Money and Elections

Chapter 7

Section 3

Key Terms

Political Action Committee (PAC)SubsidyHard MoneySoft Money

Campaign Spending

There are 500,000 elective offices in the United States

Presidential election s consume the largest share of campaign dollars

In 2008, $2.5 billion was spent for all major and minor party presidential efforts Caucuses and primaries, conventions, general

elections and campaigns

Spending has doubled in the last decadeCandidate must raise and spend 1 million

dollars for a House seatSenate campaigns spent 20 times that

amount1.5 billion was spent on House and Senate

contests in 2008

RadioTelevisionConsultantsNewspapersOffice rent PollsWeb sites

ButtonsPostersBumper stickersData processingMass mailingsWeb sites Travel

How much is spent depends on Office involved Candidate (incumbent or challenger) Nature of opposition Availability of campaign funds

Sources of Funding

Private and Public Sources Small contributors $5 to $10 dollars

Only 10 percent of voting age people contribute Wealthy individuals and families

“Fat cats” who make large donations in their best interest

Candidates Incumbents, challengers People who want tom hold appointive public offices

Various nonparty groups Political Action Committees (PAC)- are

political arms of special interest groups with a stake in the Election

Temporary organizations Groups formed for the immediate purpose of

the campaign Hundreds of these are short lived Hold luncheons, dinners, receptions for a fee Some reach the $100,000 level

The Internet State treasuries

Subsidy- is a grant of money usually from a government

Subsidies have been more important at the presidential level

Some state provide some form of public funding for parties and/or candidacies

Why people give They are a form of political participation Some make small donations because they

believe in the candidate Many want something in return Want access to government (friends)

Regulating Finance First began in 1907

Became unlawful for any corporation or bank to make money contributions

Congress has passed several laws regulating money in campaigns

1974 response to Watergate scandal 2002 closed the “soft money” loophole

Congress can not regulate use of money in state and local elections

Every state regulates campaign finance

Federal Election Commission

Set up in 1974Handles all federal law dealing with

campaign financeIndependent agency in the executive

branchLaws are not well enforced

Agency is underfunded and understaffed

Congress has made it almost impossible for them to do their job

FEC laws cover four areas Require the timely disclosure of campaign

finance data Place limits on campaign contributions Place limits on campaign expenditures Provide public funding for several parts of the

presidential election process

Disclosure Requirements Started reporting in 1910 Intended to spotlight the place of money in a

federal campaign No one can make a gift in the name of another Cash gifts over $100.00 are prohibited All contributions must be made through a single

campaign committee

Any spending over $200.00 must be identified by name of the person or the firm who made it.

Any contribution of over $5,000.00 must be reported to the FEC

Any sum over $1,000.00 received in the last 20 days of the campaign

Limits on Contributions First regulated in 1907 Outlawed donations by corporations or national

banks Today no person can giver more than

$2,300.00 each in a federal primary and in general election

No one can give more than $5,000.oo to a PAC FED adjusts every two years for inflation

PAC Contributions Neither corporations and unions can contribute

to candidate for a federal office Their PAC can There are 4,400 PACs active today

Limits on Expenditures Began in 1925 Only to Presidential Buckley v Valeo held “money is speech”

contrary to 1st Amendment One part held is cap on spending if candidate

accepts FEC subsidies

Public Funding for Presidential Campaigns 1971 Presidential Campaign Revenue Act

Each person could donate $3.00 for individual and $6.00 for joint return

Will match the first $250.00 up to the limit Fec could give a contender $21 million.

In 2008 John McCain spent $100 million on the GOP nomination

$7million from the FEC

McCain raised $230 million in private contributions

Until 2008 both candidates took public money Could spend no more than the general subsidy Could not accept campaign funds from another

sourceOnly McCain took money and could only

spend $84.1 million for fall campaign

Barack Obama became the first in 32 years to reject public money

He raised and spent $500 million in the ten week post convention campaign

Many people believe this will lead to the collapse of public funding

$300 million was spent on television advertising

Hard Money, Soft Money 1970’s placed limits on hard money

Hard money- those contributions that are given directly to candidates for their campaign

Are limited and must be reported

Soft money-funds given to parties or to a political organization in unlimited amounts

Used for party building activities Voter registration Against a public policy

Amount of money through soft money loophole rose from $19 million 1980 to $500 million in 2000

McCain-Feingold Rule in 2002 Bipartisan Campaign Reform Act (BCRA)

Bans soft money contributionsBut law does not say that political

organizations can not raise and spend these dollars

Special interest groups popped up and $200 million poured through the loophole

Even more for congressional elections in 20008

Most are know as 527’sObama discouraged them and McCain

accepted them