Campaign Finance

Introduction

Despite being a leading democracy in the world, American politics have been dodged by various issues and financing political party campaign is one of those issues which greatly hamper the growth of our democracy. The issue of campaign finance has been compounded by fact that the more the rich contribute to political parties, the more they get in return. Elite theories of democracy assert that the rule of elite is inevitable and through many have tried to refute their claim campaign finance is the best yardstick that can be used to prove or refute their claim. After an election, hundreds of rich and interested groups descend on Washington like locusts in demand for a favor in return for their prior contribution. To prove the elite theorists right, we are ruled by a few powerful individuals holding office in custody of their political parties which are under the influence of the rich and influential.

This is the main reason why the U.S. congress has come up with proposition to carry major reform in financing our political parties such that we make them void to influence of the rich. This has been aimed at ensuring that candidates spend a good amount of their time selling their political agendas rather than meeting rich individuals and corporate to raise money for their campaign. However in a representative democracy this amount of contribution to politic party has its place since every side has to do its best to sell its policies than others. This means that every political party in campaign needs good funding to sell its political agenda. At the same time this may influence the interest of the contributors to the running of the political parties and therefore the needed reforms. The special interest money has a crucial role in the cause of political campaign

Campaign financing in United States

In order to understand subject well, we have to look deeply at campaign financing in the country.  Campaign financing is the money which is raised to be used in election campaign. Campaigns are very expensive and a candidate will need money to travel from one area to another, to purchase air for placing TV advertisements, and for many other uses. [1]In most cases, the political party cannot meet all these expenditures. At the same time placing campaign funding in the hands of the government means getting more from the taxpayers. Therefore, political parties are left with not option than to seek the contribution from their supporters.

The basis assumption in political party funding is that donors usually fund those candidates who they have reached an agreement with. However it has been argued that most donors do not give out of their interest but there is a form of agreement in which they expect to be rewarded in return for their contribution.  Most political analysts have actually equated political party campaign with political corruption or political bribery.

When their sponsored candidates assume office, political parties will expect to be compensated for the contribution although it many not be monetary term. They will be expecting to receive favors in the drafting of policies and in other areas where they are interested in. Analysts have argued that some leaders holding political offices find themselves in a dilemma of working to the will of the people and serving the interest of their donors. They become captive of the donors in a way that they cannot make independent decisions.

Therefore there have been proposition that we need some reforms in campaign financing.  Governments have been seeking ways of reforming the fundraising sources and techniques in order to eliminate the perceived influence tied to donors’ interests.  These reforms have also been seeking to see the government rather than the private sector plays a major role in campaign financing.

For a long time in the history of the United States, federal election campaigns have been unregulated. [2]However there were laws like the Pendleton Act and the Hatch Act which made initial attempts to regulate funding  an therefore limit the influence of money in the US political campaigns. However the laws were largely ignored and money has always been a key tool in influencing the outcome of political campaigns.  For example records show that in 1777 James Madison who was running for Virginia legislature lost the seat since he refused to prove alcohol to the voters. However the Watergate affair was a waking up call which made the congress to enact the Federal Election Commissions which monitors spending on political campaigns.

Therefore there are two broad campaign financing method that we have just mentioned, private financing and government financing. Let us look at each source.

Private financing has been used in most democratic countries. [3]Though criticized, it has been a major source of political campaign funding not only in the United States but also in other major democracies in the world. In private financing, political parties and their election staff together with the candidate are likely to spend a large amount of their time running from office to office or corporate to corporate seeking for funds to run their campaign.  In one of surveys carried out in the united states, it was found out that 235 of the political party offices spend more than half of their time soliciting fro funds while half of the political party candidates surveyed spent more than a quarter of their time soliciting for campaign funds.

Private funding uses different tactics to solicit more funds from corporate and individuals.  They can use direct mails, encouraging the supporters to fund the political campaign through the internet or mass media, direct approach to the candidate for funds, high priced events like parties, and many others. [4]The aim of private funding is to solicit as more funds as they can from the private contributors.

However, most countries which have used this method have also put strict measures like extensive disclosure of their donations which may include such information like names, the employer and the address of the donating party.  This is intended to allow for policing any influence of the donor from other campaign or may be other good governance groups.

[5]Private funding is very popular the federal level in the United States.  It is commonly regarded as bundling where the candidates gather funding from different organization and individuals.  The main source of funding is from individual, mainly political actions committees and perhaps a distant second.  However the amount of contribution that can be solicited from bother the Political Action Committee and the distant second are much limited.

