Chapter Five: Money: Who Gives It, Who Gets It
“Money is the mother’s milk of politics,” said the legendary California politician Jess Unruh, and when it comes to electing a president, he was certainly right. The conventional wisdom is that a credible candidate for president in 2008 will have to obtain at least $50 million dollars to pay for television advertising, travel, campaign staff, consultants, and other campaign costs. And that’s just for the primaries.
Overall, 2008 is likely to see the first $1 billion election, with the major party nominees for president each having spent over $500 million by the time Americans go to the polls in November. After adding the tens of millions of dollars that will be spent by all other challengers, the total cost of the 2008 presidential race may reach $1.4 billion, almost twice the $760 million spent by all candidates in 2004.
Concerns about fund-raising techniques, combined with the astounding amount of money being raised and spent, has prompted many Americans to wonder if this is a good way to choose a president. Reform advocates in particular are concerned that only candidates who can raise many millions of dollars can mount a serious campaign. This obstacle means that—unless they are personally very rich—candidates must tailor their approaches to appeal to moneyed interests.
Why They Donate: The Quest for Influence
Why do so many people and interest groups put so much money into presidential campaigns and other political campaigns? Many, especially large, organized donors, contribute because they have certain things they want the government to do (or not do), and they are convinced that spending money will increase their influence.
Sometimes the interests are economic—maybe the hospital industry wants health care rules that will increase payments to hospitals. Or the interests may be ideological—both the pro-choice and anti-abortion lobbies spend many millions to increase the chances that the president and members of Congress will listen to them.
Small donors give for a variety of reasons—ideological agreement with a candidate, anger over some public matter, or just to be part of the action. In some wealthy communities and social circles, people host candidate fund-raisers to meet the candidates or to boost their social standing.
Because money is so essential to the political process, trying to limit the influence of moneyed interests in U.S. politics is extremely difficult. When laws are passed restricting contributions, special interests are often very resourceful in finding new ways to raise and spend funds. A prime example of skillful circumvention of the law has taken place in recent years, as funders and political groups have adapted to the Bipartisan Campaign Reform Act of 2002. When donors were prohibited from giving soft money directly to the political parties, they were able to achieve some of their goals by creating or donating to freestanding political groups like 527s and 501(c)s. Despite the resourcefulness of moneyed interests in finding ways to influence the political process, most observers believe that the ongoing effort to “clean up” U.S. politics has had major beneficial effects — both in curbing the worst spending excesses and exposing to public scrutiny the flow of funds.
Public Funding of Presidential Elections: How It Works
Candidates in every presidential election since 1976 have been eligible to receive public funds to cover some of the costs of their campaigns. The idea behind public funding of presidential elections is to make candidates less dependent on contributions from special interests and wealthy donors. Public money for presidential elections comes from a fund supported by the “taxpayer check-off” on individual tax returns. These rules have stayed basically the same since 1976, though the amounts of money involved have been generally indexed to inflation. For example, the ceiling on each candidate’s spending in the primary election period was about $13 million in 1976; in 2004, it was about $50 million.
Primary Matching Funds
During the primaries, candidates can receive partial public funding in the form of matching payments, with the federal government matching all contributions up to $250. In other words, if you give $500 to a candidate during the primaries, the federal government will chip in its maximum of $250, but only if the candidate meets certain criteria.
These are:
• The candidate must show broad-based public support by receiving at least $5,000 in contributions of $250 or less in twenty or more states.
• The candidate must agree to a national limit on campaign spending for all primary elections.
• The candidate must agree to spending limits established for each state based on its voting-age population.
• The candidate cannot spend more than $50,000 of his or her own funds on the campaign.
Before 2004, few major-party candidates chose to forgo public financing in the primaries. The first successful nominee to do so was George W. Bush in 2000.
In 2004, however, three serious candidates went outside the public financing system: President George W. Bush, and Democrats Howard Dean and John Kerry.
After the primaries, the national political parties also receive some public financing to help pay for their nominating conventions. In 2004, each party received $14.9 million for that purpose.
General Election Funding
In addition to the primary matching funds, the presidential nominees of the major parties become eligible for public funding to support all campaign costs associated with the general election in the fall. In order to receive the general election funds, a candidate must limit spending to the amount he or she receives from the federal government, while pledging not to accept private contributions for the campaign. In 2004, the two major-party nominees were eligible for general election funding of $74.6 million apiece. That figure rises to $85 million in 2008.
The McCain-Feingold Act (BCRA) of 2002Throughout the 1990s, campaign reform forces tried again and again to get a stronger law passed by Congress. Leading the charge in the Senate were Senators John McCain, R-Ariz., and Russell Feingold, D-Wis., with Representatives Chris Shays, R-Conn., and Marty Meehan, D-Mass., providing the leadership in the House of Representatives. The major goals of the McCain-Feingold bill were to curb the growing influence of unlimited soft-money contributions to the Democratic and Republican national party organizations and to limit big-dollar special-interest funding for campaign advertising. In March 2002, Congress finally passed a version of McCain-Feingold, officially called the Bipartisan Campaign Reform Act. President George W. Bush signed it, and it went into effect the day after the November 5, 2002, election.
Key provisions of BCRA:
• National party organizations are forbidden to accept soft money contributions. They may only accept hard money—contributions subject to federal limits on who may donate and how much.
• Hard-money limits are increased. For example, the amount an individual may donate to a campaign went from $1,000 per election to $2,000 in 2004 and (adjusted for inflation) $2,300 in 2008.
• Corporations, unions, and trade associations were prohibited from financing “electioneering communications” within sixty days of a general election and thirty days of a primary election. An electioneering communication is one that refers to a federal candidate and is targeted toward that person’s state or district. However, as we explain later in this chapter, this section of BCRA is no longer fully in effect because of a 2007 Supreme Court decision. As soon as the law was signed, more than eighty plaintiffs, including both major political parties, filed suit in federal court to stop BCRA from going into effect. Those lawsuits were consolidated into one major case, McConnell v. FEC. In December 2003, the Supreme Court, to the surprise of many observers, upheld virtually the entire McCain-Feingold Act. Consequently, the elections of 2004 and 2006 were held under the new law. Overall, reform advocates think that BCRA has been successful in stopping the flow of soft money to the Democratic and Republican parties. Though critics warned that BCRA would damage the parties, the two parties have raised just as much money after BCRA as before. But instead of getting that money in six-figure soft-money donations, they’re raising it in small hard-money donations and have added more than a million small donors to their rolls.
McCain-Feingold was also successful in curbing questionable advocacy ads in 2004 and 2006, though that will be less true in 2008.
From the book, Choosing the President 20008: A Citizen’s Guide to the Electoral Process.Copyright 2008 by the League of Women Voters
Used by permission of Globe Pequot Press, www.globepequot.com
