Campaign Finance Reform
The money that finances a political campaign has tremendous influence on who runs for office, how that person campaigns, and if
elected, on how that person prioritizes constituent interests. Critics content that each time Congress has passed a law designed to limit
campaign contributions and spending from any one individual or group, contributors have found "loopholes" which let them avoid
legal restrictions. Additionally, the Supreme Court has ruled that absolute limits on federal campaign spending violate the First
Amendment to the Constitution.
Congress's most recent effort to enact campaign finance reform is the Bipartisan Campaign Reform Act of 2002, also known as the
McCain-Feingold Bill. Among other provisions, the law bars political parties from raising and spending "soft money" contributions
from businesses, labor unions, and individuals. As a result, contributors have given millions of dollars to so-called independent
organizations that engage in political activities. One congressman described the growing number of independent organizations as "the
greatest threat to the federal election process we have ever seen." (WASHINGTON POST, "New Fundraising Scrutinized", November
Political Action Committees (PACs): Organizations established by businesses, labor unions, and interest groups to channel financial
contributions into political campaigns.
Buckley v. Valeo, 1976: Landmark Supreme Court case involving the constitutionality of the Federal Election Campaign Act of 1971,
as amended in 1974. While the Court upheld limits on contributions to candidates for federal office, it ruled that overall limits on
spending by federal candidates and their committees violated the First Amendment. For more information see Hoover Institution,
Campaign Finance: Buckley v. Valeo
"Hard" Money: Political contributions that are restricted by election laws.
"Soft" Money: Unregulated contributions to political parties that are theoretically spent on "party-building activities", such as "issue
ads" and "get out the vote" campaigns. Such spending is sometimes called a major loophole in federal campaign spending law. For
more information, see Common Cause: Campaign Finance Reform; Center for Responsive Politics: Soft Money; and National Center
for Policy Analysis: Effects of the Proposed Campaign Finance Law.
Issue Ads: Advertisements that purport to inform citizens about political issues. Critics claim that such ads - paid for with unregulated
funds - are used to influence the outcome of elections. For more information, see NOW with Bill Moyers: Interview with Kathleen
Hall Jamieson; and WASHINGTON POST: Court Challenge Likely if McCain-Feingold Bill Passes
Public Financing of Presidential Campaigns: Under the 1974 amendments to the Federal Election Campaign Act of 1971,
presidential candidates can receive government subsidies if they accept spending limits. Currently, they can obtain as much as $18.6
million in public subsidies for their campaign through the nominating conventions. In return, they must agree to a $45 million
spending limit during that period as well as spending caps in individual states. For the general election, party nominees receive about
$75 million in public money. During the 2004 election campaign, President Bush and Democratic candidates Howard Dean and John
Kerry refused to accept public funding for the presidential campaigns so that they could raise more money than the rules permit.
Bipartisan Campaign Reform Act of 2002 (BCRA), Public Law 107-155, also known as the McCain-Feingold Bill: The law,
passed on March 27, 2002, places new restrictions on soft money and issue ads. For more information review Federal Elections
Commission: Bipartisan Campaign Reform Act of 2002; and Common Cause: Campaign Finance Reform. For a full text of the law,
see NOW with Bill Moyers: The Clean Election Movement and the "Bipartisan Campaign Reform Act of 2002".
McConnell, Mitch, et al. v. Federal Election Commission, 2003: An amalgamation of 11 suits argued that the BCRA limits First
Amendment rights. In a 5-4 ruling, the Supreme Court upheld the BCRA on the key issues of banning "soft-money" contributions and
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limiting "issue ads." For more information, see NOW with Bill Moyers: Campaign Finance in the Supreme Court; and a legal brief of
the case from On the Docket: Medill School of Journalism
Citizens United v. Federal Election Commission, 558 U.S. _ (2010), was a landmark decision by the United States Supreme Court
holding that the First Amendment protects corporate and union funding of independent political broadcasts in candidate elections. The
5–4 decision originated in a dispute over whether the non-profit corporation Citizens United could air a film critical of Hillary Clinton,
and whether the group could advertise the film in broadcast ads featuring Clinton's image, in apparent violation of the 2002 Bipartisan
Campaign Reform Act, commonly known as the McCain–Feingold Act in reference to its primary Senate sponsors.
Part I. How much money do Americans spend on political campaigns? (Homework)
1. Have you received political literature in the mail or seen any campaign ads on TV. Has anyone called your house urging family
members to vote? Have you attended a political rally? These and other aspects of political campaigns cost money-lots of it. For
example, a single 30-second TV advertisement can cost $100,000. (WASHINGTON POST, "Bush Ad Criticizes Democrats on
Defense," November 22, 2003)
2. Examine the following information:
According to the Center for Responsive Politics, a tight race for the House of Representatives cost approximately $1.5
million to $2 million in 2000. The average cost was $840,000.
Huge spending in New Jersey and New York in 2000 raised the average cost of a Senate seat to $7.3 million.
