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Section
3 Money and Elections
· Money plays a key role in politics but
presents serious problems to democratic government.
· Most campaign money comes from
private sources, including political action committees (PACs).
· Federal campaign laws
are administered by the Federal Election Commission (FEC).
· Loopholes in campaign
finance laws allow candidates and contributors to evade some regulations
Objectives
Why It Matters
Money is an indispensable campaign resource. Yet money also poses a variety of
problems in the election process. That’s why the use of money is regulated in today’s
elections.
Political Dictionary
political
action committee (PAC)
The political extension of special-interest groups which have a major
stake in public policy.
subsidy
A grant of money, usually from a
government.
soft money
Money given to State and local party organizations for
voting-related activities
hard money
Campaign money that is subject to regulations
by the FEC
Running for public
office costs money, and often a lot of it. That fact creates some difficult problems in American
politics. It leaves open the possibility that candidates will try to buy their way into public
office. It also makes it possible for special interests to try to buy favors from those who are in
office.
Clearly, government by the people must be protected from these dangers. But how? Parties
and candidates must have money. Without it, they cannot campaign or do any of the many things they
must do to win elections.
In short,
dollars are an absolutely necessary campaign resource. Yet, the getting and spending of campaign
funds can corrupt the entire political process.
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1.
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What are the two main problems
caused by money and politics? (pick 2)
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Campaign Spending
No one really knows how much money is spent on elections in the United States.
The presidential election eats up by far the largest share of campaign dollars. For 2004, total
spending for all of the major and minor party presidential efforts—for primaries, conventions,
campaigns, for everything—reached a mind-boggling $2 billion.
The vast sums spent on
congressional campaigns also continue to climb, election after election. Spending in all the Senate
and House races totaled more than one billion dollars in 2002, and even more than that in
2004.
Radio and television time, professional campaign managers and consultants, newspaper
advertisements, pamphlets, buttons, posters and bumper stickers, office rent, polls, data processing,
mass mailings, Web sites, travel—these and a host of other items make up the huge sums spent in
campaigns. Television ads are far and away the largest item in most campaign budgets today, even at
the local level. As Will Rogers put it years ago, “You have to be loaded just to get
beat.”
The total amount spent
in particular races varies widely, of course. How much depends on several things: the office
involved, the candidate and whether he or she is the incumbent, the opposition, and, not least, the
availability of campaign funds
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2.
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Which type of elections spend
the most in the U.S.?
a. | Supreme Court
Elections | c. | Senate
Elections | b. | House of Representative elections | d. | Presidential Elections |
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3.
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What is the main idea of the
passage above?
a. | Campaigns do not have to be as
expensive as they are | c. | You have to be
“loaded” to be president | b. | You have to be a corrupt politician to win an
election | d. | Our way of life and technology cause
modern elections to be very expensive |
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Sources of Funding
Parties and their candidates draw their money from two basic sources: private
contributors and the public treasury.
Private and Public
Sources
Private givers
have always been the major source of campaign funds in American politics, and they come in various
shapes and sizes:
1. Small contributors—those who give $5 or $10 or so, and only
occasionally. Only about 10 percent of people of voting age ever make campaign contributions; so
parties and candidates must look to other places for much of their funding.
2. Wealthy
individuals and families—the “fat cats,” who can make large donations and find it
in their best interest to make them.
3. Candidates—both incumbents and challengers, their
families, and, importantly, people who hold and want to keep appointive public offices. Ross Perot
holds the all-time record in this category. He spent some $65 million of his own money on his
independent bid for the presidency in 1992.
4. Various nonparty groups—especially political action
committees (PACs). Political action committees are the political arms of special-interest and
other organizations with a stake in electoral politics.
5. Temporary organizations—groups
formed for the immediate purposes of a campaign, including fund-raising. Hundreds of these
short-lived units spring up every two years, and at every level in American politics.
Then, too,
parties and their candidates often hold fund-raisers of various sorts. The most common are $100-,
$500-, and $1,000-a-plate luncheons, dinners, picnics, receptions, and similar gatherings. Some of
these events now reach the $100,000-or-more level in presidential campaigns. Direct mail requests,
telethons, and Internet solicitations are also among the oft-used tools of those who raise campaign
money.
