Campaign finance in the United States


The financing of electoral campaigns in the United States happens at the federal, state, and local levels by contributions from individuals, corporations, political action committees, and sometimes the government. Campaign spending has risen steadily at least since 1990. For example, a candidate who won an election to the U.S. House of Representatives in 1990 spent on average $407,600 while the winner in 2022 spent on average $2.79 million ; in the Senate, average spending for winning candidates went from $3.87 million to $26.53 million.
In 2020, nearly $14 billion was spent on federal election campaigns in the United States — "making it the most expensive campaign in U.S. history", "more than double" what was spent in the 2016 election.
Critics assert that following a number of Supreme Court decisions — Citizens United v. FEC in particular—the "very wealthy" are now allowed to spend unlimited amounts on campaigns, and to prevent voters from knowing who is trying to influence them. Consequently, as of at least 2022, critics allege "big money dominates U.S. political campaigns to a degree not seen in decades" and is "drowning out the voices of ordinary Americans."
On December 6, 2024, The Washington Post reported that Elon Musk had donated $277 million to Trump and allied Republicans, making him the single largest individual political donor in the 2024 election and the largest donor since at least 2010, not counting candidates who funded their own campaigns, according to data from OpenSecrets. As Senator Angus King pointed out, “It used to be, ‘If you buck us, we will primary you.’ Now, ‘If you buck us, we will primary you and Musk will pay for it.’ So it’s a double-barreled threat We’re talking about him putting $100 million against you in a primary.”
Public concern over the influence of large donors in political campaigns was reflected in a 2018 opinion poll which found that 74% of Americans surveyed thought it was "very" important that "people who give a lot of money to elected officials" "not have more political influence than other people", but that 72% thought this was "not at all" or "not too" much the case.
Another 65% of respondents agreed that it should not be impossible to change this and that "new laws could be written that would be effective in reducing the role of money in politics".
Laws regulating campaign donations, spending and public funding have been enacted at the federal level by the Congress and enforced by the Federal Election Commission, an independent federal agency. Nonprofit, non-governmental grassroots organizations like the Center for Responsive Politics, Consumer Watchdog and Common Cause track how money is raised and spent.
Although most campaign spending is privately financed, public financing is available for qualifying candidates for President of the United States during both the primaries and the general election. Eligibility requirements must be fulfilled to qualify for a government subsidy, and those that do accept government funding are usually subject to spending limits on money.
Races for non-federal offices are governed by state and local law. Over half the states allow some level of corporate and union contributions., some states have stricter limits on contributions, while some states have no limits at all. Much information from campaign spending comes from the federal campaign database which does not include state and local campaign spending.

Terminology, definitions

  • "campaign funds" are defined by the Federal Election Campaign Act as funds "used for purposes in connection with the campaign to influence the federal election of the candidate".
  • "Dark money": spending to influence elections where the source of the money is not disclosed to voters.
  • Soft Money: money that is not supposed to "advocate the election or defeat of a federal candidate", but instead to be used for "state and local elections and generic 'party-building' activities, including voter registration campaigns and get-out-the-vote drives". Unlike hard money, there are "no federal contribution limits" on it .
  • Hard Money: "regulated contributions "from an individual or PAC to a federal candidate, party committee or other PAC, where the money is used for a federal election"

    Campaign spending

Money spent on campaigns in the 21st century has risen somewhat faster than inflation over time.
Over the decades it has risen much faster. Jane Mayer notes that in 1972 a $2 million dollar political donation by an insurance magnate in 1972 "caused public outrage and contributed to a movement that produced the post-Watergate reforms in campaign financing". But the sum that "was considered deeply corrupt during the Watergate days" was worth about $11 million adjusted for inflation by 2016, when the Koch brothers political network bundled $889 million for a "political war chest" for that year's election.
;2022
An estimated $16.7 billion was spent on the 2021 and 2022 election cycle, exceeding that of the last mid-term election. According to Open Secrets, of the 25 top donors for the 2021-2022 cycle, 18 are Republican, who have outspent Democrats by $200 million, and much of the Democrat's money was not disbursed.
In the 2022 Congressional races, the sources of campaign contributions broke down as follows:
2022 Congressional
races		Small Individual
Contributors		Large Individual
Contributors		Political Action
Committees		Self-Financing
House Democrats19.4%52.5%23.4%2.0%
House Republicans20.9%42%23.1%0.8%
Senate Democrats27.5%59.3%8.9%0.0%
Senate Republicans35.1%45.7%11.2%0.1%

