public financing has occurred because of notable ballot initiatives in two states. In 1996 and 1998, respectively, Maine and Arizona became the first states to provide full public financing for qualified candidates for statewide and legislative offices. These two states are often considered test cases for public financing because their programs are so comprehensive. In both states, the first disbursements under these programs were made in the 2000 election cycle. Both states adopted public financing modeled on the clean money program, advocated by Public Campaign. Arizona and Maine offer similar full public financing to statewide and legislative candidates. Connecticut's public financing program, which is similar to the Arizona and Maine programs, was fully implemented for the 2008 election cycle. Although the program appears to have been popular with candidates, it is too early to fully assess the impact of public financing in that state. Various accounts about the Arizona and Maine programs are available, although research (especially from secondary sources) tends to be limited or is produced by groups that support or oppose public financing. The Government Accountability Office (GAO, then the General Accounting Office) issued one of the first governmental assessments of the Arizona and Maine programs. The GAO report, issued in May 2003 and based on public financing offered in the 2000 and 2002 election cycles, found "inconclusive" and "mixed" results. According to GAO, "In sum, with only two elections from which to observe legislative races and only one election from which to observe most statewide races, it is too early to draw causal linkages to changes, if any, that resulted from the public financing programs in the two states." GAO also found "inconclusive" and "mixed" results when examining whether the states met program goals in five areas: (1) voter choice (measured in candidate emergence and participation in public financing); (2) electoral competition (measured in percentage of competitive elections, decreases in incumbent reelection rates, or smaller victory margins for reelected incumbents); (3) interest group influence (measured by candidate and interest group reports through interviews and surveys); (4) campaign spending (measured in candidate spending and independent expenditures); and (5) voter participation (measured in turnout and awareness in surveys of public financing). GAO revisited the topic in a 2010 report. In brief, the new GAO report found that participation greatly increased over time, as noted elsewhere in this report. As with the 2003 report, however, many of the 2010 findings could not necessarily be attributed to public financing in Arizona and Maine. In general, the 2010 report suggests that findings continue to be inconclusive, not clearly attributable to public financing, or both. Other recent research generally suggests that public financing has enhanced competition and diversity among candidates and donors in Arizona and Maine. One group of scholars found that the number of contested races in Arizona legislative elections increased by more than 10% from 2002 to 2004. A 2008 report issued by the advocacy group Public Campaign found that small donors to publicly financed candidates in Arizona were more racially, economically, and geographically diverse than traditional donors to privately financed candidates. After reviewing Maine's public financing program between 2000 and 2006 the state's Ethics Commission determined that public financing had tightened competition between incumbents and challengers, and between winning and losing candidates. The Ethics Commission report also found (among other points) that public financing had: "sharply reduc[ed]" total private contributions to legislative candidates, increased the amount of time candidates had to spend communicating with voters, and encouraged more first-time candidates (including more women) to run for office. A 2009 report released by the Brennan Center for Justice at New York University, which advocates public financing, also found evidence of increased competition in states with public financing. In the Maine case, the Brennan Center study found that accepting public financing slightly increased vote share among challengers (3 percentage points) and incumbents (2 percentage points). Some observers, however, have questioned the Arizona and Maine programs on ideological or legal grounds. Fundamental to those arguments is that citizens could be indirectly forced to provide financial support to politicians with whom they disagree, since Arizona's program is financed through various fines and fees. Some critics of Arizona's program also contend that increased competition in the state's elections could be due to other factors, such as the impact of term limits. In addition, Maine's program is, according to one report favoring public financing, "plagued by private contributions to candidate leadership PACs." Political scientists Ray La Raja and Matthew Saradjian have raised the possibility that public financing could increase independent expenditures by interest groups and other organizations. An increase in independent expenditures is one of the drawbacks to public financing identified in the 2007 Ethics Commission review of Maine's public financing program. Despite contradictory data on effectiveness, candidate participation in both states' public financing programs has steadily increased over time. As Table 2 and Table 3 below show, about one-quarter of legislative candidates participated in Arizona's inaugural public financing effort in 2000, compared with about one-third of legislative candidates in Maine. By 2002, however, participation in both states reached at least 50%, and has increased during subsequent election cycles. By 2008, large majorities of legislative candidates in each state chose to participate in public financing. Data on differences between Democrats and Republicans (or members of third parties or independents) are not uniformly available. The same is true for House versus Senate candidates. A review of data that are available, however, suggests that House and Senate candidates have embraced public financing in roughly equal numbers. More Democrats than Republicans typically participate in public financing, but majorities of candidates from both parties have done so in states with comprehensive programs. In Maine in 2008, for example, 94% of Democratic House candidates received public funds, compared with 70% of their Republican counterparts. In the Senate, 81% of Democratic candidates accepted public funds in 2008, compared with 75% of Republicans. Connecticut's program for legislative public financing was fully implemented for the 2008 election cycle. The Connecticut program appears not to have been fully evaluated thus far. Although it is too early to tell how consistent participation in Connecticut's program will be, approximately 75% of all candidates reportedly participated in public funding during the 2008 election cycle. Surveys indicate that Americans generally support campaign finance "reform" (generally meaning more regulation of money in politics) and are concerned about the amount of money in campaigns. Nonetheless, public opinion about campaign finance can be contradictory. These patterns are evident in the relatively limited available data about attitudes on public financing. Historically, surveys reveal that large pluralities or even majorities of Americans support public financing in principle, but are hesitant to invest tax dollars to facilitate public financing. These findings indicate that the wording, source, and timing of individual questions vary greatly and can affect campaign finance polling results, as is always the case with survey research, regardless of topic. Majorities tend to support public financing when asked questions suggesting favorable information about public financing, or in surveys conducted for pro-reform clients. On the other hand, majorities tend to respond negatively to questions focusing on costs of public financing or taxation. Survey respondents say that they are neutral or positive toward public financing if question wording suggests that public financing can limit the influence of "special interests" or campaign costs. On the other hand, survey questions that emphasize spending "taxpayer dollars" to support public financing often yield disapproval from respondents. Americans have been more willing in polls to support public financing after perceived scandals, such as during the 1970s and 1990s. In Gallup polling conducted between 1972 and 1996, between 50% and 65% of respondents favored "provid[ing] a fixed amount of money" for presidential and congressional campaigns, while banning private contributions. Similarly, in a 1997 Washington Post poll, 49% of campaign contributors answered favorably when asked if they would "favor or oppose having all federal elections financed out of public funds, with strict limits on how much each candidate for president, US Senator or Congressman could spend"; 48% were opposed. In the same poll, but with spending limits omitted from question wording, only 26% responded favorably when asked whether they would "favor or oppose the federal government financing presidential and congressional elections out of tax money." The polling data reviewed above illustrate that Americans have more consistently supported containing campaign spending—a hallmark of public financing programs—than public funding per se. For example, in a 1997 New York Times /CBS News poll, 60% of respondents said that "limit[ing] the amount of money that campaigns can spend" should be a "top" or "high" priority within campaign finance reform efforts. In a Gallup poll from the same year, 79% of respondents favored "putting a limit on the amount of money" congressional candidates could "raise and spend on their political campaigns." However, like all survey questions, answers to spending questions are also affected by wording. For example, in a 1999 NBC News poll, only 17% of