The 2016 election has heard a lot of talk about campaign finance reform and the effect
of money in politics.
So, does money actually influence elections?
Well, to start, political expenditures have changed dramatically over the past few elections.
In 2000, outside spending on political campaigns was roughly fifty million dollars.
In 2012, it was more than one billion.
So what changed?
Well, in January of 2010, the US Supreme Court ruled in a case known as “Citizens United”,
which basically allowed unlimited political spending by individuals and corporations.
The way this works is that although the law sets a limit on contributions directly to
a candidate, there is no limit to indirect candidate contributions.
This is where the commonly used term “Super PAC”, or “political action committee”
comes in.
In election context, a Super PAC is an organization which takes in unlimited political donations,
usually in support of a specific candidate.
Although they are not allowed to coordinate with the candidate directly, this rule is
clearly, and openly ineffective.
This money is spent on things like events, staff salaries, even health insurance, not
unlike a business.
But generally, about 75% of funds go towards direct advertising: mail, radio, television
and Internet ads.
So, what does it mean that candidates can raise unlimited amounts of money?
It means they can win elections.
And this is distinctly noticeable in regional elections, even moreso than with Presidential
Elections.
During the 2012 races in the U.S. House of Representatives, nearly every single winner
had raised more money than their opponent.
However, the parallel between election performance and campaign spending isn’t necessarily
causing one or the other.
Some economists point out that successful candidates are not just good statesmen, they’re
good politicians.
Those who already have more supporters will naturally raise more money, and voters can
be unsure of spending money on a weak candidate.
One analysis by MIT economist Steven D. Levitt found that raising campaign spending only
had a marginal effect on final vote count.
And perhaps tellingly, that same year in 2012, each presidential campaign spent roughly 1
billion dollars each.
But when the votes came in, Obama won with only 51% of the vote against Romney’s 47%.
But on the other hand, although popular candidates may raise more money from their supporters,
the majority of money in politics comes from a very small pool of donors.
In fact, according to The Center for Responsive Politics, less than one quarter of one percent
of the US population accounted for two-thirds of the total amount of federal contributions
in 2014.
Moreover, only about 32,000 people, or just one percent of one percent of the population,
contributed a billion dollars, or nearly 30% of the 2014 federal contributions.
In the 2016 election, with the exception of Bernie Sanders, all other candidates have
actively sought the support of millionaires and billionaires to fund their campaigns.
Candidate Donald Trump is himself a billionaire.
It is clear that there is a concentrated group of people who are able to dictate which candidates
will be better funded, especially within Congress.
But as was seen in the 2012 election, although Mitt Romney’s campaign outspent Obama’s
by about $175 million dollars, he still ended up losing.
The real question about money in politics, is what the one percent of one percent expect
in return for their enormous contributions.
Luckily, it doesn’t cost a lot of money to have your voice heard, politically or otherwise.
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Super PACs have a huge role in political campaign donations.
For a deeper dive into about what they and how they actually work, check out our video.
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