News Release

November 25, 2003

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Public Financing of Presidential Campaigns Losing Support
With $2 billion spent and nothing gained, taxpayers and candidates are opting out

WASHINGTON -- Nearly 30 years ago, Congress created a system of public financing for presidential campaigns. Today that system is in trouble, facing insolvency and diminishing support. While some advocates still want to save the program by increasing its funding, it is worth considering what taxpayers have received in return for the $2 billion that's been invested in the system. Not much, according to a new Cato Institute study.

Congress does not appropriate the funds that support the program. Instead, taxpayers check a box on their income tax forms to allocate money to it. "The participation rate in the presidential public funding system has declined steadily since its inception," John Samples, director of the Cato Institute's Center for Representative Government, notes in "The Failures of Taxpayer Financing of Presidential Campaigns." Participation was once as high as 28 percent, but by 2000 it had dropped to just over 10 percent. By 2008, it is likely that twice as many Americans will be contributing directly to political campaigns instead of choosing to check off the tax-form box.

Not only has the system become unpopular, but it has also failed to meet its stated objectives. Public financing was supposed to increase competition in presidential elections. In practice, the system has not increased the number of candidates running in primaries; it has, however, provided hefty subsidies for the two already dominant political parties. Samples argues that "public financing has not so much changed what happens as who pays for what happens."

Candidates, too, are rejecting publicly financed campaigns. George W. Bush won in 2000 without taxpayer cash and will likely rely on private donations for most of 2004. Democratic insurgent Howard Dean has also refused public financing, after discovering that he can do better by raising money through Internet appeals. Following Dean's lead, fellow Democratic candidate John Kerry was next to spurn public funds.

"If most serious presidential contenders go outside the public funding system, the program will continue to exist but only as a source of support for guaranteed losers," Samples writes. "Accepting public funding will become a sign that a candidate cannot win the presidency."

Samples continues: "Why should Americans throw more money at a program that has failed to meet its goals and has been rejected by taxpayers?" He concludes that Congress should not reform the system, but shut it down.