respondents (but the second-most-common answer) presented with a list of potential campaign finance concerns said that "unlimited contributions" concerned them most, compared with 37% who were most concerned about "special interests." More generally, in a 2002 ABC News/ Washington Post poll, 66% of respondents favored "stricter laws controlling the way political campaigns raise and spend money." It appears that regular, national polling about public financing has been uncommon since the mid-1990s. Public financing has been debated in Congress and the states for decades. This suggests that interest in the topic will continue. As Congress considers how, or whether, to change the status quo, state experiences with public financing, as well as the nation's presidential public financing system, offer several potential lessons. However, the great diversity among state programs makes interpreting those lessons challenging. At the federal level, the presidential public financing system provides partial matching funds to qualifying candidates in primaries, but far more substantial fixed subsidies to candidates in the general election. At the state level, which campaigns are eligible for public funding, how much funding is available, what requirements are placed on candidates accepting public funding, and when programs were implemented vary. The presidential public financing system and those in the states all rely on either fixed subsidies (in the states, especially clean money models) or matching funds to distribute public financing. Despite similar ways of delivering funds to candidates, details about each program can vary greatly. These differences have produced research that describes individual components of public financing programs, but rarely draws systematic comparisons across states. In addition, only two states—Arizona and Maine—currently provide full public financing for legislative elections. (Others provide partial public financing for legislative elections, but, again, vary widely.) Consequently, there are few certainties about how public financing might apply to congressional campaigns. Nonetheless, several potential considerations remain. State models suggest two approaches to national public financing if Congress decides to pursue subsidized congressional campaigns. First, most public financing programs infuse public money into campaigns in hopes of limiting the impact of private money. This approach essentially provides candidates with money so that they do not have to raise their own—or can at least raise less. Second, some models, such as Nebraska's public funding program, have reportedly encouraged the vast majority of candidates to limit spending on their own. Rather than providing public funding to candidates based on the assumption that they will spend those funds, the Nebraska program reserves public financing for candidates whose opponents refuse to abide by relatively low spending limits. These two approaches suggest a choice for Congress between public funding that concentrates primarily on distributing money in anticipation of campaign needs versus creating incentives for candidates to need less money by observing spending limits. In addition, creating a public financing system requires a choice between funding primary elections or general elections, or both. Most existing state programs have funded both types of elections, although general elections sometimes take priority over primary elections and might be funded differently from primary elections. While early congressional proposals generally covered primaries as well as general elections, most prominent proposals since the 100 th Congress have dealt only with general election financing to reduce both costs and program complexity, and to enhance chances for enactment. Regardless of the chosen approach, public financing does not altogether eliminate private money in politics. Even clean money programs require some private fundraising to establish viability, albeit far less than under private financing. In addition, some observers fear that public financing creates opportunities for more financial influence from less accountable non-candidate sources—such as independent expenditures and election-related "issue advocacy" by interest groups—compared with the current system of private financing. Public financing systems generally do not regulate fundraising or spending outside candidate campaigns, although legislation could address such issues. Congress might also wish to consider why some public financing programs have been curtailed. In a few states, decisions by voters and candidates—not state governments—appear to be most responsible for public financing programs falling into disfavor. Experiences in the states suggest that in order to be viable, public financing must have sufficient funding to make participation attractive to candidates. As with public funds for presidential candidates, if public financing provides too little money—or sets accompanying spending limits too low—to convince candidates that they can wage effective campaigns, major candidates are likely to opt out of the system, ultimately making it relevant only for minor candidates. (In 2004, for example, both of the eventual major-party nominees for President opted out of matching funds in the primaries.) Public support can also be important to enact and maintain public financing. Despite regular congressional interest in public financing since at least the 1950s, disagreements over many of the issues noted in this report have thus far thwarted efforts to adopt public financing in legislative elections. On a related note, effective public financing requires resources not only adequate to make participation attractive to candidates, but also sufficient to administer and enforce public financing. As law professor Richard Briffault has explained, Public [campaign] funding requires administrators to determine who qualifies for public funds, to disburse the funds, and to enforce whatever restrictions accompany the funds. Can public administrators handle the job? In fact, administrators have successfully handled the qualification of candidates and disbursement of public funds in presidential elections. The real question is whether they can enforce the rules—particularly the spending limits—that are likely to accompany public funding. Comprehensive congressional public financing would, therefore, almost certainly require substantial administrative and enforcement resources for the Federal Election Commission. Finally, public financing regulates only one area of campaign conduct. If Congress were to adopt public financing for its elections, other regulations—including those currently in place—would still be required to shape other areas of campaign politics, such as political advertising and party activities. Public financing would also not necessarily affect other factors that shape individual races. As one pair of scholars wrote in 1995, public financing of congressional elections, by itself, will not eliminate the problem of uncompetitive elections. As in Wisconsin, public subsidies may increase or prevent further deterioration in the competitiveness of contested congressional races by giving challengers more of a level playing field. They might not, however, encourage challengers to emerge in districts where the incumbent is perceived as unbeatable. Public financing could have diverse impacts on congressional elections. Data from the states show some evidence that public financing decreases financial disparities between candidates and fosters closer margins of victory. However, these findings are generally preliminary and are based on specific conditions in specific states. Because public financing limits the amount of private financing of campaigns, it is likely that public financing in congressional elections would reduce the amount of time candidates spend raising money—at least for their own or others' candidate campaigns. On its own, however, public financing of candidate campaigns would not affect activities by 527s, political parties, or other organizations. The same is true for leadership PACs, unless they were prohibited by public financing legislation. Evidence from the states also suggests that if Congress chooses to fund congressional elections publicly, faith in the system and patience will be required. As is discussed throughout this report, much about the impact of public financing is simply unknown. Relatively few states offer public financing for legislative elections. Individual components of those programs, such as funding levels, conditions on candidates, and other factors, can vary substantially, making it difficult to compare public financing across states or to draw firm inferences about how state lessons might translate to congressional elections. It is clear from the presidential public financing program, and state programs, that assessing the impact of public financing takes multiple election cycles. As more states experiment with legislative public financing, and do so for longer periods of time, potential lessons for adopting congressional public financing will become clearer. It is also clear that in order to be effective, public financing programs require levels of funding sufficient to make them attractive to serious candidates, and to maintain those levels of funding over time. Similarly, spending limits associated with public financing must be high enough to convince candidates that they can compete in modern campaigns, including in expensive broadcast media markets. Appendix A. Public Finance Bills Passed by the House or Senate: 1973 -1993 Appendix B. Public Finance Bills in the 109 th Congress: Summary of Key Provisions H.R. 2753 (Andrews)—Public Campaign Financing Act of 2005 (Introduced June 7, 2005; referred to Committee on House Administration) Public finance provisions: Would have provided public funding in House general elections in amounts based on media costs in the area, up to $750,000 (with indexing for future inflation), for specified campaign purposes (but not a salary for candidate), within four months of general election, for candidates who: (a) gather petitions signed by at least 3% of registered voters or whose party received at least 25% of the vote in prior general election; (b) limit individual donations to $100; (c) raise at least 80% of funds in-state; and (d) participate in at least two debates; would have required broadcasters to accept participating candidate ads, until they constituted 40% of station's total advertising time. Other provisions: Would have required FEC to allow state parties to file copies of reports filed under state law if they contain substantially the same information as required under federal law; Would have required prompt disclosure by non-party entities for spending on "federal election activities" (as defined by BCRA), once $2,000 threshold level is reached; Would have required candidate reports to be broken down by primary, general, or runoff election; Would have prohibited bundling by PACs, parties, lobbyists, unions, corporations, or national banks, or employees or agents acting on their behalf. H.R. 3099 (Tierney)—Clean Money, Clean Elections Act (Introduced June 28, 2005; jointly referred to Committees on House Administration, Energy and Commerce, and Government Reform) Public finance provisions: Would have applied to House candidates voluntarily participating in public financing; Would have provided full public subsidies, 30 minutes of free broadcast time in primary and 75 minutes in general election, and additional broadcast time at 50% of lowest unit rate for House candidates who participate in "clean money" system and spend no private funds beyond subsidy once qualified; Would have allowed candidates, prior to qualification, to raise seed money ($35,000, in contributions of $100 or less) for specified uses by raising $5 donations from 1,500 state residents; others would have qualified by raising 150% of amount raised by major party candidates; Subsidy would have equaled applicable percentage (60% for general election, 40% for major party candidate in primary, and 25% for other primary candidates) of 80% of base amount per election (base amount would have been national average of winning House candidate expenditures in three most recent general elections), but amount was never to be less than amount provided in previous election cycle; Would have reduced subsidy to 40% of amount otherwise determined for unopposed candidates; Additional subsidies would have been provided to candidates targeted in opposing independent expenditures and by non-complying opponents once such spending exceeded 125% of spending limit (maximum additional funds equals 200% of limit); Would have denied lowest unit rate to non-participating House candidates; Would have financed benefits from House of Representatives Election Fund using appropriated funds, qualifying contributions, and unused seed money. Other provisions: In House races with at least one "clean money" candidate, would have limited party spending on behalf of a candidate to 10% of general election candidate's subsidy; Regarding "clean money" candidates: would have required 48-hour notice of independent expenditures above $1,000 up to 20 days before election and 24-hour notice of amounts above $500 in last 20 days; Would have amended "contribution" to include anything of value for purpose of influencing a federal election and that was coordinated with candidate; Would have defined "payment made in coordination with a candidate" to include payments (1) in cooperation or consultation with, or at request or suggestion of, a candidate or agent; (2) using candidate-prepared materials; (3) based on information about campaign plans provided by candidate's campaign for purpose of expenditure; (4) by a spender who during that election cycle had acted in an official position for a candidate, in an executive, policymaking, or advisory capacity; and (5) by a spender who had used the same consultants as an affected candidate during election cycle; would have deemed payments made in coordination with a candidate as a "contribution" or "expenditure" (but exempted a payment by a party in coordination with a "clean money" candidate); Would have added one FEC commissioner, recommended by other members; Would have allowed random audits of campaigns; Would have given FEC authority to seek injunctions; Would have changed standard to begin enforcement proceedings to "reason to investigate"; Would have allowed FEC to petition Supreme Court; Would have expedited enforcement in last 60 days of election, with clear and convincing evidence that violation had occurred, was occurring, or was about to occur; Would have allowed subpoenas without chair's signature; Would have required electronic filing of disclosure reports; Would have required 24-hour notice of all contributions received in last 90 days of election; Would have prohibited preemption of House campaign broadcast ads, unless beyond broadcasters' control; Would have prohibited franked mass mailings from start of primary election period through general election, unless Member was not a candidate or mailing promotes public forum with candidate name only; Included statement of findings and declarations; If any provision of act or this statute were held unconstitutional, the remainder of act and statute would have been unaffected. H.R. 4694 (Obey)—Let the Public Decide Campaign Finance Reform Act (Introduced February 1, 2006; jointly referred to Committees on House Administration, Ways and Means, and Rules) Public finance provisions: Would have set mandatory limits on House general election spending based on median household income per district, with maximum of $1.5 million for all major party candidates in highest level district; Other districts' limits would have been determined by subtracting from $1.5 million: two-thirds of percentage difference between the median household income in the district involved and the highest-median-household-income district, multiplied by $1.5 million; Maximum expenditure by a major party candidate would have been in the same ratio to the district-wide limit as the votes for that candidate's party in the last two House general elections in the district were to the votes for all major party candidates in those two elections; For purposes of establishing major party limit, only elections in which there were at least two major party candidates were to have been counted, and, if no such elections occurred, votes for Senate elections during the same period were to be used as the basis; Maximum expenditure for minor party or independent candidates would have been based on comparable ratios concerning that party's (or all independent candidates') votes in House general elections in the district, all federal offices in the state, or for presidential elections in the state (whichever amount was highest); Would have established mechanism for candidates to increase their spending limits based on submission of petition signatures (not applicable to candidate with highest limit in the race); Payments were to have been made to candidates for election expenses in amounts equal to the expenditure limits calculated above from a Grassroots Good Citizenship Fund, established within the Treasury; Fund would have been financed by voluntary taxpayer designations of any refunds owed them of at least $1, plus any additional contributions they wished to make, and by a tax on corporations of 0.1% on taxable income above $10 million; Would have directed FEC to make extensive public service announcements from January 15 to April 15 to promote the fund; Would have allowed only one other source for campaign expenditures—contributions from national and state political parties, of up to 5% of the applicable spending limit; Would have limited spending in non-general House elections (e.g., primaries) to one-third of the general-election spending limit; If any part of the act or these amendments were held unconstitutional by the Supreme Court of the United States, would have provided for expedited (fast-track) consideration by Congress of a constitutional amendment to allow reasonable restrictions on contributions, expenditures, and disbursements in federal campaigns; any legislation enacted to enforce such an amendment would have expired four presidential elections after enactment, unless extended by Congress; Unless otherwise specified, legislation would have taken effect in 2007 and expired in 2020. Other provisions: Would have banned independent expenditures in connection with House elections (but would have provided for fast-track consideration of a constitutional amendment to allow reasonable limits if the ban were held unconstitutional); Would have banned soft money spending in connection with House elections (but would have provided for fast-track consideration of a constitutional amendment to allow reasonable limits if the ban were held unconstitutional). H.R. 5281 (Leach)—Campaign Reform Act of 2004 (Introduced May 3, 2006; referred to Committee on House Administration) Public finance provisions: Would have created House of Representatives Election Campaign Account, within the Presidential Election Campaign Fund, to provide matching payments to eligible House candidates; Eligibility would have been established by (1) raising at least $10,000 from individuals in that election cycle; (2) qualifying for the primary or general election ballot; (3) having an opponent in the primary or general election; and (4) limiting receipts and expenditures in election to $500,000 or the aggregate matching payment limit, whichever was greater; Would have provided for an equal match of contributions from in-state individuals whose aggregate contributions to that candidate for that election did not exceed $500; Aggregate matching payments were not to exceed $175,000 in an election, unless (1) a non-eligible opponent raised more than $500,000 for that election, in which case the matching fund payment could have equaled the opponent's receipts; (2) any opponent in a contested