By SARAH DORSEY
Observer Contributor
April 16, 2008

Chances are you checked “no” on April 15 when given the option on your tax return to divert $3 of your taxes to the Presidential Election Campaign Fund.

About 91 percent of Americans did in 2007 – even though checking “yes” wouldn’t have cost them a dime.

Graphic courtesy of Internal Revenue Service

It wasn’t always so. At the height of public participation in the late ’70s and early ’80s, almost one third of Americans chose to divert some of their tax money to fund the presidential election.

Since then, participation has steadily declined.

“It seems there is more than enough money in politics, particularly the presidential campaign,” said Roger Hunter, a taxpayer who responded to a question about the check-off on craigslist.org. “So my $3 shouldn’t make much of a difference.”

The idea behind the campaign fund was to take some of that special interest money out of politics. Congress created the fund in 1971, and strengthened it shortly thereafter, when campaign money began appearing in the bank accounts of Watergate burglars.

The fund works by giving a fixed amount to each of the Democratic and Republican nominees in the general presidential election, and matching funds to their candidates in the primaries when they get donations under $250. Third-party candidates can receive a proportionally smaller amount of federal funds – but only if their party received at least 5 percent of the vote in the previous presidential cycle. (If that rings familiar, Ralph Nader’s supporters in 2000 were hoping to push the Green Party over that 5 percent limit, ultimately getting only about halfway to the goal).

The idea for the fund first surfaced in the Progressive Era – Teddy Roosevelt declared that public money would fight corruption in government. But before it finally passed in 1971, the bill faced some tough Republican opposition, including a Nixon veto threat. Crucial to its success was the fact that the fund was voluntary. Candidates can choose to take the money and agree to spending limits, or they can turn it down and raise as much as they can.

But even with no commitment required – on their part, or on that of the candidates – most taxpayers remain unconvinced.

“I can speculate as to why people don’t check off the box [on their tax return],” said Bob Stern, president of the Center for Governmental Studies, a nonpartisan nonprofit based in Los Angeles. “I think a lot of it is lack of confidence in government. People don’t like politics and don’t want to pay for it.”

Stern and other experts also cited the lack of public education about the fund, the proliferation of online tax software that automatically checks the “no” box and professional tax preparers who do the same. And, Stern said, it doesn’t help that taxpayers can see that more and more candidates aren’t accepting the money.

“The current system doesn’t provide candidates with enough money to compete with those that don’t accept the funds,” said Taylor Lincoln, research director of the Congress Watch division at Public Citizen, a nonprofit group that advocates public finance reform. “It’s like having to build a race car on $10,000 when your opponent has $1 million.”

Presidential candidates generally accepted public funds until 2000, when George W. Bush turned them down in the primaries. Since then, no major candidate has accepted the funds in the primaries, not even those who have defined their careers as champions of campaign finance reform, such as Sen. John McCain, R-Ariz.

And worse still for the public system, this may be the first year since the 1970s that neither major party candidate accepts federal funds in the general election. On Friday, Sen. Barack Obama, D-Ill., who according to the Associated Press has raised $234 million so far from 1.3 million donors, much of it in small donations, called the $3 checkoff system “creaky” and said it needed to be overhauled. Obama said he has not yet made a decision whether to use public funds, raising speculation that he will back off his earlier pledge to accept the money. Obama would be eligible for about $84 million in November’s election.

McCain, on the other hand, has already taken steps to accept the funds, although if Obama opts out, he said he will “examine” the issue, according to the New York Times. Sen. Hillary Clinton, D-N.Y., told voters in January 2007 that she would use private financing.

That development had prominent news outlets such as the New York Times tolling the bell for the imminent death of the public financing system.

So what would campaigns look like if candidates started relying on private money alone?

“Presidential elections in this country are financed largely by a small group of mostly wealthy individuals,” said Massie Ritsch, communications director for the Center for Responsive Politics, a nonpartisan research group that studies campaign finance. “It’s these donors who decide with their wallets which candidates the rest of America can vote for.”

Ritsch was circumspect in his phrasing: the fact that the majority of donors are wealthy, he said, possibly excludes candidates whose messages appeal to a lower-income population.

But while the future of federal campaign funding looks unclear, some states are increasingly being seen as models of public financing.

One of the most successful systems was instituted in Maine in 1996. It’s voluntary, and candidates qualify by raising a certain number of $5 contributions, so you don’t need wealthy backers to be in the running.

“Eighty-four percent of the sitting legislators [in Maine] were elected through public financing,” said Ann Luther, co-chair of Maine Citizens for Clean Elections, a nonprofit dedicated to reducing the influence of wealthy special interests in politics.

“State house insiders say public financing has really changed the culture,” said Luther. “Those who use it … say they can spend more time campaigning and less time fundraising. They say it frees them to vote their conscience and frees them from special interests.”

But Mal Leary, a reporter at the Capitol News Service in Augusta, said while state legislators are largely satisfied with the program, the gubernatorial program still has some bugs to work out. Since public financing was instituted, every winning candidate for governor has used private funds.

Then there are groups who see any public financing – even voluntary programs – as an abridgment of free speech. The National Center for Policy Analysis, a nonprofit organization that promotes private alternatives to government regulation, advocates against all public financing.

One of their recent reports argued that public financing favors incumbents. Challengers are at such a disadvantage politically, the argument goes, that they must outspend their opponents if they hope to beat them.

Sen. Mitch McConnell, R-Ky., is a longtime opponent of public financing. McConnell considers the low participation rate a referendum against the program. And he says politicians don’t deserve it.

“Taxpayers who check ‘yes’ are actually diverting millions from the Treasury to an entitlement program for politicians,” said McConnell.

Others argue that public funding is the only way most challengers have even a hope of approaching the fundraising abilities of incumbents.

“It should be an appropriation,” said Bob Stern, president of the Center for Governmental Studies, a nonpartisan organization that studies campaign finance reform.

Congress felt they had to pass some sort of campaign finance law, Stern said, but they were reluctant to do so. So they made the program voluntary, hoping it would be under-funded.

“It was a compromise,” he said. “Congress didn’t want to pass it. They were hoping it would just go away.”

According to Stern, it’s no surprise that only nine percent of taxpayers checked “yes” on their tax returns last year. Many other unpopular expenditures are made every year. Politicians know that if they want something funded, they’ll have to appropriate the money.

“If you were to ask the public, ’should we spend 1 trillion of our dollars on the war in Iraq,’ how much support would you get?” he said. “Fifteen percent?”