During the primary stage of the presidential selection process, a candidate may become eligible for public matching funds that offer a dollar-for-dollar match on an amount up to $250 for each individual contributor. Only candidates who seek the nomination by a political party to the office of President are eligible to receive primary matching funds. This includes candidates seeking to be the nominee of minor parties, such as the Natural Law Party or Green Party, that select a presidential nominee at a party convention, but do not hold state primaries or caucuses.
Eligibility
In order to qualify for matching funds, a candidate must meet certain eligibility requirements. Specifically, a candidate must:
- raise at least $5,000 in individual contributions of up to $250 in twenty states (a total of at least $100,000 nationwide);
- agree to limit spending from personal funds to $50,000; and
- agree to abide by an aggregate ceiling on campaign spending and state-by-state spending limits.
To receive public funds, a candidate must agree to two types of spending limits. These limits apply to all the monies spent by a candidate from the time he or she becomes a candidate until the time that a nominee is chosen at the national party convention.
First, a candidate is subject to a limit on total primary campaign spending, which is often called the aggregate limit. This limit is based on a formula established in the 1974 FECA, which calls for a base limit of $10 million, adjusted for inflation, plus an additional 20% for fundraising expenses. A candidate is also allowed to spend an additional amount to pay the legal and accounting costs incurred to comply with the law. In 1976, the first presidential election conducted under the public funding program, each candidate who accepted matching funds was allowed to spend about $13 million during the primaries. In 2000, the FEC modified the spending limit by allowing a candidate to spend up to 15%of the base limit on legal and compliance costs, excluding any expenses incurred to wind down a campaign after a candidate has dropped out of the race. In 2004, with these various adjustments included, each publicly funded candidate was allowed to spend a total of almost $50 million seeking the presidential nomination.
In addition, the law limits how much a candidate may spend in each state. The amount allowed under these state ceilings depends on the voting-age-population in a state. In 2004, these state limits ranged from a minimum of about $746,000 in a low population state like New Hampshire to more than $15 million in California. These state limits, however, are governed by many complicated rules that determine the expenditures that count against a particular state's ceiling. Consequently, they have not proven to be very effective in limiting candidate spending, and candidates are usually only concerned about state ceilings in Iowa and New Hampshire, the two states that traditionally start the presidential primaries.
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Payments
Once a candidate has qualified for matching funds, any contribution of up to $250 per contributor received after January 1 of the year before the election is eligible for matching. The first payments of public money are made on January 1 of the election year, and on a monthly basis thereafter. The maximum amount of matching money that a candidate may receive is one-half of the base aggregate spending limit. (In 2004, this would have equaled more than $18 million, since the base limit of $10 million set in 1974 had grown to more than $37 million in 2004, as a result of the adjustments for inflation.)
Under rules adopted by the FEC, a candidate who fails to receive 10% of the vote in two consecutive state primaries in which he or she is on the ballot is no longer eligible to continue to earn matching funds. A candidate who fails to meet this threshold can restore eligibility by winning 20% of the vote in a subsequent state primary. Candidates who are eligible to receive matching funds, even though they may no longer be campaigning actively for the nomination, may continue to request public funds to pay off their campaign debts until late February or early March of the year following the election.
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