primary raised more than $50,000, in which case the payments could have been increased by up to $75,000; or (3) a runoff occurred, in which case the payments could have been increased by up to $50,000; Payments for House candidates were to have come from House of Representatives Election Campaign Account, once Secretary of Treasury determined that there were adequate funds for presidential campaigns, and from supplemental authorizations by Congress. Appendix C. Public Finance Bills in the 110 th Congress: Summary of Key Provisions H.R. 1614 (Tierney)—Clean Money, Clean Elections Act of 2007 (Introduced March 20, 2007; jointly referred to Committees on House Administration, Energy and Commerce, Ways and Means, and Oversight and Government Reform) Public finance provisions: Would have established voluntary public financing system for House candidates; Would have provided full public subsidies, 30 minutes of free broadcast time in primary and 75 minutes in general election, and additional broadcast time at 50% of lowest unit rate for House candidates who participate in public financing system and spend no private funds beyond subsidy once qualified; Would have allowed candidates, prior to qualification, to raise seed money (up to $50,000, in contributions of $100 or less); Major party candidates would have qualified for public financing by raising 1,500 $5 contributions from state residents; Subsidy would have equaled applicable percentage (60% for general election, 40% for major party candidate in primary, and 25% for other primary candidates) of 80% of base amount per election; Base amount would have been national average of winning House candidate expenditures in two most recent general elections, but not less than amount provided in previous election cycle (and would include annual adjustments based on media costs in the state in which the participating candidate is running); Would have reduced subsidy to 40% of amount otherwise determined for unopposed candidates; Would have provided additional subsidies to compensate for spending by opponents, opposing independent expenditures, and electioneering communications above specified thresholds; Would have denied lowest unit rate to non-participating House candidates; Would have created Clean Elections Review Commission to monitor functioning of House public financing program and make legislative recommendations; Would have authorized tax credits for contributions to the House Clean Elections Fund, subject to restrictions specified in the bill; Would have financed benefits from House of Representatives Election Fund using appropriated funds, qualifying contributions, unused seed money, and voluntary donations. Other provisions: In House races with at least one publicly financed candidate, would have limited party spending on behalf of a candidate to the lesser of 10% of general election candidate's subsidy or the coordinated party expenditure limit established in FECA ; Would have amended "contribution" to include anything of value for purpose of influencing a federal election and that was coordinated with candidate; Would have set specific reporting requirements for participating and non-participating candidates, particularly in final weeks of election or when specified financial thresholds are met; Would have limited the amount of party coordinated expenditures on behalf of publicly financed candidates; Would have defined "payment made in coordination with a candidate" to include payments (1) in cooperation, consultation or concert with, or at request or suggestion of a candidate or agent; (2) using candidate-prepared materials; (3) based on information about campaign plans provided by candidate's campaign for purpose of expenditure; (4) by a spender who during that election cycle had acted in an official position for a candidate, in an executive, policymaking, or advisory capacity; and (5) by a spender who had used the same consultants as an affected candidate during election cycle; would have deemed payments made in coordination with a candidate as a "contribution" or "expenditure" (but exempted a payment by a party in coordination with a "clean money" candidate); Would have required electronic filing of disclosure reports; Would have prohibited preemption of House campaign broadcast ads, unless beyond broadcasters' control; Would have prohibited franked mass mailings from 90 days before a primary election period through general election, unless Member was not a candidate or mailing promotes public forum with candidate name only; Would have authorized imposition of civil penalties for excessive contributions or expenditures (penalty may not exceed 10 times amount of excessive contribution or expenditure); Would have set specific reporting requirements for participating and non-participating candidates, particularly in final weeks of election or when specified financial thresholds are met; Included statement of findings and declarations; Would have allowed FEC to petition Supreme Court; If any provision or act of this statute were held unconstitutional, the remainder of act and statute would have been unaffected; would have provided for direct appeals to the Supreme Court. H.R. 2817 (Obey)—Let the Public Decide Clean Campaign Act (Introduced June 21, 2007; referred to Committees on House Administration, Ways and Means, and Rules) Public finance provisions: Would have set mandatory limits on House general election spending based on median household income per district, with a maximum of $2 million for all major party candidates in the wealthiest district; actual amount would be distributed according to the ratio of district-wide votes the nominees of each major-party received in the district during the three most recent general elections; In other (non-wealthiest) districts, the "maximum combined expenditures" for major-party candidates would have been $2 million minus two-thirds of the percentage difference between the median household incomes in the wealthiest district and the district in question, multiplied by $2 million; actual amount would have been distributed according to the ratio of district-wide votes the nominees of each major-party candidate received in the district during the three most recent general elections If no elections occurred with two major-party candidates, the vote-ratio for Senate elections during the same period would have been used to determine House spending limits noted above; Maximum expenditure for minor party or independent candidates would have been based on comparable ratios concerning that party's (or all independent candidates') votes in House general elections in the district, all federal offices in the state, or for presidential elections in the state (whichever amount were highest); Would have established a mechanism for candidates to increase their spending limits based on submission of specified number of petition signatures (not applicable to candidate with highest limit in the race); Would have limited House candidates' spending to funds from a proposed Grassroots Good Citizenship Fund, to be established within the U.S. Treasury, and to specified amounts from state and national party committees Grassroots Good Citizenship Fund would have been financed by voluntary taxpayer contributions (of at least $1) from any refunds owed, plus any additional contributions they wished to make, and by a tax on corporations of 0.1% on taxable income of more than $10 million; Would have directed FEC to make extensive public service announcements, through time made available by television networks, from January 15 to April 15 to promote the public financing fund; Would have allowed only one other source of campaign expenditures: contributions from national and state political parties, of up to 5% of the candidate's applicable spending limit; Would have limited spending in non-general House elections (i.e., primaries) to one-third of the general-election spending limit; If any part of the act or these amendments were held unconstitutional by the Supreme Court, would have provided for expedited consideration by Congress of a constitutional amendment to allow reasonable restrictions on contributions, expenditures, and disbursements in federal campaigns; any legislation enacted to enforce such an amendment would have expired four presidential elections after enactment, unless extended by Congress; Unless otherwise specified, legislation would have taken effect in 2009 and expired in 2022 (without legislative extension). Other provisions: Would have banned independent expenditures in connection with House elections (but would have provided for expedited consideration of a constitutional amendment to allow reasonable limits if the ban were held unconstitutional); Would have banned "soft money" spending in connection with House elections (but specified expedited consideration of a constitutional amendment to allow reasonable limits if the ban were held unconstitutional). H.R. 7022 (Larson)—Fair Elections Now Act (Introduced September 23, 2008; referred to the Committees on House Administration, Energy and Commerce, Oversight and Government Reform, and Rules) Public finance provisions: Would have established voluntary public financing system for House candidates; Would have provided full public subsidies, political advertising vouchers up to $100,000 (authority to use vouchers could be transferred to political parties for cash value), and additional broadcast time at 80% of lowest unit rate for House candidates who participate in public financing system and spend no private funds beyond subsidy once qualified; Would have allowed candidates, prior to qualification, to raise seed money (up to $75,000 in contributions of $100 or less) by raising $5 donations from at least 1,500 state residents; others would qualify by raising 150% of amount raised by major party candidates; Subsidy would have equaled applicable percentage (60% for general election, 40% for major party candidate in primary, and 25% for other primary candidates) of base amount per election; Base amount