A study by Common Cause reveals that before the Bipartisan Campaign Finance Reform Act took effect on November 6,
2002, the Democratic and Republican Parties raised a record-breaking $470.6 million in soft money during the 2001-2002
election cycle. In the 2000 cycle, Democrats raised $219,343,172 in soft money, while Republicans collected $243,780,583
in unregulated funds.
3. Add data to this list for how much money federal candidates in your state raised and spent in the 2003-4 election cycle. You can
find this out by visiting the Web site for the Federal Election Commission. (Click on "Candidate and PAC/Party Summaries".)
Students can also find out the net receipts and expenditures for candidates during the 1999-2000 and 2001-2 election cycles.
4. Form hypotheses about the effects of costly political campaigns on the democratic process by answering the following questions:
Does the prospect of raising huge sums of money discourage well-qualified persons from running for office?
What could incumbents do instead of spending time raising campaign funds?
Are candidates politically obligated to wealthy contributors?
Part II. Do wealthy contributors "buy" government influence? (homework)
1. Less than 1 percent of American voters give contributions of $200 or more to candidates, according to the National Voting Rights
Institute. Roughly one-tenth of one percent gives $1,000 or more to a candidate for federal office, a political party, or a political action
committee. What does this small group of wealthy contributors get in return?
2. To answer this question, examine the original internal documents from the Republican and Democratic Parties found at NOW with
Bill Moyers: Campaign Finance File. These documents include personal letters and e-mails that reveal party officials discussing policy
issues with wealthy contributors and offering them access to elected officials. Since there are 29 documents, each of you should read
one document and summarize its content. Additionally, students may read a related NEW YORK TIMES editorial by Adam Cohen at
the Democracy 21 Web site: Court Case Documents Show Money Buys Influence. NOW also has a feature on tracking campaign
donations in this cycle, see Campaign Finance 101.
3. You should be able to explain who the parties are to the communication (i.e., Republican Party and Bristol-Myers Squibb,
Democractic Party and Texaco), what type of communication it is, how the campaign contributor hopes to influence government, and
how successful that person or group is. Draw conclusions about the influence of wealthy campaign contributors on government.
Part III. Should the government limit campaign contributions and spending? (In-class)
1. Not everyone agrees that there should be limits on campaign contributions and spending. Identify the arguments against campaign
contribution and spending limits by reviewing articles from these sources:
National Center for Policy Analysis: Campaign Finance Reform
The Cato Institute: Money and Politics
2. Brainstorm with students the pros and cons of campaign finance reform.
Arguments in favor of contribution and spending limits include:
Wealthy individuals, unions, corporations, and interest groups use political contributions to advanced their own legislative
agendas, undermining the will of the people.
Wealthy contributors may actually determine who is elected to office.
The need to raise large amounts of money may discourage qualified persons from running for office.
Preoccupation with money-raising may keep office holders from doing their jobs.
Arguments against limits on campaign contributions and spending include:
Placing caps on campaign spending is an unconstitutional limit on freedom of speech.
Spending limits could prevent lesser-known challengers from getting their message out.
Attempts to reform campaign financing often create new problems. Examples: 1) The Federal Election Campaign Act of
1971 created Political Action Committees (PACs), which generated even higher levels of campaign spending by interest
groups. 2) To avoid provisions of BCRA, wealthy donors are giving huge sums to independent organizations that engage in
Campaign reform can be achieved by relying on complete disclosure of fund sources rather than spending limits or public
financing of political campaigns.
You can find all these arguments in greater detail from NOW's campaign finance reform resources. Discuss the merits of both sides, or
form teams to debate the issue. An optional debate rubric is included in the Materials Needed section of this lesson plan.
Part IV. What is the best way to finance elections?
1. As a culminating activity, work with a partner or in groups to devise realistic plans for achieving a campaign finance system that
balances all concerns. The plans may be presented in a panel discussion or as bills in a mock Congress.
Explore the following:
The Clean Money Campaign Reform, which is in force in Arizona, Massachusetts, Vermont and Maine. Under the system,
candidates who raise a high number of small contributions from voters in their districts or states receive public subsidies for
primary and general elections. Learn more at NOW with Bill Moyers: The Clean Election Movement.
A bill to revise public financing of Presidential campaigns introduced by Senators John McCain and Russ Feingold on
November 21, 2003. See Democracy 21: Summary of Presidential Funding Act of 2003 Bill. See also CNN: Lawmakers
Seek Overhaul of Presidential Public Financing.
A plan for providing complete disclosure of political fund sources. Read the Wall Street Journal article from June 14, 1996,
"Campaign Reform: A Better Way," by Professor Larry J. Sabato (University of Virginia) and Glenn R. Simpson. See also
NCPA: Full Disclosure Campaign Financing.
NOW with Bill Moyers viewers' suggestions for reforming campaign financing at What Money Buys: Viewer Suggestions.
Finally, students should review the provisions of the Bipartisan Campaign Reform Act of 2002. They may use sources on
BCRA cited earlier in this lesson.
2. After the plans are presented, decide as a class which proposals could actually reduce candidates' reliance on wealthy contributors
and still preserve Americans' right to freedom of expression.