Campaign Spending: The Most Expensive Political Race

Political campaigns in the US are expensive endeavours, with spending increasing faster than inflation over time. In the first 12 months of the 2024 election cycle, presidential candidates collected $374.9 million and disbursed $270.8 million. Political action committees (PACs) are a significant source of funding, contributing $3.7 billion in the same period. The development of super PACs has substantially impacted the political landscape, allowing for substantial spending on advertising and other activities that promote a candidate or political party. While spending large sums does not always guarantee victory, it is generally observed that money does play a crucial role in electoral success. The Federal Election Commission (FEC) enforces restrictions and monitors spending through designated bank accounts to ensure compliance.

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Presidential candidates

Presidential campaigns in the United States can be costly affairs, with candidates spending millions, and even billions, of dollars to get their message out to the public. The 2020 election cycle, for instance, was the most expensive federal election on record, with a price tag of nearly $14 billion. Of that amount, $6.6 billion was spent on the presidential race, $7.2 billion on Congressional contests, and $2.5 billion on state-level elections.

There are various ways in which presidential campaigns receive funding. Firstly, there is the presidential public funding program, where eligible candidates receive federal government funds to cover qualified expenses for both primary and general elections. This program is funded by taxpayers who voluntarily designate $3 of their taxes for the Presidential Election Campaign Fund. Additionally, individual citizens can contribute up to a certain limit to a primary candidate, with only a maximum of $250 of each individual's contribution being counted towards determining the candidate's eligibility for primary matching funds. To qualify for these matching funds, a candidate must receive contributions from a minimum of 20 contributors in each of at least 20 states.

Another source of funding for presidential campaigns is through campaign committees that raise money directly to support the candidates. Outside committees, such as Super PACs, can also play a significant role by raising unlimited funds, although they cannot collaborate directly with the candidates they favour. Super PACs have been criticised for allowing a surge in spending, with billionaires pouring in 160 times more funds into campaigns since the Citizens United ruling in 2010. Notable examples include Elon Musk, who spent over $250 million to elect Donald Trump, and Silicon Valley executives who collectively contributed more than $194 million to the 2024 presidential election.

In terms of spending by the candidates themselves, the 2024 election cycle saw a significant influx of funds. Between January 2023 and April 2024, US political campaigns collected around $8.6 billion for the House, Senate, and presidential elections. Of that amount, individual candidates drew over $2 billion, with Joe Biden raising the most at $170.6 million, followed by Donald Trump at $114.8 million, and Nikki Haley at $57.2 million. It is worth noting that these figures only represent a portion of the total funds raised, as they do not include last-minute fundraising efforts close to Election Day.

Congressional candidates

The amount of money spent on political campaigns in the US has been increasing over time. For example, the 2021 and 2022 election cycle saw an estimated $16.7 billion spent, exceeding the amount spent in the previous mid-term election.

In the 2019-2020 election cycle, there were 2,415 groups organised as super PACs, with total receipts of just over $2.5 billion and independent expenditures of almost $1.3 billion. 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.

During the first 12 months of the 2024 election cycle, Congressional candidates collected $1.3 billion and disbursed $718.7 million. In the 2022 Congressional races, the sources of campaign contributions were as follows:

• Republican donors, who outspent Democrats by $200 million
• Democratic donors, who did not disburse all of the money raised
• Individuals, who were the largest source of federal funds for party committees' traditional accounts, contributing $212.3 million to Democratic party committees and $179.2 million to Republican party committees

Political action committees (PACs) have also contributed significantly to Congressional candidates' campaign funds. PACs contributed $28.4 million to Senate candidates and $176.1 million to House candidates in the 2024 election cycle.

It is worth noting that the FEC enforces restrictions on money spent on political campaigns, and all expenses must be reported through a monitored bank account.

Political parties

During the first 12 months of the 2024 election cycle, political parties received $684.5 million and spent $595 million. This includes funds raised by party committees, which are crucial in providing financial support to candidates. In the same period, Democratic and Republican party committees received substantial amounts from individuals, with the Democrats taking the lead at $212.3 million compared to the Republicans' $179.2 million. PACs (Political Action Committees) also contributed significantly to party committees, with the Democrats receiving $35.8 million and the Republicans $33.1 million.

Party committees at the local, state, and national levels play a role in funding campaigns. For instance, in the 2024 election cycle, the Democratic National Committee raised $188.6 million, while the Republican National Committee collected $130.1 million. These committees also receive funds from their House and Senate candidate committees.

Public funding is also available for eligible presidential candidates of major parties, who can receive grants of up to $123.5 million for the 2024 election. This funding is intended to cover qualified expenses for both primary and general elections. To be eligible, candidates must agree to limit their spending and refrain from accepting private contributions.

While spending large sums on campaigns does not always guarantee victory, as other factors come into play, it is generally observed that money is crucial in politics. The sources and amounts of funding for political parties and campaigns are carefully monitored and regulated by the Federal Election Commission (FEC), which enforces restrictions on spending and requires all expenses to be reported through a monitored bank account.

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Political action committees (PACs)

There are also independent expenditure-only committees, known as super PACs, which can raise unlimited amounts from individuals, corporations, unions, and other groups to spend on, for example, ads for or against political candidates. However, they are not allowed to coordinate with or contribute directly to candidate campaigns or political parties. Hybrid PACs, sometimes called Carey Committees, are similar to super PACs but can give limited amounts of money directly to campaigns and committees while still making independent expenditures in unlimited amounts.

PACs play a significant role in political campaigns, with over 65% of the $8.6 billion collected by US political campaigns between January 2023 and April 2024 coming from PACs. During the 2020 election cycle, campaigns raised over $9 billion between January 2019 and April 2020, about $10.6 billion when adjusted for inflation.

Campaign finance laws

FECA imposes limits on campaign contributions to candidates for president and Congress, restricting the amount that individuals and political organizations can donate to a candidate running for federal office. It also prohibits corporations and labour unions from making direct contributions or expenditures in federal elections. However, these entities can sponsor separate segregated funds (SSFs) or "connected PACs," which are subject to specific regulations.

The laws also address public funding for presidential elections. Eligible candidates can receive federal funds to cover qualified expenses, with the aim of matching smaller individual contributions. Major party nominees may receive grants with spending limits, while minor party candidates may qualify for partial public funding.

Additionally, campaign finance laws require the disclosure of campaign contributions and expenditures. This transparency helps the public understand how campaigns are funded. The FEC maintains a database that tracks money spent on elections, including funding sources and expenditures by candidates, PACs, and party committees.

Despite these regulations, critics argue that loopholes exist, such as the exemption of soft money from federal limits following court decisions like Citizens United v. FEC. Soft money refers to contributions made to parties for general purposes rather than specific candidates, and it can be used for activities that indirectly support a particular party or platform.

The impact of money in politics is a significant concern, with rising campaign spending over the years. Reformers have suggested encouraging "small donor public financing" to dilute the influence of large donors and ensuring full disclosure of all political spending, including online advertising, to increase transparency and reduce the dominance of special interest groups in elections.

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