As part of the landmark 1974 Federal Election Campaign Act (FECA), Congress created a voluntary program of public financing for presidential elections that was designed to reduce the reliance on private funds and enhance the role of small individual donations in the financing of presidential campaigns. The program offers public monies to qualified candidates, including major and minor party candidates, and national party committees to help pay the costs of a presidential campaign. To qualify for public money, a candidate has to agree to limit the amount he or she will spend on a campaign. The program was thus designed to help level the financial playing field in the race for the nation's highest office.
The funding for this program, as established by the Revenue Act of 1971, comes from a tax checkoff on individual federal income tax forms. Originally, individuals who pay income taxes could check a box on the tax form to designate $1 (or $2 if filing a joint return) to the Presidential Election Campaign Fund, an account maintained by the U.S. Treasury, for the purposes of financing the costs of the program. In 1993, the amount of the checkoff was increased to $3 for an individual or $6 for a joint filer. (See Tax Return Checkoff.)
Presidential candidates are subject to the same contribution limits and disclosure requirements as other federal candidates. They may accept contributions of up to $2,000 per election from an individual and up to $5,000 per election from a political action committee (PAC). They may not accept any corporate or labor union money, nor may they solicit or use any money that is not subject to federal contribution limits. Presidential candidates who accept public funds are also subject to additional restrictions. As a condition of eligibility to receive public money, a candidate must agree to abide by limits on campaign spending and agree to give no more than $50,000 in personal funds for use in the campaign. Presidential contenders who decide not to accept public money face no limits on the amount of money their campaigns may spend and no limit on the amount they may spend from their personal resources.
