The High Cost Of Political Campaigns: How Much?

Political campaigns are costly affairs, with presidential candidates in the United States spending vast sums to get elected. The money comes from various sources, including donations, fundraising, and public funds, and is used to cover expenses such as salaries, office rentals, and communication costs. The cost of political campaigns has been rising, with the 2020 election cycle costing a record-breaking $15.1 billion, and the 2024 election spending projected to exceed this record. The rise in campaign costs can be partly attributed to the increasing influence of political action committees (PACs) and super PACs, which can raise unlimited amounts of money from individuals, unions, and corporations. These groups have been spending significant amounts to influence federal elections and lobby Congress and federal agencies.

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Presidential candidates' fundraising

Presidential campaigns in the United States are extremely expensive affairs, with candidates, parties, and political action committees (PACs) needing to raise significant amounts of money to run national campaigns. In the 2020 election cycle, campaigns raised over $9 billion between January 2019 and April 2020, which is about $10.6 billion when adjusted for inflation.

The Federal Election Commission (FEC) administers the laws regarding the public funding of presidential elections, including the primary matching funds process, general election grants to nominees, and mandatory audits of public funding recipients. The presidential public funding program provides eligible candidates with federal funds to cover qualified expenses during both the primary and general elections. This program is funded by taxpayers who voluntarily designate $3 of their taxes to the Presidential Election Campaign Fund. Taxpayers are not negatively impacted by this contribution, as it does not increase the amount of tax they owe, nor does it decrease any refund they are entitled to.

To be eligible for public funding, candidates must limit their spending and cannot accept private contributions. They may, however, spend up to an additional $50,000 from their personal funds, which does not count against the expenditure limit. The public funding takes the form of a grant of $20 million, plus the difference in the price index. For example, in 1976, each major party nominee received $21.8 million, while in 2008, the amount had grown to $84.1 million. For the 2024 election, the grant amount is $123.5 million.

While public funding is a significant source of financial support for presidential candidates, it is not the only source of funding. Candidates also raise funds from private sources, including wealthy individuals, unions, corporations, and other organizations. These donations can be made directly to the candidate's campaign or through PACs, which work on behalf of candidates or ballot initiatives. The rise of super PACs, which can raise unlimited amounts of money from individuals, unions, or corporations, has further increased the amount of money involved in presidential campaigns.

Super PACs and dark money groups

Super PACs, or super political action committees, are political committees that aim to influence the outcome of U.S. elections. They came into existence after the 2010 U.S. Supreme Court ruling that removed restrictions on corporations and unions funding campaigns. Super PACs can raise unlimited amounts of money from individuals, unions, or corporations, and these donations can remain anonymous. They are, however, legally required to disclose their donors, and they cannot donate directly to a candidate or coordinate with them.

"Dark money groups" are politically active nonprofits that are not required to disclose their donors, even if they spend money to influence elections. These groups are often 501(c)(4) social welfare organisations or (c)(6) trade associations, named after the sections of the Internal Revenue Code that grants them tax-exempt status. Dark money groups have spent large sums of money, primarily on television and online advertisements, to influence elections since the 2010 Citizens United v. FEC Supreme Court ruling. They are only required to report their spending if they mention a candidate shortly before Election Day or spend money on express advocacy that explicitly supports a candidate.

With each election cycle, dark money groups report less and less spending to the FEC, but more dark money is pouring into federal elections with less disclosure. During the 2018 midterm elections, liberal dark money groups accounted for about 54% of spending, while conservative and nonpartisan groups accounted for 31% and 15%, respectively. In the 2020 election cycle, there was over $1 billion in undisclosed spending, with $514 million going to help Democrats and $200 million to help Republicans. Joe Biden received $174 million in anonymous contributions, compared to Donald Trump's $25 million.

Opaque nonprofits and shell companies may give unlimited amounts of money to super PACs, and some super PACs effectively act as dark money outlets when the majority of their funding cannot be traced back to the original donor.

Public funding

Political campaigns in the US have become "billion-dollar affairs", with presidential candidates in major political parties spending millions of dollars in the 2024 election cycle. Candidates can finance their campaigns with their own money, or they can raise money from private donors, political action committee groups (PACs or super PACs), or through public funding.

