[House Report 113-291]
[From the U.S. Government Publishing Office]
113th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 113-291
======================================================================
TO AMEND THE INTERNAL REVENUE CODE OF 1986 TO PROHIBIT THE USE OF
PUBLIC FUNDS FOR POLITICAL PARTY CONVENTIONS
_______
December 12, 2013.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mrs. Miller of Michigan, from the Committee on House Administration,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 94]
[Including cost estimate of the Congressional Budget Office]
The Committee on House Administration, to whom was referred
the bill (H.R. 94) to amend the Internal Revenue Code of 1986
to prohibit the use of public funds for political party
conventions, having considered the same, report favorably
thereon without amendment and recommend that the bill do pass.
Background and Need for the Legislation
The Presidential Election Campaign Fund, established by
Congress, was first used in the Presidential campaign of 1976.
It provides taxpayer support for presidential campaigns in
three forms: payments to candidates in primary elections to
match qualifying individual donations, fixed grants to
candidates in general elections who agree to forego individual
donations and fixed grants to major parties to fund
presidential nominating conventions.
The PECF is financed by allowing taxpayers to check a box
on their tax returns designating an amount for the Fund. The
amount was originally set at $1 per individual and subsequently
increased to $3 per individual. If the taxpayer checks the box,
that amount of their individual tax liability is directed to
PECF. Checking the box does not change the amount of tax paid,
so the PECF reduces Treasury funds available for other
purposes.
The number of taxpayers who indicated their support for
taxpayer financial of presidential campaigns by checking the
box to divert funds to PECF peaked in 1980 at 28.7 percent. It
has declined consistently since then, to 5.1 percent in 2012.
Support for the PECF by candidates also has declined. In 2000
major candidates began rejecting the PECF matching funds during
the primary campaign in order to avoid the restrictions that
accompanied them. In 2008 then-candidate Obama rejected PECF
funds in the primary election and also became the first major
party candidate to reject the general election grant. In 2012
only three candidates (Gary Johnson, Buddy Roemer and Jill
Stein) applied for PECF funds. Neither major party candidate
accepted the PECF grant in the general election.
With the decline in candidate participation to nearly zero,
the remaining use of the PECF is to provide grants to major
party's to conduct their presidential nominating conventions.
In 2012 each major party received approximately $18 million for
its convention. In addition to the $36 million total from PECF,
the parties raised approximately $80 million in private funds.
Reports prepared by Senator Coburn using records from the
Federal Election Commission showed that the conventions held in
2008 spent over $2 million for travel expenses, almost as much
for catering and over $6 million for salaries. The reports also
show payments for gift bags, flowers and entertainment. At a
time when budgets are being cut in important programs across
the federal government, diverting taxpayer resources to these
costs is not appropriate.
During the consideration of H.R. 94, Representative Brady
offered an amendment that would repeal the taxpayer financing
of party nominating conventions and allow parties to raise
funds for conventions and other purposes in a separate account
subject to the limitations on sources and amounts that
currently apply to the parties. Representative Brady withdrew
the amendment and the Chairman agreed to work with him to seek
agreement on legislative language. No agreement has been
achieved but additional discussions on the approach embodied in
Representative Brady's amendment may occur prior to the bill
being considered by the House.
Introduction and Referral
On January 3, 2013, Congressman Tom Cole of Oklahoma
introduced H.R. 94, which was referred to the Committee on
House Administration.
Hearings
There were no legislative hearings held on H.R. 94.
Committee Consideration
On June 4, 2013, the Committee on House Administration met
to consider H.R. 94. The Committee ordered the bill reported
favorably to the House without amendment by voice vote with a
quorum present.
Committee Record Votes
In compliance with House Rule XIII, clause 3(b), requiring
the results of each record vote on an amendment or motion to
report, together with the names of those voting for and
against, to be printed in the Committee report, the Committee
states that there were no record votes during the Committee's
consideration of H.R. 94.
Committee Oversight Findings and Recommendations
In compliance with House Rule XIII, clause 3(c)(1), the
Committee states that the findings and recommendations of the
Committee, based on oversight activities under House rule X,
clause 2(b)(1), are incorporated into the general discussion
section of this report.
