21.2.1 Campaign Finance Role and Key Legislation: McCain-Feingold and Citizens United

Campaign Finance in U.S. Elections

Campaign Finance Overview:

Campaign finance refers to the funds raised and spent to promote candidates, political parties, or policies in elections. It has been a contentious issue in U.S. politics, with various reforms aimed at reducing the influence of money on political outcomes.

Key Reforms and Legislation

1971: Federal Election Campaign Act (FECA)

1974: Amendment to FECA

• Created the Federal Election Commission (FEC) to enforce campaign finance laws.
• Imposed limits on direct contributions: $1,000 per candidate per election and $25,000 total per year for individuals; $5,000 per candidate and $15,000 per year for PACs.
• Required detailed disclosure of funding sources and spending.

1976: Buckley v. Valeo

• A landmark Supreme Court ruling that struck down certain provisions of FECA, particularly limits on campaign spending, citing First Amendment rights.
• Led to the creation of 527 organizations, which can raise unlimited funds for issue advocacy, though not directly linked to a candidate.

1979: Soft Money Loophole

• Congress weakened FECA by allowing political parties to raise "soft money", which is not subject to federal limits and can be used for party-building activities, rather than directly supporting a candidate.
• Resulted in unregulated sums of money influencing the political process.

2002: Bipartisan Campaign Finance Reform Act (McCain-Feingold Act)

• Banned the use of soft money by national political parties.
• Increased individual contribution limits.
• Restricted "issue ads" funded by corporations or unions within 30 days of a primary or 60 days of a general election.
• Despite these restrictions, the rise of 527 organizations allowed for continued significant spending on issue advocacy without direct candidate endorsement.

2008: Obama Opts Out of Public Financing

• Barack Obama became the first major candidate to opt out of the public financing system, raising over $750 million in private donations, compared to McCain's $84 million in public funds.

2010: Citizens United v. FEC

• Supreme Court ruling that removed restrictions on corporate and union spending on political campaigns, citing First Amendment rights.
• Led to the creation of Super PACs, which can raise and spend unlimited amounts of money, although they cannot directly coordinate with candidates' campaigns.

2014: End of Public Financing for Party Conventions

• President Obama ended public financing of political party conventions, further shifting campaign financing to private sources.

2020: Record Expenditure

• The 2020 election saw unprecedented spending, with an estimated $14 billion spent across all campaigns, a sum greater than the GDP of some small countries.

Impact of Campaign Finance on Election Outcomes

• Wealthier candidates often have a significant advantage. For example, in 2020, Joe Biden out-fundraised Donald Trump and won the election. In Arizona, Democrat Mark Kelly spent $30 million more than Republican incumbent Martha McSally and won the Senate seat.
• Money isn't always decisive. Despite significantly outspending Donald Trump in 2016, Hillary Clinton lost the election. In South Carolina, Democrat Jaime Harrison outspent Republican incumbent Lindsey Graham by over $40 million but still lost the race.

Arguments for More Regulation

• Reducing the Influence of Wealthy Donors: Wealthy donors can disproportionately influence policy, as seen with Trump's environmental policies potentially being influenced by donations from the fossil fuel industry.
• Promoting Transparency and Trust: Many voters believe elections are influenced by hidden financial powers, undermining the principle of equal representation. The concept of "dark money" and the use of 527 organizations contribute to this concern.
• Improving Democracy: Campaigns heavily dependent on money may not reflect the true will of the people, as seen with Bernie Sanders in 2020, who struggled despite significant grassroots support.
• Equal Representation: Campaign finance regulation is needed to ensure that elections are not just about who can raise the most money, but about representing the will of the electorate.

Arguments Against More Regulation

• First Amendment Rights: Regulation could infringe on freedom of speech and political expression, as argued in Citizens United v. FEC.
• Enforcement Challenges: Effective regulation is difficult to enforce and can lead to unintended consequences, like the rise of unregulated funding sources post-McCain-Feingold.
• Impact of Finance is Overstated: The 2016 election showed that Trump won despite being outspent by Clinton, indicating that factors other than money, like personality and political strategy, can be more decisive.
• Money Follows Strong Candidates: Rather than creating strong candidates, money often follows those who are already strong and viable, making it a less decisive factor in winning elections.

Timeline of Campaign Finance Reforms and Supreme Court Rulings

Year	Event/Legislation	Description
1971	Federal Election Campaign Act (FECA)	Established disclosure requirements for contributions and spending limits to equalize campaign financing.
1974	Amendment to FECA	Created the Federal Election Commission (FEC) and imposed limits on direct contributions; required disclosure of funds.
1976	Buckley v. Valeo	Supreme Court ruling that declared certain provisions of FECA unconstitutional, allowing unlimited personal spending by candidates.
1979	Soft Money Loophole	Congress allowed political parties to raise unregulated soft money, diluting FECA's impact.
2002	Bipartisan Campaign Finance Reform Act (McCain-Feingold Act)	Banned national party soft money, increased individual contribution limits, and restricted issue ads close to elections.
2008	Obama Opts Out of Public Financing	Barack Obama opted out of public financing, raising over $750 million in private donations.
2010	Citizens United v. FEC	Supreme Court ruling that allowed unlimited corporate and union spending on elections, leading to the rise of Super PACs.
2014	End of Public Financing for Party Conventions	President Obama ended public financing of political party conventions.
2020	Record Election Spending	The 2020 election saw unprecedented spending, with an estimated $14 billion spent, influenced by Super PACs.