would have been 80 percent of the national average spending for the cycle by winning candidates in the last two election cycles; base would have been adjusted based on state media-market index to be determined by the FEC and FCC; additional indexing would have been based on the consumer price index; Would have reduced subsidy to 40% of amount otherwise determined for unopposed general election candidates; Would have allowed leadership PACs associated with participating candidates to accept contributions from individuals if those contributions did not exceed $100 annually, and disbursements did not benefit the participant's campaign; Would have created House Fair Elections Review Commission to monitor functioning of House public financing program (including debate functioning compared with similar state requirements for publicly funded candidates) and make legislative recommendations (bill includes provisions for expedited Senate consideration of such recommendations); Would have provided additional subsidies to compensate for spending by opponents, opposing independent expenditures, and electioneering communications above specified thresholds; Would have financed benefits from House Fair Elections fund using proceeds from "recovered spectrum" auctions, spectrum user fees, voluntary contributions, qualifying contributions, unused seed money, and voluntary donations. Other provisions: In House races with at least one publicly financed candidate, would have limited party spending on behalf of a candidate to the lesser of 10% of general election candidate's subsidy or the coordinated party expenditure limit established in FECA; Included statement of findings and declarations; Would have required publicly financed candidates to participate in debates; Would have extended the lowest unit rate (also known as the "lowest unit charge") to national political party committees; Would have prohibited preemption of House campaign broadcast ads, unless beyond broadcasters' control; Would have required electronic filing of disclosure reports; Would have prohibited franked mass mailings from 90 days before a primary election period through general election, unless Member is not a candidate or mailing promotes public forum with candidate name only; Would have authorized imposition of civil penalties for excessive contributions or expenditures (penalty may not exceed three times amount of excessive contribution or expenditure); Would have limited the amount of party coordinated expenditures on behalf of publicly financed candidates; Would set have specified reporting requirements for participating and non-participating candidates, particularly in final weeks of election or when specified financial thresholds are met; Would have allowed FEC to petition Supreme Court; Appeals related to the act's constitutionality could have been taken directly to the Supreme Court of the United States. S. 936 (Durbin)—Fair Elections Now Act (Introduced March 20, 2007; referred to the Committee on Finance) Public finance provisions: Would have established voluntary public financing system for Senate candidates; Would have provided full public subsidies, political advertising vouchers up to $100,000 multiplied by the number of congressional districts in the state in which the candidate is running (authority to use vouchers could be transferred to political parties for cash value), and additional broadcast time at 80% of lowest unit rate for Senate candidates who participate in public financing system and spend no private funds beyond subsidy once qualified; Would have allowed candidates, prior to qualification, to raise seed money (up to $75,000 plus $7,500 for each congressional district in the state in excess of one district, in contributions of $100 or less) by raising $5 donations from state residents (number of contributions must be at least equal to the sum of 2,000 plus 500 for each congressional district in the state in excess of one district) others would qualify by raising 150% of amount raised by major party candidates; Subsidy would have equaled applicable percentage (100% for general election, 67% for major party candidate in primary, and 25% for other primary candidates) of base amount per election; Base amount would have been $750,000 plus $150,000 for each congressional district in the state in excess of one congressional district; base would have been adjusted based on state media-market index to be determined by the FEC and FCC; additional indexing would have been based on the consumer price index; Would have reduced subsidy to 25% of amount otherwise determined for unopposed general election candidates; Would have allowed leadership PACs associated with participating candidates to accept contributions from individuals if those contributions did not exceed $100 annually, and disbursements did not benefit the participant's campaign; Would have created Senate Fair Elections Commission to monitor functioning of House public financing program (including debate functioning compared with similar state requirements for publicly funded candidates) and make legislative recommendations (bill includes provisions for expedited Senate consideration of such recommendations); Would have authorized tax credits for contributions to the Senate Fair Elections Fund, subject to restrictions specified in the bill; Would have provided additional subsidies to compensate for spending by opponents, opposing independent expenditures, and electioneering communications above specified thresholds; Would have financed benefits from Senate Fair Elections fund using proceeds from "recovered spectrum" auctions, spectrum user fees, voluntary contributions, qualifying contributions, unused seed money, and voluntary donations. Other provisions: In Senate races with at least one publicly financed candidate, would have limited party spending on behalf of a candidate to the lesser of 10% of general election candidate's subsidy or the coordinated party expenditure limit established in FECA; Included statement of findings and declarations; Would have required publicly financed candidates to participate in debates; Would have extended the lowest unit rate (also known as the "lowest unit charge") to national political party committees; Would have prohibited preemption of Senate campaign broadcast ads, unless beyond broadcasters' control; Would have required electronic filing of disclosure reports; Would have prohibited franked mass mailings from 90 days before a primary election period through general election, unless Member was not a candidate or mailing promotes public forum with candidate name only; Would have authorized imposition of civil penalties for excessive contributions or expenditures (penalty may not exceed three times amount of excessive contribution or expenditure); Would have limited the amount of party coordinated expenditures on behalf of publicly financed candidates; Would have set specific reporting requirements for participating and non-participating candidates, particularly in final weeks of election or when specified financial thresholds were met; Would have allow FEC to petition Supreme Court; If any provision of the act were held unconstitutional, the remainder of act and statute would have been unaffected; Appeals related to the act's constitutionality could have been taken directly to the Supreme Court of the United States. S. 1285 (Durbin)—Fair Elections Now Act (Introduced May 3, 2007; referred to the Committee on Rules and Administration) Public finance provisions: Would have established voluntary public financing system for Senate candidates; Would have provided full public subsidies, political advertising vouchers up to $100,000 multiplied by the number of congressional districts in the state in which the candidate is running (authority to use vouchers could be transferred to political parties for cash value), and additional broadcast time at 80% of lowest unit rate for Senate candidates who participate in public financing system and spend no private funds beyond subsidy once qualified; Would have allowed candidates, prior to qualification, to raise seed money (up to $75,000 plus $7,500 for each congressional district in the state in excess of one district, in contributions of $100 or less) by raising $5 donations from state residents (number of contributions must be at least equal to the sum of 2,000 plus 500 for each congressional district in the state in excess of one district) others would have qualified by raising 150% of amount raised by major party candidates; Subsidy would have equaled applicable percentage (100% for general election, 67% for major party candidate in primary, and 25% for other primary candidates) of base amount per election; Base amount would have been $750,000 plus $150,000 for each congressional district in the state in excess of one congressional district; base would have been adjusted based on state media-market index to be determined by the FEC and FCC; additional indexing would be based on the consumer price index; Would have reduced subsidy to 25% of amount otherwise determined for unopposed general election candidates; Would have allowed leadership PACs associated with participating candidates to accept contributions from individuals if those contributions did not exceed $100 annually, and disbursements did not benefit the participant's campaign; Would have created Senate Fair Elections Review Commission to monitor functioning of House public financing program (including debate functioning compared with similar state requirements for publicly funded candidates) and make legislative recommendations (bill includes provisions for expedited Senate consideration of such recommendations); Would have provided additional subsidies to compensate for spending by opponents, opposing independent expenditures, and electioneering communications above specified thresholds; Would have financed benefits from Senate Fair Elections fund using proceeds from "recovered spectrum" auctions, spectrum user fees, voluntary contributions, qualifying