Statement of Budget Authority and Related Items
The bill does not provide new budget authority, new
spending authority, new credit authority, or an increase or
decrease in revenues or tax expenditures and a statement under
House Rule XIII, clause 3(c)(2), and section 308(a)(1) of the
Congressional Budget Act of 1974 is not required.
Congressional Budget Office Cost Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
June 26, 2013.
Hon. Candice Miller,
Chairman, Committee on House Administration,
House of Representatives, Washington, DC.
Dear Madam Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 94, a bill to
amend the Internal Revenue Code of 1986 to prohibit the use of
public funds for political party conventions.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Maggie
Morrissey and Matthew Pickford.
Sincerely,
Douglas W. Elmendorf.
Enclosure.
H.R. 94--A bill to amend the Internal Revenue Code of 1986 to prohibit
the use of public funds for political party conventions
Summary: H.R. 94 would amend federal law to prohibit the
use of public funds for political campaign conventions. By
eliminating that option, CBO estimates that enacting H.R. 94
would reduce direct spending by $126 million over the 2014-2023
period. In addition, the legislation would affect direct
spending and federal penalties related to campaign financing
(some of which are recorded in the budget as revenues and are
available to be spent without further appropriation); CBO
estimates, however, that any such effects would not be
significant. Because the bill would affect direct spending and
revenues, pay-as-you-go procedures apply. The staff of the
Joint Committee on Taxation (JCT) estimates that enacting the
legislation would have no impact on federal income tax
revenues.
JCT has determined that H.R. 94 contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 94 is shown in the following table.
The costs of this legislation fall within budget function 800
(general government).
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------------------------------------------
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014-2018 2014-2023
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING
Estimated Budget Authority........................ 0 0 0 0 0 0 0 0 0 0 0 0
Estimated Outlays................................. 0 -40 0 0 0 -42 0 0 0 -44 -40 -126
--------------------------------------------------------------------------------------------------------------------------------------------------------
Basis of estimate: For this estimate, CBO assumes that the
legislation will be enacted before the end of 2013. We estimate
that enacting the bill would reduce direct spending but would
have no significant effect on revenues (including penalties).
The Presidential Election Campaign Fund (PECF) provides
money for Presidential election campaigns including political
party conventions. The fund is financed by taxpayers who
voluntarily designate on their income tax returns that a
portion of their annual tax liability ($3 for individual income
tax filers and $6 for joint returns) be credited to the PECF.
The voluntary earmarking of a portion of a taxpayer's liability
does not affect the amount of tax owed to the federal
government or the amount of any refund owed to that taxpayer.
Use of the fund has gradually diminished in recent years along
with the amounts credited to the fund. In 2012, $35 million was
credited to the fund and during the most recent Presidential
campaign, spending from the PECF totaled $36 million for
political conventions organized by the two major political
parties. In addition, the two major party candidates did not
accept public funding for their campaigns and other candidates
received a little more than $1 million for their campaigns.
CBO estimates that eliminating the use of the PECF to fund
political campaign conventions would reduce direct spending by
$126 million over the 2014-2023 period. That estimate is based
on PECF spending on political conventions over the last two
Presidential election cycles.
Reducing the use of the PECF could reduce the
administrative costs that the Federal Election Commission
incurs to oversee the use of amounts drawn from that fund
during Presidential election campaign cycles. However, because
of the diminished use of the funds in recent years, CBO expects
any such savings would be insignificant.
Enacting H.R. 94 could affect federal revenues by
decreasing the collection of fines for violating campaign
finance law. Such collections are recorded in the budget as
revenues and, in certain cases, such amounts may be spent
without further appropriation. CBO estimates that any net
changes in revenues and associated direct spending would be
insignificant because of the small number of possible
violations.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The changes in outlays that are subject to those pay-
as-you-go procedures are shown in the following table. Enacting
the legislation would have no significant effect on revenues
(including penalties).
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 94, AS ORDERED REPORTED BY THE COMMITTEE ON HOUSE ADMINISTRATION ON JUNE 4, 2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------------------------------------------
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013-2018 2013-2023
--------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE OR DECREASE (-) IN THE [ON-BUDGET] DEFICIT
Statutory Pay-As-You-Go Impact.................... 0 0 -40 0 0 0 -42 0 0 0 -44 -40 -126
--------------------------------------------------------------------------------------------------------------------------------------------------------
Intergovernmental and private-sector impact: H.R. 94
contains no intergovernmental or private-sector mandates as
defined in UMRA.
