Simone Lawson
Political campaigns are costly endeavours, with candidates for office raising money to fund their campaigns and demonstrate support. The money spent on campaigns has increased over time, with the 2020 election cycle seeing a significant rise in spending compared to previous years. Between January 2019 and April 2020, campaign spending reached $4.8 billion, and by the end of the 2020 election cycle, expenditures topped $15.4 billion, or $18.2 billion when adjusted for inflation. The 2024 election cycle is on track to be even more expensive, with political campaigns collecting around $8.6 billion as of April 2024. This increase in spending has sparked debates about campaign finance reform and the influence of money in politics. While some argue that restrictions on campaign spending are necessary to limit the power of special interests, others, like Betsy DeVos and James Bopp, claim that these restrictions are an unjust limitation on free speech. The role of dark money and super PACs has also come under scrutiny, as they can significantly influence election outcomes without disclosing their donors.
| Characteristics | Values |
|---|---|
| Money spent on political campaigns in the 21st century | Increased faster than inflation |
| Total spending on the 2021-22 election cycle | $16.7 billion |
| Total spending on the 2019-20 election cycle | $4.1 billion |
| Total spending on the 2020 election cycle | $9 billion, $10.6 billion when adjusted for inflation |
| Total spending on the 2024 election cycle | $3.9 billion |
| Percentage of funding for the 2024 election from PACs | 56.5% or 65% ($2.2 billion or $5.6 billion) |
| Total amount raised by Thomas Massie in 2020 | $2 million |
| Total amount raised by Thomas Massie in 2025 | $205,000 |
| Total amount raised by Joe Biden as of May 9, 2024 | $170.6 million |
| Total amount raised by Donald Trump as of May 9, 2024 | $114.8 million |
| Total amount raised by Nikki Haley as of May 9, 2024 | $57.2 million |
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What You'll Learn
Political action committees (PACs)
Federal law allows for two types of PACs: connected and non-connected. Connected PACs, also known as corporate PACs, are established by businesses, non-profits, labor unions, trade groups, or health organizations. Non-connected PACs are formed by groups with an ideological mission, single-issue groups, and members of Congress and other political leaders. Judicial decisions added a third type, independent expenditure-only committees, or "super PACs," which can raise unlimited amounts from individuals, corporations, unions, and other groups to spend on political advocacy.
PACs have become a significant source of funding for political campaigns. During the 2024 election cycle, PACs contributed nearly $5.6 billion, or over 65% of the total funding. This represents a substantial increase in spending compared to previous election cycles. For example, during the 2020 election cycle, campaigns raised a total of $9 billion between January 2019 and April 2020, or $10.6 billion when adjusted for inflation.
Super PACs, in particular, have been subject to debate due to their ability to raise and spend unlimited amounts. While the Supreme Court has overturned some restrictions on PAC spending, citing free speech concerns, critics argue that unlimited spending by Super PACs can lead to undue influence in politics.
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Campaign finance laws
The first federal campaign finance law, the Tillman Act, was enacted in 1907. However, some sources cite the Navy Appropriations Bill of 1867, which prohibited government employees from soliciting contributions from Navy yard workers, as the first federal campaign finance law. In the years following the enactment of the Tillman Act, campaign finance remained a source of contention in American politics, with the Federal Election Campaign Act (FECA) of 1971 and the Bipartisan Campaign Reform Act (BCRA) of 2002 being passed to address these issues. The BCRA, also known as the McCain-Feingold Act, amended the FECA in several ways, including prohibiting national political party committees from soliciting or spending soft money and barring corporations and unions from using their funds for electioneering communications.
Despite these laws, critics argue that campaign spending has continued to rise steadily, with the 2020 federal election campaigns costing nearly $14 billion and becoming the most expensive campaign in U.S. history. This has led to concerns about the influence of money in politics and the effectiveness of existing campaign finance laws.
To address these concerns, reformers have proposed various solutions, including encouraging "small donor public financing" by using public funds to match and multiply small donations, fully disclosing all political spending, and regulating the activities of lobbyists who assist in congressional campaign finance. However, there are also opposing views, with some conservatives arguing that legal restrictions on money in politics are an unjust restriction on free speech.
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Presidential campaign funds
Spending on political campaigns in the US has been increasing over time, with the total cost of federal elections, including presidential campaigns, rising faster than inflation since the 1970s.
Sources of Presidential Campaign Funds
Presidential campaigns in the US are financed by a mix of private and public funds. While most campaign spending is privately financed, with candidates able to spend unlimited amounts of their own money, public financing is also available for eligible candidates.
Private financing includes donations from individuals, political action committees (PACs), and other political organizations. PACs are the largest source of funding, contributing over 50% of total expenditures in some cases. Candidates can also self-fund their campaigns without limits.
