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What are the Basic Rules for US Campaign Spending?

US campaign spending is governed by a complex set of regulations designed to ensure transparency and fairness. Key rules include contribution limits, reporting requirements, and restrictions on foreign involvement. These measures aim to prevent undue influence and maintain the integrity of elections. But how do these rules adapt to the evolving political landscape? Explore the intricacies that shape American democracy.
Susan Zeller Dunn
Susan Zeller Dunn

The basic rules for U.S. political campaign spending are drawn primarily from the Federal Election Campaign Act (FECA). FECA dates back to the early 1970s. It was amended in 2002 with the passage of the Bipartisan Campaign Reform Act (BCRA), also known as the McCain-Feingold Act after its sponsors. Per these statutes, the general rules for U.S. campaign spending are divided into three categories: contributions, expenditures and disclosures.

The most commonly acknowledged rule addresses campaign contribution limits. FECA provides caps on what a person or group can contribute to a political candidate, political action committee (PAC) or party committee. These contribution caps are adjusted each election cycle to keep pace with inflation. As an example, in the 2009-2010 election cycle, a person could legally give up to $2,400 U.S. Dollars (USD) to a candidate or his candidate committee. This person could also contribute up to $30,400 USD to his national party committee each calendar year.

Russell Feingold coauthored an amendment to the Federal Election Campaign Act.
Russell Feingold coauthored an amendment to the Federal Election Campaign Act.

National, state and certain local party committees are granted permission to contribute funds to their chosen federal candidate as long as they comply with FECA contribution limits. A national party committee can contribute up to $5,000 USD to each candidate or candidate’s committee during an election. This particular contribution limit is not adjusted for inflation. No person or organization can make a contribution in another person's name. Moreover, they cannot make a single cash contribution of $100 USD or more.

In public elections, individuals and groups have limits placed on the amount of campaign money they can give to one candidate.
In public elections, individuals and groups have limits placed on the amount of campaign money they can give to one candidate.

In certain circumstances, FECA completely prohibits contributions. The law bars any federal campaign contributions or expenditures by labor organizations, corporations, U.S. government contractors, and foreign nationals. Additionally, FECA prohibits national banks, foreign nationals and federally chartered corporations from making contributions or expenditures to state or local election campaigns. With the passage of the BCRA, soft money contributions to national political parties were prohibited. Soft money contributions are unregulated contributions from independent organizations that are not associated with any candidate’s campaign.

State and local committees can pour unlimited amounts of money into grassroots activities such as voter drives.
State and local committees can pour unlimited amounts of money into grassroots activities such as voter drives.

Different rules apply to independent expenditures. Federal election law permits a person or a group such as a PAC to make as many independent expenditures as desired. Independent expenditures exist when organizations or people provide funding for campaign communications, such as television advertising, that calls for the election or defeat of a specific candidate and which is made independent of that candidate’s campaign. While there is no limit on this spending, there is a disclosure requirement. The organization or person must report the existence of the independent expenditure and the source of the money.

In early 2010, the U.S. Supreme Court heard the case of Citizens United v. Federal Election Commission. In this case, the court held that, because of free speech considerations, campaign spending laws as they existed at the time cannot bar a corporation or labor union from funding an independent political broadcast associated with a federal election. Moreover, as an example of another form of independent expenditure, state and local committees can pour unlimited amounts of money into grassroots activities such as voter drives in support of their candidate.

While corporations and labor unions are prohibited from making contributions or expenditures in a federal political campaign, they may establish their own PACs. These PACs may raise funds from a limited group of people, then use the funds raised to support specific political campaigns or committees. Beyond supporting these PACs, corporations and labor unions are permitted other activities relating to federal elections, subject to certain restrictions.

Finally, pursuant to FECA, groups including PACs; national, state and certain local political parties; and candidate committees are required to disclose the results of their federal campaign fundraising and campaign spending efforts. These organizations must disclose the names of any person who gives them more than $200 USD in any given election period. They must also disclose any expenditure to any person or vendor that exceeds $200 USD.