In the United States there are two important private funding sources, hard money and soft money. Hard money is that one that is contributed directly to the candidates or directly to the politic party.  This money is usually under hard regulation by federal laws administered by Federal Election Commission.  [6]On the other hand soft money includes the money that his contributed to the organization and to committees instead of the political candidates or the politic party. This money which is contributed to the organization, famously regarded as 527s, may not be directly used in promoting the election of the candidate who is running on the political party. Under the federal regulations, there is not regulation on the amount of money that can be contributed but there is a regulation on how the money is spent.

Since 2002, federal regulations on soft money made it difficult to solicit and use contributions from corporations. Therefore bundling became very important. Under campaign bundling individuals gather money from the willing individual contributions and the present the whole sum to the campaign.  This method gained popularity due to limitation on the amount of individual contribution which has been set at $2300 for every election which is $4600 in total for both the primary and general election.

Although private funding has been argued to encourage corruption when the supported candidate assumes office, it has been important in meeting the financing demand of most parties. As we argued before, the contesting candidates spend a lot of money selling the political ideals of the party. This means that to carry out an effective campaign, the political party will need to raise enough money to cover all its expense.  [7] Private funding is important in helping the individual to meet their campaign fund demand. It has also been important in reducing the amount of government funding which is perceived odious by the citizens.

The other source of funding is government or public financing. Under this financing, the government usually contributes to the operation of the political parties and funds a part of their campaign.  [8]This method of funding is widely used in Europe and South America but it is also used in the United States. The implementation of public financing is widely varied and may range from a direct subsidizing of the political party to the matching of the private donation by the government. Public financing is widely supported by many people as it leads to efficient running of political parties with reduced incidences of corruption.  It is also widely supported for promoting civic participation and cultivates faith in the political parties. However public financing may not only be deliver in form of money but can also be given in form of campaign materials life subsidize air time on television  and many others.

[9]In United States, public funding is usually limited to amount of subsidies which are given to the presidential candidate. For a candidate to receive some subsidies during the primary, one must qualify by raising $5000 privately from not less than 20 states.  The government will then provide a dollar for a dollar match to a limit of $250 per every contribution.  However the candidate is then must agree to limit their spending.

This method has fallen out of favor with most leading presidential candidates. Since 1992, most leading presidential candidates have refused to accept public funding in preference for private funding. This may be due to the limitations that come with it in statutory formula where the candidates have to limit his or her spending.  However the government also subsidizes presidential nomination conventions under which the nominated candidates are then offered a chance to accept government funding for their campaigns.  They are then not allowed to raise or to spend their private funds. Since the program was started, not party candidate has turned down the funding until 2008 when democratic Barrack Obama did so.

The initial structure for this funding had been contributed mainly by the individual $3 tax check off on the individual returns. since the  program was launched in 1980s, the number of individual who are directing their money towards the political party funding have reduced significantly which shows that  individual are falling out of favor with this method. By 2006, there not more than 8 recent of the taxpayers who were directing their money towards this funding.

Comparing the two methods, there are all reasons why most candidates have therefore preferred to use private funding instead of government funding. First as we highlighted earlier, an effective campaign is all about money.  [10]The more funds that a party raises, the more it is in a position to hold an effective campaign. It is for this reason that most candidates have preferred to use private funding since they have fewer limitations on the amount they are going to collect and fewer restriction on how they are going to use it. On the other hand, public financing is important since it reduces the effective of elite rule but on the other hand it comes with restrictions and not many citizens are willing to continue directing their money towards campaign funding. Comparing the effectiveness of the two, we still have a long way to go if public financing with become a viable option over private funding.

Campaign finance reforms

The thorny issue of campaign financing has been debated far and wide in the country.  Since 1867 there were legislation which were aimed at regulating campaign finance but the first successful attempt came in 1970s with the enactment of the Federal Election Campaign Act (FECA) 1972 which required all the candidates to disclose the amount of money that had been given and how they used the money.  In 1974, there were legal limits that were introduced and crated Federal Election Commission.  This limited the wealthy contribution to only $2000 and Political Action Commits to $5000 only which means that the reforms were targeting hard money.