Public
funds—subsidies from the federal and some State treasuries—are now another prime source
of campaign money. A subsidy is a
grant of money, usually from a government. Subsidies have so far been most important at the
presidential level, as you will see shortly
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4.
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The major source of campaign
funds in the U.S. come from
a. | public
subsidies | c. | government
agencies | b. | private sources | d. | religious organizations |
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5.
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What percentage of the people
give donations to political candidates?
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6.
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What do they call rich people
and families who make large donations to political campaigns?
a. | corporations | c. | fat cats | b. | political action committees | d. | interest groups |
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7.
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If you were interested in
legalizing marijuana what type of organization might you create to help candidates who support your
cause?
a. | social
network | c. | government agency
funding group | b. | Political Action Committee (PAC) | d. | a Federal Election Commission |
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8.
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Sometimes candidates get money
from the government in the form of
a. | legislation | c. | subsidies | b. | political action funds | d. | tax exemptions |
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Regulating Campaign Finance
Congress first began to regulate the use of money in federal elections in
1907. In that year, it became unlawful for any corporation or national bank to make “a money
contribution in any election” to candidates for federal office. Since then, Congress has passed
several laws to regulate the use of money in presidential and congressional campaigns. Today, these
regulations are found in four detailed laws: the Federal Election Campaign Act (FECA) of 1971, the
FECA Amendments of 1974 and of 1976, and the Bipartisan Campaign Reform Act of 2002.
The earliest federal laws were
loosely drawn, not often obeyed, and almost never enforced. The 1971 law replaced them. The 1974 law
was the major legislative response to the Watergate scandal of the Nixon years. The 1976 law was
passed in response to a landmark Supreme Court decision, Buckley v. Valeo, in 1976. The 2002 law
attempted to close the “soft-money” loophole in the 1974 and 1976 statutes; it was upheld
by the High Court in McConnell v. FEC in 2003.
Congress does not have the power to regulate the use of
money in State and local elections. Every State now regulates at least some aspects of campaign
finance, however—some of them more effectively than others.
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9.
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What was the purpose of the
Campaign Reform Act of
2002.?
a. | Allow corporations to make modest
donations to campaigns | c. | Exclude
individuals from making donations over the Internet | b. | Close loopholes in earlier campaign finance
laws | d. | Control state
elections |
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10.
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Congress can control money
donations in state elections
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The
Federal Election Commission
The Federal Election Commission (FEC) administers all federal law dealing with
campaign finance. Set up by Congress in 1974, the FEC is an independent agency in the executive
branch. Its six members are appointed by the President, with Senate confirmation.
Federal
campaign finance laws are both strongly worded and closely detailed. But they are not very well
enforced. In large part this is because the FEC has been both underfunded and understaffed. That is
to say, members of Congress—who, remember, raise and spend campaign money—have made it
practically impossible for the FEC to do an effective job. In short, the FEC finds itself in a
situation much like that of the chickens who must guard the fox house.
The laws that the FEC is
supposed to enforce cover four broad areas. They (1) require the timely disclosure of campaign
finance data, (2) place limits on campaign contributions, (3) place limits on campaign expenditures,
and (4) provide public funding for several parts of the presidential election
process.
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11.
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What government agency
administers all federal law dealing with campaign
finance?
a. | Congressional Election
Committee | c. | Presidents
Commission on Elections | b. | Federal Election Commission | d. | Political Action Committee |
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12.
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Why are campaign finance laws
not very effective?
a. | Individual members of Congress do
not want anything to disrupt the way they raise money for re-election | c. | The Supreme Court has ruled that campaign finance laws are
unconstitutional | b. | There are not enough laws | d. | They only apply to poor people |
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13.
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What is the purpose of
“disclosure requirements?”
a. | information for law
makers | c. | information to the
IRS | b. | force candidates to raise their own money | d. | to make public the source of campaign
financing |
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Limits on Contributions
Congress first began to regulate campaign contributions in 1907, when it
outlawed donations by corporations and national banks. A similar ban was first applied to labor
unions in 1943. Individual contributions became subject to regulation in 1939.
