Chapter 7 The Electoral Process Section 2 Money and Elections

Money & Elections Objectives: * Explain the issues raised by campaign spending. * Describe the various sources of funding for campaign spending. * Examine federal laws that regulate campaign finance. * Outline the role of the Federal Election Commission in enforcing campaign finance laws. * Describe loopholes in today’s campaign finance laws.

Money & Elections * 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 interest groups to try and buy their favors from those who are in office. * Government by the people must protected from these dangers.

Money & Elections Campaign Spending * No one really knows how much money is spent on elections in the United States. * Reliable estimates of total spending in recent presidential elections show that around $ 5.1 billion was spent in the 2000 election. * In 2012, it is estimated that $ 6.0 billion was spent * The amount of money spent on congressional and presidential elections continues to climb each election.

Money & Elections * Radio and television time is expensive * Campaign managers, consultants, newspaper ads, pamphlets, buttons, bumper stickers, office rent, polls, travel, mass mailings, web-sites, data processing are very costly. * This year it could cost up to $1,500 for a 30 second commercial spot on television during prime time.

Money & Elections Sources of Funding * Parties and their candidates draw their money from two basic sources – Private and Public treasury. * Private givers are the major source of campaign funds in American politics. * Small contributors (those who gave $ 5-10 or so) * Wealthy individuals and families called “fat-cats) * Candidates – * Various nonparty groups – PACS * Temporary organizations – formed to raise $$$

Money & Elections Political Action Committees (PACs) > political arms of special-interest groups, which have a major stake in public policy. Fundraiser Meals > the $ 100, $ 500, $ 1,000, and $ 5,000a-plate dinners Subsidy – a grant of money usually from a government < used to help fund a presidential election.

Money & Elections * Campaign donations are a form of political participation. * Those who make them do so for a number of reasons. 1. Give because they believe in a party 2. Give to access the Government 3. Give to both parties for a major election – Heads they win, Tails they win 4. May want an appointment to public office 5. Want social recognition

Money & Elections Regulating Campaign Finance * Congress first began to regulate the use of money in federal elections in * It became unlawful for any corporation or national bank to make a money contribution in any election to candidates for federal offices. * Since then, laws have been passed to regulate the money that is given to candidates. * Federal Election Campaign Act of 1971 * Amendments adopted in 1974 and 1976 * Congress does not have the power to regulate the use of money in State and local elections.

Money & Elections The Federal Election Commission * They set up the laws dealings with campaign finance. * Set up in 1974 by Congress. * It is an independent agency in the executive branch with six members appointed by the President with Senate confirmation. 1) they require the timely disclosure of campaign finance data. 2) place limits on campaign contributions 3) place limits on campaign expenditures 4) provide public funding (subsidies) for several parts of the presidential election process.

Money & Elections * Disclosure Requirements means the candidates must have detailed reports of who gave money to your campaign. * Many rules that a candidate has to follow * Must identify all expenses over $ 200 by listing the person or firm that you did business with. * Any contribution of $ 5,000 or more must be reported to the FEC within 48 hours after the money is received. * Any contribution of $ 1,000 or more that is received in the last 20 days of a campaign.

Money & Elections * Congress first began to regulate campaign in 1907 * It outlawed donations made by national banks and corporations. * A similar ban was applied to Labor Unions in * Today, no person can give more than $ 1,000 to any federal candidate in a primary election, * Also may not give more than $ 1,000 in a general election. * No one can give more than $ 5,000/year to a political action committee.

Money & Elections * No Corporations and labor unions can contribute to a candidate running for federal office. * PACs can contribute to these candidates. * There are some 4,000 PACs registered with the Federal Government. * No PAC can give more than $ 5,000 to a single federal candidate. * Most limits that have been set for elections are only for the Presidential race. * Some laws by the Federal Election Commission have been struck down the Supreme Court.

Money & Elections * If a candidate for President receives money from the FEC, they are limited to how much they can spend. * In 2000, preconvention period the limit was $ 40.5 million and then the post convention period was $ 67.6 million. * If a candidate does not accept any money from the FEC, none of these rules apply to them. * First time Congress provided money for federal campaigns was in * To get money from the FEC, a candidate has to raise a certain amount to qualify for the federal money.

Money & Elections * There are three (3) areas that the money can be used for. 1) preconvention campaigns 2) national conventions 3) presidential election campaigns * Minor party candidates can also qualify for FEC money. * Ross Perot (1992) did not accept any money from the FEC, so he was exempt from many of the laws that the other candidates had to follow.

Money & Elections Loopholes in the Law * There are 3 immense loopholes in the laws 1) Soft Money – it includes those contributions made to State and local party organizations for such “party- building activities”. Voter Registration and get-out-the-vote drive. Hard Money – campaign money that is regulated by the FEC.

Money & Elections 2) Independent campaign spending >someone who participates in a campaign entirely on their own. <they can spend all they want to in an election. >only tied to spending if they accept money from the FEC 3) Issue Ads >congressional campaigns that put ads in the media about controversial areas of public policy. <such as health care, social security, foreign trade >don’t mention the names of those candidates that ads sponsors support or hope to defeat.