contributions, unused seed money, and voluntary donations. Other provisions: In Senate races with at least one publicly financed candidate, would have limited party spending on behalf of a candidate to the lesser of 10% of general election candidate's subsidy or the coordinated party expenditure limit established in FECA; Included statement of findings and declarations; Would have required publicly financed candidates to participate in debates; Would have extended the lowest unit rate (also known as the "lowest unit charge") to national political party committees; Would have prohibited preemption of Senate campaign broadcast ads, unless beyond broadcasters' control; Would have required electronic filing of disclosure reports; Would have prohibited franked mass mailings from 90 days before a primary election period through general election, unless Member is not a candidate or mailing promotes public forum with candidate name only; Would have authorized imposition of civil penalties for excessive contributions or expenditures (penalty may not exceed three times amount of excessive contribution or expenditure); Would have limited the amount of party coordinated expenditures on behalf of publicly financed candidates; Would set have specified reporting requirements for participating and non-participating candidates, particularly in final weeks of election or when specified financial thresholds were met; Would have allowed FEC to petition Supreme Court; If any provision of the act were held unconstitutional, the remainder of act and statute would have been unaffected. Appeals related to the act's constitutionality could have been taken directly to the Supreme Court of the United States. Appendix D. Public Finance Bills in the 111 th Congress: Summary of Key Provisions H.R. 158 (Obey)—Let the P ublic Decide Clean Campaign Act (Introduced January 6, 2009; referred to Committees on House Administration, Ways and Means, and Rules) Public finance provisions: Would have set mandatory limits on House general election spending based on median household income per district, with a maximum of $2 million for all major party candidates in the wealthiest district; actual amount would have been distributed according to the ratio of district-wide votes the nominees of each major-party received in the district during the three most recent general elections; In other (non-wealthiest) districts, the "maximum combined expenditures" for major-party candidates would have been $2 million minus two-thirds of the percentage difference between the median household incomes in the wealthiest district and the district in question, multiplied by $2 million; actual amount would have been distributed according to the ratio of district-wide votes the nominees of each major-party candidate received in the district during the three most recent general elections If no elections occurred with two major-party candidates, the vote-ratio for Senate elections during the same period would have been used to determine House spending limits noted above; Maximum expenditure for minor party or independent candidates would have been based on comparable ratios concerning that party's (or all independent candidates') votes in House general elections in the district, all federal offices in the state, or for presidential elections in the state (whichever amount were highest); Would have established a mechanism for candidates to increase their spending limits based on submission of specified number of petition signatures (not applicable to candidate with highest limit in the race); Would have limited House candidates' spending to funds from a proposed Grassroots Good Citizenship Fund, to be established within the U.S. Treasury, and to specified amounts from state and national party committees Grassroots Good Citizenship Fund would have been financed by voluntary taxpayer contributions (of at least $1) from any refunds owed, plus any additional contributions they wished to make, and by a tax on corporations of 0.1% on taxable income of more than $10 million; Would have directed FEC to make extensive public service announcements, through time made available by television networks, from January 15 to April 15 to promote the public financing fund; Would have allowed only one other source of campaign expenditures: contributions from national and state political parties, of up to 5% of the candidate's applicable spending limit; Would have limited spending in non-general House elections (i.e., primaries) to one-third of the general-election spending limit; If any part of the act or these amendments were held unconstitutional by the Supreme Court, would have provided for expedited consideration by Congress of a constitutional amendment to allow reasonable restrictions on contributions, expenditures, and disbursements in federal campaigns; any legislation enacted to enforce such an amendment would expire four presidential elections after enactment, unless extended by Congress; Unless otherwise specified, legislation would have taken effect in 2012 and expire in 2026 (without legislative extension). Other provisions: Would have banned independent expenditures in connection with House elections (but would provide for expedited consideration of a constitutional amendment to allow reasonable limits if the ban were held unconstitutional); Would have banned "soft money" spending in connection with House elections (but specifies expedited consideration of a constitutional amendment to allow reasonable limits if the ban were held unconstitutional). H.R. 1826 (Larson)—Fair Elections Now Act (Introduced March 31, 2009; referred to Committees on House Administration, Energy and Commerce, and Ways and Means) Public finance provisions: Would have applied to House candidates voluntarily participating in public financing; Would have provided base subsidy (allocation) of 80% of the national average of spending by winning House candidates in the previous two election cycles; base subsidy would be adjusted to 40% of the base for primary elections; the remaining 60% would be allocated to the general election; Would have provided matching funds equal to 400% (up to 200% of the base) of "small dollar" contributions (no more than $100 per individual contributor, per election); Would have provided $100,000 in broadcast vouchers for the general election; Would have provided lesser amounts of the benefits discussed above to minor-party candidates or those in uncontested or runoff elections; Would have permitted participants to purchase additional broadcast time at 80% of the lowest unit charge (lowest unit rate) for 45 days before the primary and 60 days before the general election; Would have extended lowest unit charge to national parties Participants would have qualified for public financing by raising qualifying contributions of no more than $100 per individual contributor (limited to state residents) to the greater of 1,500 contributions or $50,000; Would have prohibited participating candidates from spending funds other than qualifying contributions, "small dollar" contributions, allocations from the proposed Fair Elections Fund, and broadcast vouchers; Would have limited the amount of party coordinated expenditures on behalf of publicly financed candidates to the lesser of 10% of the candidate's base allocation amount or established limits in FECA; Would have funded public financing through appropriations (unspecified amount), proceeds from fines and voluntary contributions, "check-off" designations on individual federal income tax returns ($10 for individuals; $20 for married couples filing jointly), and spectrum auctions; Would have created Fair Elections Oversight Board within the FEC to monitor functioning of congressional public financing program, including program benefits and limitations, and perform other duties delegated by the FEC; Would have established penalties for prohibited spending (or accepting prohibited contributions) by publicly financed candidates. Other provisions: Would have required participating candidates to participate in debates; Would have required participating candidates to accept public funds both during primary and general elections; Would have required FCC to initiate a rulemaking to develop a standard form for broadcasters to report certain information about campaign advertising, which broadcasters would have to make available via the Internet; Would have prohibited preemption of candidates' paid broadcast advertising, unless beyond broadcaster's control; Would have allowed leadership PACs associated with participating candidates to accept contributions from individuals if those contributions did not exceed $100 annually and disbursements did not benefit the participant's campaign; Would have prohibited participating candidates' authorized political committees (principal campaign committees) from establishing joint fundraising committees, except with other authorized committees; Would have allowed the FEC to petition Supreme Court; If any provision of the act were held unconstitutional, the remainder of act and statute would have been unaffected. H.R. 6116 (Larson)—Fair Elections Now Act (Introduced September 14, 2010; referred to Committees on House Administration and Energy and Commerce; reported favorably by Committee on House Administration December 21, 2010) Public finance provisions: Would have applied to House candidates voluntarily participating in public financing; Would have provided base subsidy (allocation) of 80% of the national average of spending by winning House candidates in the previous two election cycles; base subsidy would have been adjusted to 40% of the base for primary elections; the remaining 60% would have been allocated to the general election; Would have provided matching funds equal to 400% (up to 200% of the base) of "small dollar" contributions (no more than $100 per individual contributor, per election); Would have provided recount funding in the amount of 25% of base allocation for relevant election; Would have provided lesser amounts of the benefits