Today, no person
can give more than $2,000 to any federal candidate in a primary election, and no more than $2,000 to
any federal candidate’s general election campaign. Also, no person can give more than $5,000 in
any year to a political action committee, or $25,000 to a national party committee. The total of any
person’s contributions to federal candidates and committees now must be limited to no more than
$95,000 in an election cycle (the two years from one general election to the next one).
Those limits may seem generous; in
fact, they are very tight. Before limits were imposed in 1974, many wealthy individuals gave far
larger amounts. In 1972, for example, W. Clement Stone, a Chicago insurance executive, contributed
more than $2 million to President Richard Nixon’s reelection campaign
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14.
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No person can give more than
____ to a candidate in a general election.
a. | $1000. | c. | $5000 | b. | $2000 | d. | $10,000 |
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15.
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The amount of money you can
give to a Political Action Committee in one year is limited to $5,000
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Limits on Expenditures
Congress first began to limit federal campaign spending in 1925. Most of the
limits now on the books apply only to presidential (not congressional) elections. This fact is due
mostly to the Supreme Court’s decision in Buckley v. Valeo, 1976.
In Buckley, the High Court struck down
several spending limits set by the FECA Amendments of 1974. It held each of those restrictions to be
contrary to the 1st Amendment’s guarantees of freedom of expression. In effect, said the Court,
in politics “money is speech.”
The most important of the provisions the Court threw
out (1) limited campaign expenditures by candidates running for seats in the House or Senate, (2)
limited how much of their own money candidates could put into their own campaigns, and (3) said that
no person or group could spend more than $1,000 on behalf of any federal candidate without that
candidate’s permission.
The Court did recognize one exception to the ban on spending
limits. It held that the money spent by those presidential contenders who accept FEC subsidies
can be regulated. Candidates do not have to take the FEC money; but if they do they must
accept spending limits as part of the deal.15
For 2004, those major
party contenders who accepted the federal funds could spend no more than $37.3 million in the
preconvention period. (President Bush, who did not take the FEC money for that period, was on track
to spend more than five times that amount by the time the GOP convention met in New York in late
August.)
After the conventions, in the general election campaign, each of the major party
nominees could spend no more than $74.6 million. And neither major party’s national committee
could lay out more than $15 million for its presidential campaign efforts.
Minor party candidates can also qualify for FEC money.
Only a few have been able to do so, however—most recently, the Reform Party’s nominee,
Pat Buchanan in 2000.
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16.
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Which Supreme Court decision
struck down many of the regulations imposed by the Federal Election Commission
a. | Brown v. Board of
Education | c. | Buckley v.
Valeo, 1976 | b. | New York v. Buckley | d. | FEC v. Congress |
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17.
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According to the Supreme Court,
donating money to a campaign, especially your own money, is a form of
a. | free
speech | c. | checks and
balances | b. | corruption in politics | d. | equal protection of the law outlined in the 14th
Amendment |
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Public Funding of Presidential Campaigns
Congress first began to provide for the public funding of
presidential campaigns in the Revenue Act of 1971. It broadened sections of that law in 1974 and
again in 1976.
The 1971 law set up the Presidential Election Campaign Fund. Every person who
files a federal income tax return can “check off” (assign) three dollars of his or her
tax payment (six dollars on a joint return) to the fund. The monies in the fund are used every four
years to finance (1) preconvention campaigns, (2) national conventions, and (3) presidential election
campaigns. The FEC administers the public subsidy process.
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18.
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The money for public funding of
political campaigns is provided by
a. | the Presidents slush
fund | c. | Congressional Campaign
Committees | b. | individuals who donate through their income tax
return | d. | Congressional
Caucuses |
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19.
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Public funding of campaigns is
a
a. | subsidy | c. | tax shelter | b. | tax | d. | 403b plan |
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Hard Money, Soft Money
Nearly 40 years ago, President Lyndon Johnson described the then-current body
of federal campaign finance law as “more loophole than law.” Over recent years, we have
come very close to the point where LBJ’s comment could be applied to federal election money
statutes today—particularly because of soft money
For over 30 years now, federal campaign finance laws have placed limits on hard money—that is, on money
raised and spent to elect candidates for Congress and the White House. But, until 2002, those laws
did not limit soft money—funds given to
party organizations for such “party-building activities” as candidate recruitment, voter
registration and get-out-the-vote drives, and similar efforts.