Public financing is provided through the Presidential Election Campaign Fund, which is funded by taxpayers who voluntarily designate a portion of their income tax to the fund. To be eligible for public funding, candidates must meet certain requirements, including demonstrating broad-based public support by raising a minimum amount of money from a certain number of contributors in multiple states. They must also agree to spending limits and other conditions, such as keeping financial records and allowing campaign audits.
Examples of Campaign Expenditures
Campaign funds are used for a variety of activities aimed at influencing elections, including advertising, ballot initiatives, rallies, and other promotional activities. Funds can also be used for administrative expenses, such as staffing and office costs, as well as legal and accounting fees.
Regulation of Campaign Funds
The Federal Election Commission (FEC) plays a crucial role in regulating campaign financing. It enforces laws such as the Federal Election Campaign Act of 1971 (FECA), which sets contribution limits for individuals and groups. The FEC also oversees public funding used in presidential elections and audits campaigns that receive public funds.
Despite these regulations, the role of money in politics remains a subject of debate. Some argue that legal restrictions on campaign spending limit free speech, while others emphasize the importance of transparency and fairness in the political process.
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Lobbying and corporate taxes
One notable example is the Tax Cuts and Jobs Act of 2017, which lowered the US corporate tax rate from 35% to 21%. This reduction was influenced by corporate lobbyists who argued that the tax cut would boost wages, economic growth, and job creation. However, critics argue that the promised benefits for workers and the economy did not materialise, and instead, the law led to a large increase in stock buybacks, benefiting shareholders.
Corporations have become adept at finding ways to minimise or eliminate their tax liabilities. Strategies such as accelerated depreciation, offshoring profits, tax credits, and deductions for employee stock options are commonly used to reduce corporate tax obligations. In 2020, the CARES Act further provided opportunities for tax avoidance by allowing businesses to "carry back" losses from previous years to offset their reported profits and obtain tax rebates.
The influence of corporate lobbying on tax policies has led to a significant loss in government revenue. It is estimated that corporations dodge $90 billion in taxes each year, with 55 large corporations paying $0 in federal corporate income taxes in 2020. These corporations spent $450 million on lobbying and political contributions to influence legislation and prevent reforms on corporate tax avoidance.
The relationship between lobbying and corporate taxes is complex and often controversial. While corporations argue that their lobbying efforts are necessary to protect their interests and promote economic growth, critics argue that it creates an unfair system where corporations can avoid contributing their fair share to society. Ultimately, the impact of lobbying on corporate taxes highlights the need for careful regulation and transparency to ensure a balanced and equitable tax system.
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Dark money
Spending on political campaigns has increased over the years, with the 2020 election cycle raising over $9 billion between January 2019 and April 2020, which was about $10.6 billion when adjusted for inflation. The cost of federal elections, congressional and presidential elections between 1990 and 2022 also rose faster than inflation.
The increase in political campaign spending can be attributed to the influx of "dark money", which refers to spending to influence elections, public policy and political discourse without disclosing the source of the funds to the public. Dark money groups have spent approximately $1 billion, mainly on television, online ads, and mailers to influence elections. This spending is not limited to federal elections, as dark money has also impacted state and local elections.
In the United States, certain nonprofit organizations, such as 501(c)(4) social welfare organizations, can spend money on campaigns without revealing their donors. These nonprofits and shell companies can give unlimited funds to super PACs, which are independent expenditure committees. While super PACs are required to disclose their donors, they can become dark money outlets when the majority of their funding cannot be traced back to the original donor.
The rise of dark money groups was influenced by the U.S. Supreme Court decisions in FEC v. Wisconsin Right to Life, Inc. (2008) and Citizens United v. FEC (2010). The latter decision allowed corporations and unions to spend unlimited funds to support or oppose political candidates, leading to a surge in dark money contributions. As a result, dark money spending has surpassed traditional PACs and super PACs in some elections.
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Frequently asked questions
Yes, money spent on campaigns has increased faster than inflation over time. For example, a $2 million political donation in 1972 was considered corrupt, but by 2016, this was worth $11 million. In the 2020 election cycle, campaigns raised over $9 billion between January 2019 and April 2020, about $10.6 billion when adjusted for inflation.
Political campaigns may raise funds from individuals, political party committees, and political action committees (PACs). Corporations, labor organizations, and membership groups cannot contribute directly to federal campaigns but can influence elections by creating PACs. These committees solicit donations from members to fund campaign activities, such as advertising.
Campaign finance laws vary at the state and federal levels, with different contribution limits and reporting requirements. The Federal Election Campaign Act, passed in 1971, sets limits on fundraising and spending and established the FEC to enforce federal campaign finance law. The First Amendment right to free speech has also been cited by the Supreme Court to allow unlimited independent expenditures for political communications by corporations and other associations.
Increased spending on political campaigns can have a significant impact on the political environment and the outcome of elections. However, it is not always the case that the candidate who spends the most wins. For example, Donald Trump's victory has been cited as an instance of the limits of money in politics, where he defeated well-financed opponents.