2024
An estimated $15.9 billion was spent on the 2024 election cycle, the second costliest U.S. election after the 2020 election. Of this $15.9 billion, $10.2 billion was spent on congressional races while $5.5 billion was spent on the presidential race.

Impact of contributions

Impact on recipients

A 2016 experimental study in the American Journal of Political Science found that politicians made themselves more available for meetings with individuals when they believed that the individuals had donated to their campaign. A 2011 study found that "even after controlling for past contracts and other factors, companies that contributed more money to federal candidates subsequently received more contracts." A 2016 study in the Journal of Politics found that industries overseen by committees decreased their contributions to congresspeople who recently departed from the committees and that they immediately increase their contributions to new members of the committees, which is "evidence that corporations and business PACs use donations to acquire immediate access and favor—suggesting they at least anticipate that the donations will influence policy." Research published in 2020 by University of Chicago political scientist Anthony Fowler and Northwestern University political scientists Haritz Garro and Jörg L. Spenkuch found no evidence that corporations that donated to a candidate received any monetary benefits from the candidate winning election.
However, another study found that increasing lobbying reduces a corporation's effective tax rate, with an increase of 1% in lobbying expenditures expected to reduce a corporation's next-year tax rate between 0.5 and 1.6%. Another study based on data from 48 different states found that every $1 "invested" in corporate campaign contribution is worth $6.65 in lower state corporate taxes.

Impact on electoral success

At least according to one academic,, campaign spending does not correlate with electoral victory. "You have to have enough, but it doesn't have to be the most." It has been suggested that Donald Trump's victory over well financed opponents was an example of the limits of money in politics.
However, comparing electoral success with who spent the most running for congress, OpenSecrets found that while "money doesn't always equal victory... it usually does."
This may be because donors give to candidates who are "already viewed as being much stronger" than their opponent to ingratiate themselves with what looks like the winner, but also because money going to a less well-known candidate has the intended effect and results in their winning. "Even in wave elections, the candidate who spends the most, usually wins. This trend is stronger in the House than the Senate but applies in both chambers".

State level

A 2012 study by Lynda Powell examined "subtle and not-so-subtle ways in which money buys influence" in state legislatures. They varied "from setting a party's agenda, to keeping bills off the floor, to adding earmarks and crafting key language in legislation", but did not often include voting yes or no on particular legislation. She found that political money "carries more weight" in states with "more highly compensated legislators, larger chambers, and more professionalized leadership structures", where the "majority party's advantage is tightly contested and whose legislators are more likely to hold hopes of running for higher office"; less weight where legislatures have term limits and voters are more highly educated.
According to the New York Times however, "several scholars" state that
studies "comparing states like Virginia with scant regulation" on political contributions, against those like Wisconsin with "strict rules" have "not found much difference in levels of corruption or public trust".

Criticism

Reasons offered for why "big money" in politics should be regulated include: it
  • "results in corruption"; ;
  • harms trust in government;
  • decreases public interest in public affairs and government;
  • gives powerful corporations and wealthy individuals leverage to not just express their political views or support for a candidate, but to "reshape the American economy in their favor", favoring lower taxes and smaller government over public spending to improve policing, public schools, environmental protection, and employment opportunities.
  • wastes economic resources on "rent-seeking," as players in the private sector spend time and money "trying to get a bigger piece of the economic pie for themselves", instead of focusing on enlarging the pie itself.