Previous CBO estimate: On June 21, 2013, CBO transmitted a
cost estimate for H.R. 95, a bill to reduce federal spending
and the deficit by terminating taxpayer financing of
Presidential election campaigns and party conventions, as
ordered reported by the Committee on House Administration on
June 4, 2013. On May 13, 2013, CBO transmitted a cost estimate
for H.R. 2019, the Kids First Research Act of 2013, as
introduced on May 16, 2013. The three bills would affect the
Presidential Election Campaign Fund. H.R. 95 and H.R. 2019 have
identical provisions that would eliminate the PECF, while under
H.R. 94, spending for presidential party conventions would end
but other spending could continue. Those differences are
reflected in the CBO cost estimates.
Estimate prepared by: Federal Spending: Maggie Morrissey
and Matthew Pickford; Intergovernmental and Private-Sector
Mandates: Joint Committee on Taxation.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.
Performance Goals and Objectives
In compliance with House Rule XIII, clause 3(c)(4), the
Committee states that the general discussion section of this
report includes a statement of the general performance goals
and objectives, including outcome-related goals and objectives,
for which H.R. 94 authorizes funding.
Constitutional Authority Statement
Congress has the power to enact this legislation pursuant
to Amendment XVI of the U.S. Constitution relating to the
collection of income tax and additionally to Article I, Section
4 of the U.S. Constitution granting Congress the authority to
make laws governing the time, place and manner of holding
Federal elections.
Advisory on Earmarks
In accordance with House Rule XXI, clause 9, the Committee
states that H.R. 94 does not contain any congressional
earmarks, limited tax benefits, or limited tariff benefits as
defined in clause 9(e), 9(f), or 9(g) of rule XXI.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
INTERNAL REVENUE CODE OF 1986
* * * * * * *
Subtitle H--Financing of Presidential Election Campaigns
* * * * * * *
CHAPTER 95--PRESIDENTIAL ELECTION CAMPAIGN FUND
* * * * * * *
[Sec. 9008. Payments for presidential nominating conventions.]
* * * * * * *
SEC. 9006. PAYMENTS TO ELIGIBLE CANDIDATES.
(a) * * *
* * * * * * *
(c) Insufficient Amounts in Fund.--If at the time of a
certification by the Commission under section 9005 for payment
to the eligible candidates of a political party, the Secretary
determines that the moneys in the fund are not, or may not be,
sufficient to satisfy the full entitlements of the eligible
candidates of all political parties, he shall withhold from
such payment such amount as he determines to be necessary to
assure that the eligible candidates of each political party
will receive their pro rata share of their full entitlement.
Amounts withheld by reason of the preceding sentence shall be
paid when the Secretary determines that there are sufficient
moneys in the fund to pay such amounts, or portions thereof, to
all eligible candidates from whom amounts have been withheld,
but, if there are not sufficient moneys in the fund to satisfy
the full entitlement of the eligible candidates of all
political parties, the amounts so withheld shall be paid in
such manner that the eligible candidates of each political
party receive their pro rata share of their full entitlement.
In any case in which the Secretary determines that there are
insufficient moneys in the fund to make payments under
subsection (b)[, section 9008(b)(3),] and section 9037(b),
moneys shall not be made available from any other source for
the purpose of making such payments.
* * * * * * *
[SEC. 9008. PAYMENTS FOR PRESIDENTIAL NOMINATING CONVENTIONS.
[(a) Establishment of Accounts.--The Secretary shall maintain
in the fund, in addition to any account which he maintains
under section 9006(a), a separate account for the national
committee of each major party and minor party. The Secretary
shall deposit in each such account an amount equal to the
amount which each such committee may receive under subsection
(b). Such deposits shall be drawn from amounts designated by
individuals under section 6096 and shall be made before any
transfer is made to any account for any eligible candidate
under section 9006(a).
[(b) Entitlement to Payments from the Fund.--
[(1) Major parties.--Subject to the provisions of
this section, the national committee of a major party
shall be entitled to payments under paragraph (3), with
respect to any presidential nominating convention, in
amounts which, in the aggregate, shall not exceed
$4,000,000.