Both major parties began to raise soft money (began to
exploit the soft-money loophole) in the 1980s, and they intensified those efforts in the 1990s. The
Republican and Democratic National Committees and their House and Senate campaign committees gathered
millions of unregulated dollars from wealthy individuals, labor unions, corporations, and other
interest groups. Officially, those funds were raised for party-building purposes, but both parties
found it easy to filter them into their presidential and congressional campaigns.
Congress—after years of
debate and delay—finally enacted the Bipartisan Campaign Reform Act (the BCRA) of 2002.
The new measure became law largely
because of years of unremitting effort by its chief sponsors: Senators John McCain (R., Arizona) and
Russ Feingold (D., Wisconsin) and Representatives Christopher Shays (R., Connecticut) and Martin
Meehan (D., Massachusetts).
The BCRA’s major provisions are aimed at the soft-money
problem. They ban soft-money contributions to political parties. But the law does not say that
other political groups cannot
raise and spend those dollars. Almost immediately, a number of independent groups—groups with
no formal ties to any party—emerged to do just that. In short, creative minds in both major
parties found a way to skirt the ban on soft money. Some $200 million poured through that loophole in
2004.
The most prominent of those groups in the last presidential election included America
Coming Together, MoveOn.org, and the Media Fund; all three supported John Kerry and other Democrats.
The Program for America Voters Fund was the most visible independent group backing President Bush and
other Republicans.
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20.
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What is hard
money?
a. | money donated directly to candidates
running for office | c. | money deducted
from individual pay checks | b. | money donated to political parties for party
building | d. | actual cash rather than checks or
credit cards |
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21.
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What is soft
money?
a. | money donated directly to candidates
running for office | c. | money deducted
from individual pay checks | b. | money donated to political parties for party
building | d. | actual cash rather than checks or
credit cards |
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22.
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For the most part the
Bipartisan Campaign Reform Act (the
BCRA) of 2002. or
“McCain / Feingold Campaign Reform Act” has been _____ in
controlling campaign spending
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Why People Give
Campaign donations are a form of political participation. Those who make them
do so for a number of reasons. Many small donors give simply because they believe in a party or in a
candidate. Many of those who give, however, want something in return. They want access to government,
and hope to get it by helping their “friends” win elections. And, notice, some
contributors give to both sides in a contest: Heads they win and tails they still win.
Some big donors want appointments
to public office, and others want to keep the ones they have. Some long for social recognition. For
them, dinner at the White House, meeting with a Cabinet official, or knowing the governor on a
first-name basis may be enough. Organized labor, business, professional, and various other groups
have particular policy aims. They want certain laws passed, changed, or repealed, or certain
administrative actions taken
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23.
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There are two basic reasons
people have for making political donations. (pick 2)
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· Money plays a key
role in politics but presents serious problems to democratic government.
· Most campaign money comes from private sources,
including political action committees (PACs).
· Federal campaign laws are administered by the
Federal Election Commission (FEC).
· Loopholes in campaign finance laws allow candidates and contributors to evade some
regulations
· political action committee (PAC)
The
political extension of special-interest groups which have a major stake in public
policy.
· subsidy
A grant of money, usually
from a government.
· soft money
Money given to State and
local party organizations for voting-related activities
· hard
money
Campaign money that is subject to regulations by the
FEC
a. | political
action committees (PACs) | d. | hard money | b. | subsidy | e. | Federal Election Commission
(FEC) | c. | soft money | f. | Loopholes |
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24.
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Money donated to the party
instead of the candidate
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25.
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Finding ways to get around the
intent of the election laws
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26.
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A group of people who campaign
on an issue that helps the candidate
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27.
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This government authority is
in charge of administering election laws
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28.
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The Federal Election Committee
regulates these kinds of political donations
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29.
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Money given to individuals and
groups by the government
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