discussed above to minor-party candidates or those in uncontested or runoff elections; Participants would have qualified for public financing by raising qualifying contributions of no more than $100 (from state residents) to the lesser of: (1) at least $50,000 from at least 1,500 individuals; or (2) at least $50,000 from at least 0.25% of voting age population (VAP) in the state involved (according to the most recent decennial Census); Would have prohibited participating candidates from spending funds other than qualifying contributions, "small dollar" contributions, allocations from the proposed Fair Elections Fund, and limited amounts raised before becoming a publicly financed candidate; Would have limited the amount of party coordinated expenditures on behalf of publicly financed candidates to the lesser of 10% of the candidate's base allocation amount or established limits in FECA; Would have funded public financing through appropriations (unspecified amount), proceeds from fines and voluntary contributions; Would have created Fair Elections Oversight Board within the FEC to monitor functioning of congressional public financing program, including program benefits and limitations, and perform other duties delegated by the FEC; Would have established penalties for prohibited spending (or accepting prohibited contributions) by publicly financed candidates. Other provisions: Would have required participating candidates to participate in debates; Would have required participating candidates to accept public funds both during primary and general elections; Would have allowed leadership PACs associated with participating candidates to accept contributions from individuals if those contributions did not exceed $100 annually and disbursements did not benefit the participant's campaign; Would have prohibited participating candidates' authorized political committees (principal campaign committees) from establishing joint fundraising committees, except with other authorized committees; Would have allowed the FEC to petition Supreme Court; If any provision of the act were held unconstitutional, the remainder of act and statute would be unaffected. S. 752 (Durbin)—Fair Elections Now Act (Introduced March 31, 2009; referred to Committee on Rules and Administration) Public finance provisions: Would have applied to Senate candidates voluntarily participating in public financing; Participants would have qualified for public financing by raising qualifying contributions of no more than $100 per individual contributor (limited to state residents) to the sum of 2,000 plus 500 for each congressional district in the state, provided that the total dollar amount is at least 10% of the candidate's base allocation for the primary election; Would have provided base subsidy (allocation) of $750,000 plus $150,000 for each congressional district in the state; subsidy would be adjusted to 67% of the base for primary elections; Would have provided matching funds equal to 400% (up to 200% of the base) of "small dollar" contributions (no more than $100 per individual contributor, per election); For the general election, would have provided $100,000 in broadcast vouchers multiplied by the number of congressional districts in the state; Would have provided lesser amounts of the benefits discussed above to minor-party candidates or those in uncontested or runoff elections; Would have permitted participants to purchase additional broadcast time at 80% of the lowest unit charge (lowest unit rate) for 45 days before the primary and 60 days before the general election; Would have extended lowest unit charge to national parties Would have prohibited participating candidates from spending funds other than qualifying contributions, "small dollar" contributions, allocations from the proposed Fair Elections Fund, and broadcast vouchers; Would have limited the amount of party coordinated expenditures on behalf of publicly financed candidates to the lesser of 10% of the candidate's base allocation amount or established limits in FECA; Included sense of the Senate language calling for proceeds from a proposed 0.5% tax on government contacts of more than $10 million to be appropriated to fund Senate public financing [see separate funding legislation, S. 751 (Durbin)]; proceeds from fines and voluntary contributions would also fund Senate campaigns; Would have created Fair Elections Oversight Board within the FEC to monitor functioning of congressional public financing program, including program benefits and limitations, and perform other duties delegated by the FEC; Would have established penalties for prohibited spending (or accepting prohibited contributions) by publicly financed candidates. Other provisions: Would have required participating candidates to participate in debates; Would have required FCC to initiate a rulemaking to develop a standard form for broadcasters to report certain information about campaign advertising, which broadcasters would have had to make available via the Internet; Would have allowed leadership PACs associated with participating candidates to accept contributions from individuals if those contributions did not exceed $100 annually and disbursements did not benefit the participant's campaign; Would have prohibited participating candidates' authorized political committees (principal campaign committees) from establishing joint fundraising committees, except with other authorized committees; Would have allowed the FEC to petition Supreme Court; If any provision of the act were held unconstitutional, the remainder of act and statute would have been unaffected. H.R. 2056 (Tierney)—Clean Mo ney, Clean Elections Act of 2009 (Introduced April 22, 2009; jointly referred to Committees on House Administration, Energy and Commerce, Ways and Means, and Oversight and Government Reform) Public finance provisions: Would have established voluntary public financing system for House candidates; Would have provided full public subsidies, 30 minutes of free broadcast time in primary and 75 minutes in general election, and additional broadcast time at 50% of lowest unit rate for House candidates who participate in public financing system and spend no private funds beyond subsidy once qualified; Major-party candidates could have qualified for public financing by raising 1,500 $5 contributions from state residents; Would have allowed candidates, prior to qualification, to raise seed money (up to $50,000, in contributions of $100 or less); Subsidy would have equaled applicable percentage (60% for general election, 40% for major party candidate in primary, and 25% for other primary candidates) of 80% of base amount per election; Base amount would have been national average of winning House candidate expenditures in two most recent general elections, but not less than amount provided in previous election cycle (and would include annual adjustments based on media costs in the state in which the participating candidate is running); Would have reduced subsidy to 40% of amount otherwise determined for unopposed candidates; Would have provided additional subsidies to compensate for spending by opponents, opposing independent expenditures, and electioneering communications above specified thresholds; Would have denied lowest unit rate to non-participating House candidates; Would have created Clean Elections Review Commission to monitor functioning of House public financing program and make legislative recommendations; Would have authorized tax credits for contributions to the House Clean Elections Fund, subject to restrictions specified in the bill; Would have financed benefits from House of Representatives Election Fund using appropriated funds, qualifying contributions, unused seed money, and voluntary donations. Other provisions: In House races with at least one publicly financed candidate, would have limited party spending on behalf of a candidate to the lesser of 10% of general election candidate's subsidy or the coordinated party expenditure limit established in FECA; Would have amended "contribution" to include anything of value for purpose of influencing a federal election and that was coordinated with candidate; Would have set specific reporting requirements for participating and non-participating candidates, particularly in final weeks of election or when specified financial thresholds are met; Would have limited the amount of party coordinated expenditures on behalf of publicly financed candidates; Would have defined "payment made in coordination with a candidate" to include payments (1) in cooperation, consultation or concert with, or at request or suggestion of a candidate or agent; (2) using candidate-prepared materials; (3) based on information about campaign plans provided by candidate's campaign for purpose of expenditure; (4) by a spender who during that election cycle had acted in an official position for a candidate, in an executive, policymaking, or advisory capacity; and (5) by a spender who had used the same consultants as an affected candidate during election cycle; would have deemed payments made in coordination with a candidate as a "contribution" or "expenditure" (but exempted a payment by a party in coordination with a "clean money" candidate); Would have required electronic filing of disclosure reports; Would have prohibited preemption of House campaign broadcast ads, unless beyond broadcasters' control; Would have prohibited franked mass mailings from 90 days before a primary election period through general election, unless Member was not a candidate or mailing promotes public forum with candidate name only; Would have authorized imposition of civil penalties for excessive contributions or expenditures (penalty may not exceed 10 times amount of excessive contribution or expenditure); Would have set specific reporting requirements for participating and non-participating candidates, particularly in final weeks of election or when specified financial thresholds are met; Included statement of findings and declarations; Would have allowed FEC to