In the 1970s, the laws regulating federal election campaign financing in the United States underwent dramatic change. The Federal Election Campaign Act of 1971 (FECA), the Revenue Act of 1971, and the FECA Amendments of 1974, 1976 and 1979 thoroughly revised the rules of the game for political candidates, parties and contributors. In regard to presidential campaigns, the laws provided for public matching funds for qualified candidates in the pre-nomination period, public treasury grants to pay the costs of the two major parties' national nominating conventions, and public treasury grants for the major party general election candidates. They also established criteria whereby minor parties and new parties and their candidates could qualify for public funds to pay nominating convention and general election campaign costs.

The public funds were intended to help provide or to supply in entirety the money serious candidates need to present themselves and their ideas to the electorate. The public funds also were meant to diminish or to eliminate the need for money from wealthy donors and interest groups and thereby minimize opportunities for undue influence on officeholders by contributors. In the pre-nomination period, public funding was intended to make the nomination process more competitive and to encourage candidates to broaden their bases of support by seeking out large numbers of relatively small, matchable contributions.

The feasibility of public financing in presidential campaigns has depended on the taxpayers' willingness to earmark a small portion on their tax liabilities – $1 for individuals and $2 for married persons filing jointly – for the Presidential Election Campaign Fund by using the federal income tax checkoff.