In the US, the Fair Elections Now Act, or SB 752, called for publicly funded elections in US Senate campaigns. A companion bill, H.R. 1826, was introduced in the House, but neither bill moved out of committee. Comprehensive public funding systems have been in effect in Arizona and Maine since 2000, with approximately three-quarters of state legislators in Maine running their campaigns with government funds.

The Federal Election Commission (FEC) administers the laws regarding the public funding of presidential elections, including the primary matching funds process for eligible candidates, the general election grants to nominees, and mandatory audits of public funding recipients. Under the presidential public funding program, eligible presidential candidates receive federal government funds to pay for the qualified expenses of their campaigns in both the primary and general elections. To be eligible for primary matching funds, a candidate must raise more than $5,000 in each of at least 20 states.

In Canada, the most significant source of public funding for federal political parties is the election expenses reimbursement, which subsidizes 50% of the national campaign expenses of any party that obtains at least 2% support, or at least 5% in electoral districts where they presented candidates. The parties' riding organizations are also reimbursed 60% of all expenses incurred by their candidates in each riding where they obtained at least 10% of the votes, plus 100% of allowable "personal expenses".

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Federal Election Commission regulations

Political campaigns in the United States can cost billions of dollars. For instance, in 2024, all Senate candidates together raised $1.38 billion, while House of Representative candidates collectively raised $1.78 billion.

The Federal Election Commission (FEC) enforces the Federal Election Campaign Act of 1971 (FECA), which limits the amount of money individuals and political organisations can contribute to a candidate running for federal office. The FECA requires candidates for president, Senate, and the House of Representatives to disclose the names of individuals and organisations contributing to their campaigns, along with the amounts contributed.

The FEC has no jurisdiction over laws relating to voting, voter fraud and intimidation, ballot access, or election results. However, it has exclusive jurisdiction over the civil enforcement of federal campaign finance law. The FEC audits all campaigns that receive public funds for either the primary or general election. Candidates may be required to repay the Treasury if they misuse public funds, exceed expenditure limits, maintain a surplus of public funds, or receive more public funds than they are entitled to.

The campaign finance law exempts certain expenses from spending limits, such as specific fundraising and legal and accounting expenses. Eligible candidates may receive public funds of up to half of the national spending limit for the primary campaign. To qualify for matching funds, contributions must be deposited into the campaign account by December 31 of the election year. Additionally, the FEC encourages campaigns to designate contributions for specific elections, ensuring compliance with contribution limits and transparency in reporting.

Public funding for presidential elections is available through the Presidential Election Campaign Fund, which is funded by taxpayers who voluntarily designate $3 of their taxes to the fund. Major party presidential nominees can receive a grant of $20 million, with the agreement that they will not accept private contributions. Minor party candidates may be eligible for partial public funding.

Cost of communication

Political campaigns have become billion-dollar affairs, with presidential candidates, parties, political action committees, and other organizations requiring significant funds to run national campaigns. The cost of communication is a significant factor in these expenses.

Communication costs reported to the Federal Election Commission (FEC) for the 2023-2024 election cycle totaled $11.3 million. These costs include electioneering communications, which are broadcasts, cable, or satellite communications that refer to a specific federal candidate and are distributed within a set timeframe before an election. The FEC requires that the costs of such communications be reported when they exceed $2,000 per election, though they are not considered independent expenditures.

The rise of super PACs, or political action committees, has also impacted the cost of communication in political campaigns. After the US Supreme Court removed restrictions on corporations and unions funding campaigns in 2010, super PACs emerged as entities that could raise unlimited funds from individuals, unions, or corporations. While super PACs cannot donate directly to a candidate, they can spend significant amounts on communications and advertising to support their preferred candidates or causes.

Outside spending by super PACs and other groups has been a significant contributor to the rising cost of elections. For example, the 2020 federal election cycle set a record with $15.1 billion in total spending, and the 2024 election cycle is projected to surpass that with an estimated $15.9 billion in spending. Super PACs have played a significant role in this increase, with outside groups spending roughly $2.6 billion on the 2024 federal elections.

In summary, the cost of communication in political campaigns has become a significant expense, with millions of dollars being spent on electioneering communications and other advertising strategies. The rise of super PACs and the removal of restrictions on corporate and union funding have further contributed to the increasing cost of communication in political campaigns.

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