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House Democrats' H.R. 1 would create new public financing of congressional campaigns

March 9, 2021

House Democrats are on the verge of passing sweeping campaign finance and voting rights reforms that would establish a new public financing system for certain federal elections.

The For the People Act of 2021, known as H.R. 1, is expected to clear the Democratic-led House later Wednesday. It would provide public matching funds for qualifying congressional and presidential candidates at a rate of 6:1, among many other provisions.

The 6:1 match would kick in for each grassroots contribution to a candidate up to $200. For example, a $200 donation to a House candidate would garner a $1,200 match in public funds for a total contribution of $1,400.

The program would begin in the 2028 election cycle and would be voluntary. Candidates would opt in by meeting donation qualifications and would be subject to certain contribution limits. 

Backers of the bill say this small-dollar match program is the anecdote to getting big money and corporate interests out of elections and to allow candidates to focus on garnering support from their neighbors rather than catering to high-dollar donor fundraisers and special interests.

"I'm very fond of saying if we reduce the role of money in politics and increase the level of decency and civility, we will be able to elect many more women, many more people of color, many more young people into elective office," House Speaker Nancy Pelosi, D-Calif., said Tuesday. 

The public match program would be funded by a new 4.75% surcharge on criminal and civil penalties and settlements that corporations pay to the U.S. government. The nonpartisan Congressional Budget Office estimated this week the new revenue stream would generate about $3.2 billion over 10 years. 

The proceeds from these additional corporate settlement assessments would be deposited into a new "Freedom From Influence Fund" created under the legislation. This fund would bankroll the new small-dollar match program for congressional candidates, an enhanced 6:1 campaign finance match program for presidential candidates, and a new pilot program that would incentivize voters to make campaign donations.

The latter program, dubbed the My Voice Voucher Pilot Program, would be set up in three states and give voters vouchers worth $25 to donate to congressional candidates of their choice to encourage civic engagement. States would be reimbursed up to $10 million from the federal government for the voucher program. 

House Republicans have panned the H.R. 1 legislation as a massive expansion of the federal government's role in elections designed to pad politicians' campaign coffers. In debate on the House floor, Republicans alleged the legislation would create a new taxpayer-funded system of election financing, though the funding stream for the "Freedom From Influence Fund" is not general taxpayer dollars.

"This bill isn't for the people, it's for the politicians," said Rep. Rodney Davis, R-Ill.

Rep. August Pfluger, R-Texas, said the legislation would "fully cement the swamp."

"I'm particularly disturbed by the fact that if this bill passes, taxpayer dollars will be directly funneled to congressional candidates and campaigns," Pfluger said. "The folks in my district ... absolutely do not approve of their hard-earned dollars paying for TV attack ads of any candidate, much less candidates they don't support."

However, the legislation doesn't authorize new general taxpayer dollars for the public financing of elections, but rather is limited to the new assessments applied to criminal and civil penalties on corporations and high-income tax scofflaws that are found guilty of a crime by the federal government.

Companies that have paid such settlements in past include Facebook, Volkswagen and BP, according to a report from the Brennan Center for Justice. 

"Let's be very clear, there is no public funding – use of taxpayer money – for congressional races in this legislation no matter what you hear someone else [say]," Pelosi said. 

The Congressional Budget Office estimated that the small-dollar match program for congressional candidates would cost $1.6 billion over 10 years, the presidential candidate match program would cost $905 million, and the new $25 pilot voucher program would cost $60 million. Overall the legislation would not deepen the national debt, but rather reduce the deficit by nearly $1 billion over a decade, the CBO found.

The House bill establishes the "Freedom from Influence Fund" for public election financing only for House and presidential candidates. The Senate version of the bill, known as S.1, would add Senate candidates as well to the 6:1 small-donor matching program.

Other provisions of H.R. 1 include automatic voter registration, expanding vote-by-mail and early voting, giving felons the right to vote after serving their sentence, and limiting the removal of names from voter rolls.

The legislation seeks to end partisan gerrymandering by requiring states to establish independent redistricting commissions. It would change the structure of the Federal Election Commission (FEC) by having an odd number of commissioners in an effort to break partisan gridlock in enforcing campaign finance violations. 

And H.R. 1 would also take aim at big-dollar donors and dark money in politics by requiring additional disclosure of campaign donors and disclaimers on political advertising.

House Majority Leader Steny Hoyer, D-Md., acknowledged that Democrats are looking for generational changes in how elections are operated. 

"H.R. 1 would be the most consequential piece of voting rights legislation enacted since we passed the Help America Vote Act [in 2002]," Hoyer said Tuesday.