Campaign finance in the United States

Campaign finance in the United States is the financing of electoral campaigns at the federal, state, and local levels. At the federal level, campaign finance law is enacted by Congress and enforced by the Federal Election Commission (FEC), an independent federal agency. Although most campaign spending is privately financed, public financing is available for qualifying candidates for President of the United States during both the primaries and the general election. Eligibility requirements must be fulfilled to qualify for a government subsidy, and those that do accept government funding are usually subject to spending limits on money.

Races for non-federal offices are governed by state and local law. Over half the states allow some level of corporate and union contributions. Some states have limits on contributions from individuals that are lower than the national limits, while four states (Missouri, Oregon, Utah and Virginia) have no limits at all. This article deals primarily with campaigns for federal office.

Campaign finance numbers

In 2008, candidates for office, political parties, and independent groups spent a total of $5.3 billion on federal elections. The amount spent on the presidential race alone was $2.4 billion, and over $1 billion of that was spent by the campaigns of the two major candidates: Barack Obama spent $730 million in his election campaign, and John McCain spent $333 million. The total amount spent by Obama and McCain was a record at the time.

In the 2010 midterm election cycle, candidates for office, political parties, and independent groups spent a total of $3.6 billion on federal elections. The average winner of a seat in the House of Representatives spent $1.4 million on his or her campaign. The average winner of a Senate seat spent $9.8 million.

The money for campaigns for federal office comes from four broad categories of sources:

  1. Small individual contributors (individuals who contribute $200 or less)
  2. Large individual contributors (individuals who contribute more than $200)
  3. Political Action Committees (PAC)
  4. Self-financing (the candidate’s own money).

In the 2010 Congressional races, the sources of campaign contributions broke down as follows:

Small Individual Contributors : Large Individual Contributors : Political Action Committees : Self-Financing : Other

  • House Democrats : 9% : 47% : 38% : 3% : 3%
  • House Republicans : 14% : 48% : 24% : 12% : 3%
  • Senate Democrats : 11% : 54% : 15% : 12% : 8%
  • Senate Republicans : 18% : 42% : 12% : 20% : 8%

Sources of campaign funding

Federal contribution limits

Federal law restricts how much individuals and organizations may contribute to political campaigns, political parties, and other FEC-regulated organizations. Corporations and unions are banned from donating money directly to candidates (“hard money”) or national party committees.

 

Individual

  • Candidate Committee : $2,700 per election
  • PAC (SSF and Non-connected) : $5,000 per year
  • State/District/Local Party Committee :  $10,000 per year (combined)
  • National Party Committee :  $33,400 per year
  • Additional National Party Committee Account : $100,200 per account, per year

Candidate Committee

  • Candidate Committee : $2,000 per election
  • PAC (SSF and Non-connected) : $5,000per year
  • State/District/Local Party Committee : Unlimited Transfers
  • National Party Committee : Unlimited Transfers

PAC – Multicandidate

  • Candidate Committee :  $5,000 per election
  • PAC (SSF and Non-connected) : $5,000 per year
  • State/District/Local Party Committee :  $5,000 per year (combined)
  • National Party Committee :  $15,000 per year
  • Additional National Party Committee Account :  $45,000 per account, per year

PAC – Nonmulticandidate

  • Candidate Committee :  $2,700 per election
  • PAC (SSF and Non-connected) :  $5,000 per year
  • State/District/Local Party Committee :  $10,000 per year (combined)
  • National Party Committee :  $33,400 per year
  • Additional National Party Committee Account :  $100,200 per account, per year

State, District & Local Party Committee

  • Candidate Committee :  $5,000 per election
  • PAC (SSF and Non-connected) :  $5,000 per year
  • State/District/Local Party Committee :  Unlimited Transfers
  • National Party Committee :  Unlimited Transfers

National Party Committee

  • Candidate Committee :  $5,000 per election
  • PAC (SSF and Non-connected) :  $5,000 per year 
  • State/District/Local Party Committee :  Unlimited Transfers
  • National Party Committee :  Unlimited Transfers

Footnotes:

 

  1. PAC” here refers to a committee that makes contributions to other federal political committees. Independent-expenditure-only political committees (sometimes called “Super PACs”) may accept unlimited contributions, including from corporations and labor organizations.
  2. The limits in Additional National Party Committee Account apply to a national party committee’s accounts for: (i) the presidential nominating convention; (ii) election recounts and contests and other legal proceedings; and (iii) national party headquarters buildings. A party’s national committee, Senate campaign committee and House campaign committee are each considered separate national party committees with separate limits. Only a national party committee, not the parties’ national congressional campaign committees, may have an account for the presidential nominating convention.
  3. Additionally, a national party committee and its Senatorial campaign committee may contribute up to $46,800 combined per campaign to each Senate candidate.

Bundling

One consequence of the limitation upon personal contributions from any one individual is that campaigns seek out “bundlers”—people who can gather contributions from many individuals in an organization or community and present the sum to the campaign. Campaigns often recognize these bundlers with honorary titles and, in some cases, exclusive events featuring the candidate.

Although bundling existed in various forms since the enactment of the FECA, bundling became organized in a more structured way in the 2000s, spearheaded by the “Bush Pioneers” for George W. Bush‘s 2000 and 2004 presidential campaigns. During the 2008 campaign the six leading primary candidates (three Democratic, three Republican) had listed a total of nearly two thousand bundlers.

Lobbying

Lobbyists often assist congresspersons campaign finance by arranging fundraisers, assembling PACs, and seeking donations from other clients. Many lobbyists become campaign treasurers and fundraisers for congresspersons.

Hard and soft money

Contributions made directly to a specific candidate are called hard money and those made to parties and committees are called soft money. Soft money constitutes an alternative form of financing campaigns that emerged in the last years. It “derives from a major loophole in federal campaign financing and spending law that exempts from regulation those contributions made for party building in general rather than for specific candidates”. There are no limits on soft money and some examples are donations for stickers, posters, and television and radio spots supporting a particular party platform or idea but not a concrete candidate. For the amounts of soft money contributed in recent years and the legislation that enabled this, see the section on the Bipartisan Campaign Reform Act.

TBC

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