[(2) Minor parties.--Subject to the provisions of
this section, the national committee of a minor party
shall be entitled to payments under paragraph (3), with
respect to any presidential nominating convention, in
amounts which, in the aggregate, shall not exceed an
amount which bears the same ratio to the amount the
national committee of a major party is entitled to
receive under paragraph (1) as the number of popular
votes received by the candidate for President of the
minor party, as such candidate, in the preceding
presidential election bears to the average number of
popular votes received by the candidates for President
of the United States of the major parties in the
preceding presidential election.
[(3) Payments.--Upon receipt of certification from
the Commission under subsection (g), the Secretary
shall make payments from the appropriate account
maintained under subsection (a) to the national
committee of a major party or minor party which elects
to receive its entitlement under this subsection. Such
payments shall be available for use by such committee
in accordance with the provisions of subsection (c).
[(4) Limitation.--Payments to the national committee
of a major party or minor party under this subsection,
from the account designated for such committee shall be
limited to the amounts in such account at the time of
payment.
[(5) Adjustment of entitlements.--The entitlements
established by this subsection shall be adjusted in the
same manner as expenditure limitations established by
section 315(b) and section 315(d) of the Federal
Election Campaign Act of 1971 are adjusted pursuant to
the provisions of section 315(c) of such Act.
[(c) Use of Funds.--No part of any payment made under
subsection (b) shall be used to defray the expenses of any
candidate or delegate who is participating in any presidential
nominating convention. Such payments shall be used only--
[(1) to defray expenses incurred with respect to a
presidential nominating convention (including the
payment of deposits) by or on behalf of the national
committee receiving such payments; or
[(2) to repay loans the proceeds of which were used
to defray such expenses, or otherwise to restore funds
(other than contributions to defray such expenses
received by such committee) used to defray such
expenses.
[(d) Limitation of Expenditures.--
[(1) Major parties.--Except as provided by paragraph
(3), the national committee of a major party may not
make expenditures with respect to a presidential
nominating convention which, in the aggregate, exceed
the amount of payments to which such committee is
entitled under subsection (b)(1).
[(2) Minor parties.--Except as provided by paragraph
(3), the national committee of a minor party may not
make expenditures with respect to a presidential
nominating convention which, in the aggregate, exceed
the amount of the entitlement of the national committee
of a major party under subsection (b)(1).
[(3) Exception.--The Commission may authorize the
national committee of a major party or minor party to
make expenditures which, in the aggregate, exceed the
limitation established by paragraph (1) or paragraph
(2) of this subsection. Such authorization shall be
based upon a determination by the Commission that, due
to extraordinary and unforeseen circumstances, such
expenditures are necessary to assure the effective
operation of the presidential nominating convention by
such committee.
[(4) Provision of legal or accounting services.--For
purposes of this section, the payment, by any person
other than the national committee of a political party
(unless the person paying for such services is a person
other than the regular employer of the individual
rendering such services) of compensation to any
individual for legal or accounting services rendered to
or on behalf of the national committee of a political
party shall not be treated as an expenditure made by or
on behalf of such committee with respect to its
limitations on presidential nominating convention
expenses.
[(e) Availability of Payments.--The national committee of a
major party or minor party may receive payments under
subsection (b)(3) beginning on July 1 of the calendar year
immediately preceding the calendar year in which a presidential
nominating convention of the political party involved is held.
[(f) Transfer to the Fund.--If, after the close of a
presidential nominating convention and after the national
committee of the political party involved has been paid the
amount which it is entitled to receive under this section,
there are moneys remaining in the account of such national
committee, the Secretary shall transfer the moneys so remaining
to the fund.
[(g) Certification by Commission.--Any major party or minor
party may file a statement with the Commission in such form and
manner and at such times as it may require, designating the
national committee of such party. Such statement shall include
the information required by section 303(b) of the Federal
Election Campaign Act of 1971, together with such additional
information as the Commission may require. Upon receipt of a
statement filed under the preceding sentences, the Commission
promptly shall verify such statement according to such
procedures and criteria as it may establish and shall certify
to the Secretary for payment in full to any such committee of
amounts to which such committee may be entitled under
subsection (b). Such certifications shall be subject to an
examination and audit which the Commission shall conduct no
later than December 31, of the calendar year in which the
presidential nominating convention involved is held.
