Have you ever thought about how is the US Presidential elections actually funded?
The 2024 US Presidential elections will be the 60th presidential election, scheduled on 5 November, 2024. Voters will elect a president and vice president for a term of four years.
The funding of US Presidential elections in the US happens at the federal, state, and local levels by contributions from individuals, corporations, political action committees, and also the government.
Under the US Presidential elections ‘public’ funding program, eligible presidential candidates receives government funds to pay for the ‘qualified’ expenses of their political campaigns in both the primary and general elections. The public funding program was designed to use funds to:
- Match the first $250 of each contribution from individuals that an eligible US Presidential elections candidate receives during the primary campaign; and
- Fund the major party nominees’ general election campaigns (and assist eligible minor party nominees)..
Primary matching funds
The candidates seeking nomination for the President’s seat can receive primary matching funds. Such candidate needs to substantiate his/her eligibility by demonstrating a broad-based public support. He or she has to raise more than $5,000 in each of at least 20 states (ie over $100,000).
Though an individual may contribute up to a predefined threshold to a primary candidate, only a maximum of $250 of each individual’s contribution is considered in determining whether a candidate has met the $5,000 threshold in each state. In other words, a candidate must receive contributions from a minimum of 20 contributors in each of at least 20 states for demonstrating his or her eligibility for primary matching funds.
Also US Presidential election candidate must agree to:
- Limit campaign spending for all primary elections totaling to $10 Mn plus a cost-of-living adjustment (COLA).
- Limit campaign spending in each state to $200,000 plus COLA, or to a specified amount based on the number of voting age individuals in the state (plus COLA), whichever is greater.
- Limit spending from personal funds to $50,000.
The US Presidential elections finance law provides exemption to certain expenses from the aforesaid spending limits. Certain fundraising expenses up to 20 percent of the expenditure limit and legal and accounting expenses incurred solely to ensure the campaign’s compliance with the law do not count against the expenditure limits.
The candidates may request public funds to pay off campaign expenses until the first Monday of March of the year following US Presidential elections. However, to qualify for matching funds, contributions must be deposited in the campaign account by December 31 of the election year.
General Election funds
Public funding for major party US Presidential elections nominees in the general election is to the tune of $20 million plus the COLA. However in order to receive the funds, the presidential nominee of a major party needs to agree to limit spending to the amount of the grant and may not accept private contributions for the campaign. Candidates can spend an additional $50,000 from their own personal funds, which does not count against the expenditure limit.
Minor party candidates and new party candidates may become eligible for partial public funding of their general election campaigns. A minor party candidate is the nominee of a party whose candidate received between five and 25 percent of the total popular vote in the preceding US Presidential elections. The amount of public funding to which a minor party candidate is entitled is based on the ratio of the party’s popular vote in the preceding presidential election to the average popular vote of the two major party candidates in that election.
A new party candidate receives partial public funding after the election if he or she receives five percent or more of the vote. The entitlement is based on the ratio of the new party candidate’s popular vote in the current election to the average popular vote of the two major party candidates in the election.
The 3$ tax checkoff
The FEC certifies the amount of public funds to which the candidate is entitled once the FEC makes sure that a candidate has met the eligibility requirements, The U.S. Treasury then makes the payments using funds from the $3 tax checkoff.
The 1040 federal income tax form asks taxpayers whether they’d like to designate $3 of their taxes paid to the US Presidential elections Campaign Fund. When taxpayers check ‘yes’, three of their tax dollars are placed in the Fund. Checking the ‘yes’ box does not increase the amount of tax that taxpayers owe, nor does it decrease any refund to which they are entitled. The tax checkoff is the sole source of funds for the public funding program.
Mandatory audits
The FEC audits all campaigns that receive public funds for either the primary or general election. Candidates may owe a repayment to the Treasury if they used public funds to defray non-campaign related expenses, exceeded the expenditure limits, maintained a surplus of public funds, or received more public funds than they were entitled to receive.
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Credit to FEC’s official website for all the insights! Credits to Google for all the images!