CCP calls for Senate to repeal failed tax financing program

The Center for Competitive Politics (CCP) urged U.S. Senators to support a bill to scrap the presidential tax financing system, a subsidy program for politicians that taxpayers have increasingly abandoned.

The House voted to abolish the program in late January on a bipartisan 239-160 vote. Senate Minority Leader Mitch McConnell promptly introduced a companion bill in the Senate. Majority Leader Harry Reid has indicated that he will block a vote on bill. However, opponents of tax financing could attach the repeal language to another Senate bill under consideration.

“The American people deserve an up-or-down vote on this flawed subsidy scheme,” said Center for Competitive Politics President Sean Parnell. “Barely seven percent of taxpayers volunteer a portion of their tax return to this program. Virtually the only people that will miss it are Washington insiders disappointed that the taxpayer-funded open bar at party conventions will run dry.”

Supporters of the program raise the specter of Watergate and warn that good government cannot survive without tax subsidies of presidential campaigns. But opponents struggle to explain how democracy survived after President Obama rejected taxpayer subsidies in 2008 and accumulated a record-breaking $745 million warchest. Furthermore, survey after survey reveals the failure of the tax financing system to restore voter confidence in government.

The program was actually created by President Richard Nixon; it expanded after the Watergate scandal as pro-regulation lobbyists capitalized on the opportunity.

“Since the 1970s, the ‘reform’ lobby has spouted platitudes about how the program has ‘served the nation well,’ but they offer no evidence of that besides the number of candidates who have taken taxpayer money to run their campaigns,” said CCP Chairman Bradley A. Smith, a former FEC Chairman.

Since the program’s inception, taxpayers have funded the campaigns of former Sen. Alan Cranston, of Keating Five infamy; ex- Gov. Milton Schapp, later convicted of fraud; gadfly Lyndon LaRouche, who ran several tax funded campaigns, one from a prison cell, at a total cost of more than $5.5 million; and various other fringe candidates.

A Congressional Budget Office report estimated that eliminating the program would save $617 million over the next ten years. American taxpayers have recognized the program’s waste, reducing the tax check-offs that fund it from 28.7% in 1980 to 7.3% in 2009. In an age of budget austerity, this wasteful program could fund the combined budgets of the Corporation for Public Broadcasting, the Federal Election Commission and the Consumer Product Safety Commission.

Diehard defenders of the status quo concede the program’s failure, yet somehow insist that tripling or quadrupling the funds—throwing good money after bad—is the solution. One prominent lobbyist for the program, Democracy21’s Fred Wertheimer, called for a government propaganda campaign to prop up the system: “To improve participation in the check-off, an education campaign is needed on the check-off,” he said.

The Center for Competitive Politics is a nonpartisan, nonprofit group dedicated to protecting First Amendment political rights. CCP seeks to promote the political marketplace of ideas through research, litigation and advocacy.