Money and Campaigns

1
Money and Campaigns
2
Nature of Modern Campaigns

• Most electoral contests are similar in a number
  of ways.
• Nomination campaign aimed at winning primary.
• General election campaign aimed at winning final
  race.

3
Cost of Campaigns

• In 2008, Obama and McCain raised and spent more
  than 1 billion in their race for the White House
• The average winning candidate in the House of
  Representative now spends 1.4 million the
  average winning candidate in the Senate over 9
  million (exceptions Hillary Clinton of New York
  41 million Rick Santorum of Pennsylvania 28
  million)
• Its costs money to raise funds Bush spent 1 for
  every 4.5 raised in 2004

4
Money and Campaigning

• The Maze of Campaign Finance Reforms
• Federal Election Campaign Act (1974)
• Created the Federal Election Commission (FEC) to
  administer campaign finance laws for federal
  elections
• Provided public financing for presidential
  primaries and general elections (sufficient
  contributions in at least 20 states)
• Limited Presidential Campaign spending
• Limited Contributions (Individuals 1000 PACs
  5,000)
• Required disclosure
• Filing of periodic reports with the FEC
• Moneyfrom whom? How much was spent? For what?

5
Loopholes in 1974 FECA

• Soft money
• Independent expenditures
• bundling

6
Money and Campaigning

• The Maze of Campaign Finance Reforms
• Soft Money political contributions (not subject
  to contribution limits) earmarked for
  party-building expenses or generic party
  advertising
• Hard Money funds that are raised subject to
  federal campaign contributions and expenditure
  limitations
• The McCain-Feingold Act (2002) banned soft money,
  increased amount of individual contributions, and
  introduced restrictions on political advertising
  close to an election

7
Bipartisan Campaign Reform Act

• Passed in 2002 to update FECA of 1974.
• Does not regulate use of personal money.
• Outlaws use of soft money.
• New limits on individual and political action
  committee funds.
• Independent expenditures Individuals, PACs, and
  Parties may spend unlimited amount of money
  directly advocating the election or defeat of a
  candidate as long as expenditures are not
  coordinated with campaign.

8
Money and Campaigning

• The Proliferation of PACs
• Political Action Committees (PACs) created by
  law in 1974 to allow corporations, labor unions
  and other interest groups to donate money to
  campaigns PACs are registered with and monitored
  by the FEC.
• As of 2006 there were 4,217 PACs.
• PACs contributed over 372.1 million to
  congressional candidates in 2006.
• PACs donate to candidates who support their
  issue.
• PACs do not buy candidates, but give to
  candidates who support them in the first place.

9
The 527 Loophole Result of BCRA

• 527s independent groups that seek to influence
  political process but are not subject to
  contribution restricts because they do not
  directly seek election of particular candidates
• Advocacy may only be paid for with hard money.
• Soft money is banned under BCRA.
• Cannot advocate for candidates, only causes and
  policy.

10
AV- 527 Groups
Back
11
PACs and Their Conributions
12
Money and Campaigning

• Are Campaigns Too Expensive?
• Fundraising takes a lot of time.
• Incumbents do worse when they spend more money
  because they need to spend to defeat quality
  challengers.
• The doctrine of sufficiency suggests that
  candidates need just enough money to win, not
  necessarily more.