petition Supreme Court; If any provision or act of this statute were held unconstitutional, the remainder of act and statute would have been unaffected; would provided for direct appeals to the Supreme Court. Appendix E. Public Finance Bills in the 112 th Congress: Summary of Key Provisions H.R. 1404 (Larson)—Fair Elections Now Act (Introduced April 6, 2011; referred to Committees on House Administration) Public finance provisions: Would apply to House candidates voluntarily participating in public financing; Would provide base subsidy (allocation) of 80% of the national average of spending by winning House candidates in the previous two election cycles; base subsidy would be adjusted to 40% of the base for primary elections; the remaining 60% would be allocated to the general election; Would provide matching funds equal to 500% (up to 300% of the base) of "small dollar" contributions (no more than $100 per individual contributor, per election); Would provide recount funding in the amount of 25% of base allocation for relevant election; Would provide lesser amounts of the benefits discussed above to minor-party candidates or those in uncontested or runoff elections; Participants would qualify for public financing by raising qualifying contributions of no more than $100 (from state residents) to the lesser of: (1) at least $50,000 from at least 1,500 individuals; or (2) at least $50,000 from at least 0.25% of voting age population (VAP) in the state involved (according to the most recent decennial Census); Would prohibit participating candidates from spending funds other than qualifying contributions, "small dollar" contributions, allocations from the proposed Fair Elections Fund, and limited amounts raised before becoming a publicly financed candidate; Would limit the amount of party coordinated expenditures on behalf of publicly financed candidates to the lesser of 10% of the candidate's base allocation amount or established limits in FECA; Would fund public financing through appropriations (unspecified amount), proceeds from fines and voluntary contributions; Would create Fair Elections Oversight Board within the FEC to monitor functioning of congressional public financing program, including program benefits and limitations, and perform other duties delegated by the FEC; Would establish penalties for prohibited spending (or accepting prohibited contributions) by publicly financed candidates. Other provisions: Would require participating candidates to participate in debates; Would require participating candidates to accept public funds both during primary and general elections; Would allow leadership PACs associated with participating candidates to accept contributions from individuals if those contributions did not exceed $100 annually and disbursements did not benefit the participant's campaign; Would prohibit participating candidates' authorized political committees (principal campaign committees) from establishing joint fundraising committees, except with other authorized committees; Would require electronic filing of FEC reports; Would allow the FEC to petition Supreme Court; If any provision of the act were held unconstitutional, the remainder of act and statute would be unaffected. S. 750 (Durbin)—Fair Elections Now Act (Introduced April 6, 2011, referred to Committee on Rules and Administration) Public finance provisions: Would apply to Senate candidates voluntarily participating in public financing; Participants would qualify for public financing by raising qualifying contributions of no more than $100 per individual contributor (limited to state residents) to the sum of 2,000 plus 500 for each congressional district in the state, provided that the total dollar amount is at least 10% of the candidate's base allocation for the primary election; Would provide base subsidy (allocation) of $750,000 plus $150,000 for each congressional district in the state; subsidy would be adjusted to 67% of the base for primary elections; Would provide matching funds equal to 500% (up to 300% of the base) of "small dollar" contributions (no more than $100 per individual contributor, per election); For the general election, would provide $100,000 in broadcast vouchers multiplied by the number of congressional districts in the state; Would provide lesser amounts of the benefits discussed above to minor-party candidates or those in uncontested or runoff elections; Would permit participants to purchase additional broadcast time at 80% of the lowest unit charge (lowest unit rate) for 45 days before the primary and 60 days before the general election; Would extend lowest unit charge to national parties; Would prohibit participating candidates from spending funds other than qualifying contributions, "small dollar" contributions, allocations from the proposed Fair Elections Fund, and broadcast vouchers; Would not limit coordinated party expenditures made on behalf of publicly financed candidates if the funds used for those expenditures came from individual contributions of no more than $500; Includes sense of the Senate language calling for proceeds from a proposed 0.5% tax on government contacts of more than $10 million to be appropriated to fund Senate public financing (see separate funding legislation, S. 749 (Durbin)); proceeds from fines and voluntary contributions would also fund Senate campaigns; Would create Fair Elections Oversight Board within the FEC to monitor functioning of congressional public financing program, including program benefits and limitations, and perform other duties delegated by the FEC; Would establish penalties for prohibited spending (or accepting prohibited contributions) by publicly financed candidates. Other provisions: Would require participating candidates to participate in debates; Would require FCC to initiate a rulemaking to develop a standard form for broadcasters to report certain information about campaign advertising, which broadcasters would have to make available via the Internet; Would allow leadership PACs associated with participating candidates to accept contributions from individuals if those contributions did not exceed $100 annually and disbursements did not benefit the participant's campaign; Would prohibit participating candidates' authorized political committees (principal campaign committees) from establishing joint fundraising committees, except with other authorized committees; Would allow the FEC to petition Supreme Court; If any provision of the act were held unconstitutional, the remainder of act and statute would be unaffected.

Summary: To critics, public campaign financing, generally in conjunction with spending limits, is the ultimate solution to perceived problems arising from ever-growing costs of campaigns and the accompanying need for privately donated campaign funds. Public financing supporters maintain that replacing private funds with public money would most effectively reduce potentially corrupting influence from "interested" money. On the other hand, opponents of public financing question whether real or apparent corruption from private fundraising is as serious a problem as critics claim. They also argue that public financing would be an inappropriate use of taxpayer dollars and would compel taxpayers to fund candidates they find objectionable. In the early 1970s, supporters succeeded in enacting public financing in presidential elections, a system that has been available since 1976. In addition, many states and localities have provided public financing in their elections since the 1970s (or before). Today, 16 states offer some form of direct aid to candidates' campaigns through fixed subsidies or matching funds. Perceptions about the presidential and state public financing systems have shaped opinions about adding public financing to congressional elections. Also shaping that debate was the Supreme Court's landmark 1976 Buckley v. Valeo ruling, which struck down mandatory spending limits, but sanctioned voluntary spending limits accompanying public financing. Proposals for publicly funded congressional elections have been offered in almost every Congress since 1956; the issue was prominently debated in the mid-1970s and the late 1980s through early 1990s. Proposals were passed twice by the Senate in the 93rd Congress and by both the House and Senate in the 101st, 102nd, and 103rd Congresses. Only the 102nd Congress proposal was reconciled in conference but was vetoed by the President. Thus far in the 112th Congress, Senator Durbin and Representative Larson introduced the latest versions of the Fair Elections Now Act (FENA) on April 6, 2011. These include S. 750 and H.R. 1404; S. 749 is a separate measure that would finance the program proposed in S. 750. The two versions of FENA, S. 750 and H.R. 1404, are similar to three bills introduced during the 111th Congress (H.R. 6116, which superseded H.R. 1826, and S. 752). Like their predecessors, the current versions of FENA propose to provide participating candidates with a mix of base subsidies, matching funds, and broadcast vouchers. The current versions of FENA propose two changes in incentives for participating candidates compared with 111th Congress versions of the legislation. First, although the types of available funding remain consistent, participants would be eligible for larger funding amounts. Second, coordinated party expenditures would be unlimited if funds used for those expenditures came from individual contributions of less than $500. Appendix D and Appendix E at the end of the report summarize major provisions of legislation introduced in the 111th and 112th Congresses respectively. In addition to discussing recent legislation, this report reviews past proposals for, and debate over, congressional public financing. It also discusses experiences with the presidential and state public financing systems. Finally, the report offers potential considerations for Congress in devising a public financing system for its elections. The report will be updated periodically, on the basis of congressional and state activities.