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 Money—from 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.”