[(h) Repayments.--The Commission shall have the same
authority to require repayments from the national committee of
a major party or a minor party as it has with respect to
repayments from any eligible candidate under section 9007(b).
The provisions of section 9007(c) and section 9007(d) shall
apply with respect to any repayment required by the Commission
under this subsection.]
SEC. 9009. REPORTS TO CONGRESS; REGULATIONS.
(a) Reports.--The Commission shall, as soon as practicable
after each presidential election, submit a full report to the
Senate and House of Representatives setting forth--
(1) * * *
(2) the amounts certified by it under section 9005
for payment to the eligible candidates of each
political party; and
(3) the amount of payments, if any, required from
such candidates under section 9007, and the reasons for
each payment required[; and].
[(4) the expenses incurred by the national committee
of a major party or minor party with respect to a
presidential nominating convention;
[(5) the amounts certified by it under section
9008(g) for payment to each such committee; and
[(6) the amount of payments, if any, required from
such committees under section 9008(h), and the reasons
for each such payment.]
Each report submitted pursuant to this section shall be printed
as a Senate document.
* * * * * * *
SEC. 9012. CRIMINAL PENALTIES.
(a) Excess Expenses.--
(1) It shall be unlawful for an eligible candidate of
a political party for President and Vice President in a
presidential election or any of his authorized
committees knowingly and willfully to incur qualified
campaign expenses in excess of the aggregate payments
to which the eligible candidates of a major party are
entitled under section 9004 with respect to such
election. [It shall be unlawful for the national
committee of a major party or minor party knowingly and
willfully to incur expenses with respect to a
presidential nominating convention in excess of the
expenditure limitation applicable with respect to such
committee under section 9008(d), unless the incurring
of such expenses is authorized by the Commission under
section 9008(d)(3).]
* * * * * * *
(c) Unlawful Use of Payments.--
(1) * * *
[(2) It shall be unlawful for the national committee
of a major party or minor party which receives any
payment under section 9008(b)(3) to use, or authorize
the use of, such payment for any purpose other than a
purpose authorized by section 9008(c).]
[(3)] (2) Any person who violates paragraph (1) shall
be fined not more than $10,000, or imprisoned not more
than five years, or both.
* * * * * * *
CHAPTER 96--PRESIDENTIAL PRIMARY MATCHING PAYMENT ACCOUNT
* * * * * * *
SEC. 9037. PAYMENTS TO ELIGIBLE CANDIDATES.
(a) Establishment of Account.--The Secretary shall maintain
in the Presidential Election Campaign Fund established by
section 9006(a), in addition to any account which he maintains
under such section, a separate account to be known as the
Presidential Primary Matching Payment Account. The Secretary
shall deposit into the matching payment account, for use by the
candidate of any political party who is eligible to receive
payments under section 9033, the amount available after the
Secretary determines that amounts for payments under section
9006(c) [and for payments under section 9008(b)(3)] are
available for such payments.
* * * * * * *
MINORITY VIEWS
Starting in 1976, both major parties have used public
funding to finance their nominating conventions since the
creation of the Presidential Election Campaign Fund (PECF). In
2012, the Democratic and Republican convention committees each
received approximately $18 million of public funding for their
respective nominating conventions.
The money used for these grants is withdrawn from the
Presidential Election Campaign Fund, which in turn is funded by
taxpayers who voluntarily elect to contribute $3.00. Electing
to make this contribution has no effect on either a taxpayer's
tax liability or on their refund amount. The entirety of the
PECF balance is donated voluntarily.
I oppose H.R. 94 in its current form. I believe that using
federal funds to underwrite nominating conventions is not the
best use of this money but also recognize that taxpayers are
fully aware of what it is they are subsidizing, as the system
is voluntary. In keeping with the spirit of those that would
still like to contribute to convention funding, I offered an
amendment to this bill at the mark-up that would prohibit
public funding of nominating conventions while creating a
vehicle by which citizens can still contribute. The amendment
also banned the use of so-called ``soft money'' contributions
by special interests to convention committees.
I withdrew the amendment at the request of the Chairman
upon her offer to work out a legislative fix to accomplish the
amendment's goal before the bill receives floor consideration.
Robert A. Brady.