However major reforms came in 2002 with the enactment of the Bipartisan Campaign Reform Act which come up with limits on legal expenditure that had been enacted in 1974. This reform banned soft money but also doubled the hard money limits for individuals.  [11]The restriction on soft money has a lot of implications on the way campaign funds are raised since most of the campaign funding comes from the political parties.  However in 2003 the federal court declared the restrictions on the soft money as unconstitutional and a great hindrance to the concept of free speech on political campaign advertisements. However the restrictions on soft money were repealed and the court favored the upholding of the provision.

The current restrictions affect the way political parties raise campaign for their funds. Although this campaign was intended to raise the level of confidence on politico parties and decrease the level of influence of elite rule, we are not yet arrived at a solution for campaign funding. [12]Not many of use are willing to direct a portion of our tax return to the political campaigns which means the issue remain. Limiting the amount of contributions and how it will be used is the same as trying to eradicate mental illness through reduced number of beds in mental hospitals. Proper campaign reforms will require philosophical approach through which we replace “public interest” with principles like individual rights. We need to replace out mixed economic with real capitalist where there are no tariffs, no subsidies, no favors and no protection from competition. This will reduce the influence of the elite

Conclusion

Campaign financing refers to the amount of money that is used to finance the campaign for an election. There are two principle form of camping financing which include private and public financing. Private financing include individual and corporate contribution and in the United States it is divided between soft money and hard money. On the other hand public financing include financing campaigns through taxpayers money.  In the recent past, private financing has become more important than public financing owing to the restriction that comes with public financing. The recent reforms in campaign financing have limited the amount of soft money in donation and use while increasing the amount of hard money. However these reforms have not helped to deal with the problems of elite rule, we need to come with philosophical changes and replace the concept of public interest which is vested in policies on tariffs and favor with principles that uphold individual rights. We need to come up with a true capitalism economy that is free do elite influence.

References

Ackerman, B.  & Ian, A. (2004). Voting with Dollars. Yale University Press

Birnbaum, J. (2000). The real story of fund-raising influence on political power in America. Crown Books

Clawson, D. & Neustadt, A. (1998). How Business Campaign Contributions Subvert Democracy. Temple University Press

Gill, D. & Lipsmeyer, C. (2005). Soft money and hard choices. Public Choice

Green, M. (2004). How Big Corporate Money Buys Elections, Rams Through Legislation, and Betrays Our Democracy. Regan Books

Locke, E. (1999): How to achieve campaign finance reforms. Retrieved 12^th December 2008 from http://www.capmag.com/article.asp?ID=220

Malbin,  J. (2006). The Election after Reform: money, politics, and the bipartisan Campaign Reform Act. Rowman & Littlefield Publishers

OpenSecrets.org, (208). Elections: Campaign finance reform. Retrieved 12^th December 2008 from http://www.opensecrets.org/payback/issue.php?issueid=CFR&congno=107

Smith, B. (2001). Unfree Speech: The Folly of Campaign Finance Reform. Princeton University Press

Smith, R. (2006). Money, Power & Election: how campaign finance reform subverts American democracy. Louisiana State University Press

[1] Smith, R. (2006). Money, Power & Election: how campaign finance reform subverts American democracy. Louisiana State University Press

[2] Smith, R. (2006). Money, Power & Election: how campaign finance reform subverts American democracy. Louisiana State University Press

[3] Green, M. (2004). How Big Corporate Money Buys Elections, Rams Through Legislation, and Betrays Our Democracy. Regan Books

[4] Clawson, D. & Neustadt, A. (1998). How Business Campaign Contributions Subvert Democracy. Temple University Press

[5] Smith, R. (2006). Money, Power & Election: how campaign finance reform subverts American democracy. Louisiana State University Press

[6] Locke, E. (1999): How to achieve campaign finance reforms. Retrieved 12^th December 2008 from http://www.capmag.com/article.asp?ID=220

[7] Malbin,  J. (2006). The Election after Reform: money, politics, and the bipartisan Campaign Reform Act. Rowman & Littlefield Publishers

[8] Ackerman, B.  & Ian, A. (2004). Voting with Dollars. Yale University Press

[9] Green, M. (2004). How Big Corporate Money Buys Elections, Rams Through Legislation, and Betrays Our Democracy. Regan Books

[10] Birnbaum, J. (2000). The real story of fund-raising influence on political power in America. Crown Books

[11] Gill, D. & Lipsmeyer, C. (2005). Soft money and hard choices. Public Choice

[12] Ackerman, B.  & Ian, A. (2004). Voting with Dollars. Yale University Press