Frequently Asked Questions

What are the contribution limits for individuals donating to federal campaigns?

According to the Federal Election Commission (FEC), for the 2021-2022 election cycle, individuals can donate up to $2,900 per election to a federal candidate, $5,000 per year to a PAC, $10,000 per year to a state or local party committee, and $36,500 per year to a national party committee. These limits are subject to periodic adjustments for inflation. For the most current limits, visit the FEC website at https://www.fec.gov/help-candidates-and-committees/candidate-taking-receipts/contribution-limits/.

Can corporations and unions directly contribute to federal campaign candidates?

No, corporations and unions are prohibited from making direct contributions to federal candidates or to the candidates' campaigns. However, they can establish and contribute to a Political Action Committee (PAC) that can contribute to campaigns within federal limits. They may also spend unlimited amounts independently advocating for or against candidates through what is known as independent expenditures. This information is detailed on the FEC's website at https://www.fec.gov/introduction-campaign-finance/understanding-ways-support-federal-candidates/.

What is a Super PAC, and how does it differ from traditional PACs in terms of campaign spending?

A Super PAC, or Independent Expenditure-Only Committee, can raise and spend unlimited amounts of money to advocate for or against political candidates, but cannot donate directly to candidates or coordinate with their campaigns. Unlike traditional PACs, which have contribution and spending limits, Super PACs can accept funds from individuals, corporations, and unions without legal caps. The FEC provides a comparison at https://www.fec.gov/help-candidates-and-committees/registering-pac/super-pacs/.

Are there spending limits for candidates using their personal funds for their campaigns?

Candidates are allowed to spend an unlimited amount of their personal funds on their own campaigns. This is because the Supreme Court has ruled that such spending is a form of constitutionally protected free speech. There are no limits on the amount a candidate can loan or donate to their campaign, but they must report all personal funds used to the FEC. More details can be found at https://www.fec.gov/help-candidates-and-committees/candidate-taking-receipts/loans-candidates/.

How is campaign spending monitored and enforced in the United States?

The Federal Election Commission (FEC) is the independent regulatory agency charged with enforcing federal campaign finance laws. It monitors campaign spending by requiring regular reporting of contributions and expenditures from campaigns, PACs, and other political entities. The FEC audits and investigates potential violations and can impose penalties for non-compliance. Their enforcement process is outlined at https://www.fec.gov/legal-resources/enforcement/.

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Discussion Comments

Terrificli

@Vinzenzo -- don't feel so bad. A lot of Americans feel just like you do about special interest groups. With that many people upset, there are things that individuals can do.

One trend that has evolved is that some politicians make a point out of refusing to take money from PACs and rely on small contributions from individuals instead. Thanks to the Internet, contributing a few bucks to those campaigns is easy.

Should that method of funding and what it represents catch on, there may be some politicians out there that will fight against special interests.

Vincenzo

Ugh. The good old "Citizens United" case. That thing set back campaign finance reform by at least a couple of decades. Because a lot of spending prohibitions have been removed on the basis that they violated free speech guarantees, more PACs have been established and those that already existed spend more money than ever.

Do government officials represent us or the special interest groups that fling money at them? That is a legitimate question and one that our Founding Fathers hoped we would never have to ask.

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    • Russell Feingold coauthored an amendment to the Federal Election Campaign Act.
      Russell Feingold coauthored an amendment to the Federal Election Campaign Act.
    • In public elections, individuals and groups have limits placed on the amount of campaign money they can give to one candidate.
      By: Corgarashu
      In public elections, individuals and groups have limits placed on the amount of campaign money they can give to one candidate.
    • State and local committees can pour unlimited amounts of money into grassroots activities such as voter drives.
      By: Lisa F. Young
      State and local committees can pour unlimited amounts of money into grassroots activities such as voter drives.