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Understanding Election Campaign Financing

Last Updated:2014-Apr-20
Principal Writer:Barry Shatzman

Issue Sections

Understanding The Issue

Reported News

Elections: Campaign Finance

Related Bills


2002 (HR-2356)

Related Court Cases

(2014) McCutcheon v. FEC
(2010) Citizens United v. FEC
(1976) Buckley v. Valeo

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Why is it important to understand campaign financing?

The issue of citizens giving money to candidates for public office is about balancing various aspects...

Your right to express your views about people who might be elected to represent you. One way to express those views is to contribute money to a candidate's election campaign. Most of the money is used to buy campaign ads.
A few people giving the most money can have greater influence on an election (and on the elected representative) than the overwhelming majority of the people whose interests they are elected to represent.

You have the right to express your views anonymously
It helps the public to know if a person, corporation, or industry is providing a large amount of support to a candidate, to help evaluate public policies the representative advocates.

The Federal Elections Campaign Act and Revenue Act

Various laws and Supreme Court decisions have attempted to balance these issues. Here is a brief history of campaign financing regulations...

In 1971, the Federal Election Campaign Act (FECA) and other related bills...

o Required full reporting of campaign contributions and expenditures

o Limited spending on media ads

o Created an exception to the laws dating back to 1947 that prohibited direct contributions by corporations and labor unions to influence Federal elections. It allowed them to establish structures that would come to be known as Political Action Committees (PACs).

1974 amendments...

o Created the Federal Elections Commission (FEC) to ensure compliance with campaign finance laws.

o Allowed corporations and unions with federal contracts to create Political Action Committees (PAC)

o Provided for public funding of presidential election campaigns. It is this law that created that box you can check on your tax return to dedicate a dollar (now $3) for this purpose.

The 1976 Buckley v. Veleo Supreme Court decision

The 1976 Buckley v. Valeo Supreme Court decision...

o Upheld contribution limits, saying they serve the government's interest in safeguarding the integrity of elections.

o Overturned expenditure limits, saying that spending limits restrict the quantity of campaign speech by candidates. The court said that spending limits still could be imposed on candidates who accept public funding for their campaigns.

Bipartisan Campaign Reform Act (McCain-Feingold)

In 2002, the Bipartisan Campaign Reform Act (also referred to as the McCain-Feingold Act)...

o Increased the amount an individual could contribute to a candidate in a federal election (referred to as hard money). Individuals would be allowed to contribute $2,000 per candidate for an election. Also increased the total amount an individual could give to all candidates combined to $95,000. Both of those limits are adjusted for inflation, leading to today's current limits.

o Prohibited candidates from raising money for organizations (such political-action committees) that work to influence an election. This type of contribution is referred to as soft money

o Effectively banned unions and corporations from funding the broadcast of political advertisements - referred to as electioneering communications - within 60 days of a general election or 30 days of a primary.

Citizens United v. FEC Supreme Court decision

The 2010 Citizens United v. FEC Supreme Court decision invalidated the provision of the Bipartisan Campaign Reform Act prohibiting corporations from their money to influence elections within 30 days of a primary or 60 days of a general election.

McCutcheon v. FEC Supreme Court Decision

In 2014, the Supreme Court ruled in McCutcheon v. FEC that that Congress cannot impose limits on how much someone can contribute overall to election campaigns. Congress still can, however, limit how much someone may contribute to individual candidates.

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