Campaign Financing_ Sources and Reform

Campaign financing is essential for electoral processes, governed by two primary types: hard money and soft money.

Definition: Campaign contributions regulated by the Federal Election Commission (FEC).
Sources:
- Individuals: Limited to $2,500 per candidate per election. Overall contribution limit in a two-year cycle is up to $117,000.
- Political Parties: Contribute about 20% of a candidate's campaign funds. Maximum contributions are $5,000 for House candidates and approximately $43,000 for Senate candidates.
- Public Funds: Derived from taxpayers’ donations through tax returns (specifically a $3 check-off). Candidates must raise at least $5,000 for federal matching funds; caps at $91,200,000 for matching funds.
- Personal Savings: Candidates can spend unlimited personal funds on their campaigns (established in Buckley v. Valeo, 1976).

Definition: Campaign contributions that are not subject to FEC regulations, but regulated by IRS tax laws.
Types of Soft Money Groups:
- 527 Groups: Spend on electoral activities, not direct contributions to candidates (e.g., get-out-the-vote initiatives). In 2012, they spent $343 million overall.
- 501(c) Groups: Nonprofit tax-exempt organizations which can advocate for candidates and do not disclose donor identities. They can only allocate half of their funds for political campaigns.

PACs are formed by economic or ideologically driven groups to funnel money into campaigns.
Contribution limit: $5,000 per candidate per election.
In 2012, PACs contributed $32 million, with 61% to Republicans and 39% to Democrats.
PACs are often criticized for being viewed as buying influence and favor.

Definition: A newer and rapidly growing entity that combines multiple PACs, allowing independent spending without limits.
Emerged around 2012; by the 2012 elections, they spent over $600 million across electoral races.

Historically, campaign finance reform has been driven by concerns over the influence of money in politics.
Following the Watergate scandal, the Federal Election Commission was established to regulate campaign financing.
The Bipartisan Campaign Reform Act (2002), also dubbed the McCain-Feingold Act, imposed regulations on political ad funding, limiting certain contributions and ads before elections.
The Act has faced challenges, notably from the Citizens United case (2010), framing money in politics as a form of free speech, leading to ongoing debates and legal battles.