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Are We Paying Too Much For Elections? - Facts & Infographic

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During the 2012 election season, an estimated $6 billion will be spent on the U.S. presidential elections, making this the most expensive election in history to date. The race to raise private funds in lieu of publicly funded campaigns has become a central aspect to every campaign – often outshining the real issues at stake.


The airwaves are saturated with advertisements – especially in swing states – causing many voters to stop paying attention altogether. With the recent changes in the way campaigns are financed and the rise of the Super PAC, most advertisements have turned negative, attacking a candidate or specific issues rather than attempting to inform and educate voters.


While funds for advertisements, campaign tours around the country, rallies, a team of supporters and consultants may be necessary to remain competitive in today's political world, the exponential rise in election spending has caused many to wonder – Is election spending getting out of control?


The Problem with Spending

Campaign fundraising has been shown to have a large impact on the outcome of the election, and money usually wins. An obvious explanation for this is that the candidate with the most resources can do more to persuade the people, essentially buying the election. Freakonomics experts Steve Levitt and Stephen Dubner have analyzed this phenomenon and Dubner offers an alternate explanation for why this occurs: “It’s just that the kind of candidate who’s attractive to voters also ends up, along the way, attracting a lot of money.”


Money has the potential to corrupt political elections, with many voters believing that campaign financiers are buying influence on the candidates. With contributions from political action committees (PACs), special interest groups, corporations and unions can make nearly unlimited donations to independent campaign funds.


Some Americans feel disenfranchised by the high spending campaigns of today, believing that their votes won't matter because the elections are sold to the highest bidder.


On the other hand, some argue that with the high stakes of these elections, we're not spending enough. If you look at election spending per capita, the numbers pale in comparison to everything else we spend. But can Americans justify the massive amount of money spent on elections every four years?


How Are Campaign Funds Spent?

Total Campaign Expenditures in 2012 (Republicans and Democrats Combined)


$354.8 million


$178.5 million

Campaign Expenses

$93.1 million


$85.4 million


$9 million


$5.4 million

The largest portion of campaign funds, about 49 percent of the total, have gone to media, which includes advertisements for broadcast, internet, and print. Administrative costs make up almost a quarter of the total, and include the campaign team salaries, travel, and consultants, among other administrative expenditures.


Expenses for the campaign itself, including the events, consultants, polling and research, make up about 12.8 percent of total campaign funds spent. Fundraisers themselves cost about 11.8 percent of the total funds.


Where Does the Money Come From?

The 2012 presidential election is the first election since 1972 that is completely financed by private donors. While public funds are available to candidates who qualify, these funds put a limit on the total amount the candidates are allowed to spend.


In the 2008 campaign season, Obama was the first presidential candidate to opt out of public financing since the campaign reform. Instead, Obama chose to raise funds for his own campaign, which resulted in a total of $778 million for the general elections. McCain, on the other hand, used public funds and was limited by the $84 million cap that public financing allows. These caps are only for the candidate's direct spending, however, so the party itself and other organizations can continue to fundraise and spend on the campaign as they choose.

Campaign funds come from four main sources:

Small individual contributions (less than $200)

Large individual contributions (more than $200)

Political Action Committees (PACs)



Total Funds and Donors

Source: http://www.opensecrets.org/pres12/index.php

All candidates: $1,045,900,000



Barack Obama

Mitt Romney














Top Contributors:

These funds come from PACs, individuals, employees, owners, or family members associated with these organizations, not the organizations themselves.

Barack Obama

University of California


Microsoft Corporation


Google Inc


Harvard University


US Government



Mitt Romney

Goldman Sachs


Bank of America


Morgan Stanley


JPMorgan Chase & Co


Credit Suisse Group



Federal Election Campaign Act

In 1971, Congress passed the Federal Election Campaign Act, which set requirements for campaign finance disclosure for candidates, political parties, and political action committees. Later amendments to the act created the Federal Election Commission to regulate campaign spending, placing caps on individual contributions to the candidates directly, contributions by PACs, total campaign expenditures, and independent expenditures by organizations or individuals.


However, the act allowed for unlimited spending on certain activities that are not directly promoting the party's candidate, such as advertisements encouraging people to vote, or regarding specific issues. This opened a loophole and unlimited spending was quickly abused – issue ads became candidate-support ads in every way but name. Unions and interest groups were exempt from the limits, and were able to spend their money running ads to support their candidate without declaring it to the FEC.


Bipartisan Campaign Reform Act of 2002 (McCain-Feingold Act)

The Bipartisan Campaign Reform Act of 2002 amended the FEC Act of 1971. The reform prohibited political parties from using soft money, and state and local parties could not be financially involved in federal elections. Along with this, corporations and unions could not buy commercial space 30 days before a primary, or 60 days before a general election. The most obvious change from this reform was that candidates were required to appear in each ad to endorse the message, adding “I'm and I approve this message” to their ads. This “stand by your ad” regulation has caused more positive messages to be aired, which have helped to instill confidence in the viewers about the message.


The Reform Act also exempted non-profits created for political promotion who were not businesses and did not accept contributions from corporations or unions, as well as nonprofit organizations (referred to as 527 organizations – their tax code), whose spending is not regulated by the FEC if the candidates are not working in coordination with them.


Citizens United v. FEC (2010)

The U.S. Supreme Court decision Citizens United v. FEC as well as the Washington D.C. Circuit Court of Appeals decision SpeechNow.org v. FEC have made huge changes to campaign finance law.


The courts held that Congress could not limit contributions to independent organizations that were not coordinated with the candidate. The Supreme Court reasoned that corporations were protected by First Amendment rights to have freedom of political speech, and as such, there should be no limit to their spending.


This ruling led to the rise of the Super PAC – independent-expenditure organizations that can now raise unlimited funds from individuals and corporations, using those for electioneering ads, as long as they are not coordinated directly with the candidate.


Obama's response to the 2010 decision: "With all due deference to separation of powers, last week the Supreme Court reversed a century of law that I believe will open the floodgates for special interests –- including foreign corporations –- to spend without limit in our elections. I don't think American elections should be bankrolled by America's most powerful interests, or worse, by foreign entities. They should be decided by the American people. And I'd urge Democrats and Republicans to pass a bill that helps to correct some of these problems.”


The Future of Campaign Spending

The extreme and negative nature of the slew of attack ads during this 2012 presidential election season have caused trouble to both Republicans and Democrats, causing many political leaders to reexamine the 2010 Supreme Court ruling on corporate spending.


Though the ruling is believed to benefit the Republican Party, allowing their campaigns to outspend the Democrats, the negative ads have done their damage to the candidates just the same. While First Amendment rights must continue to be upheld, members of both major political parties are beginning to agree that something needs to change in campaign finance laws. Once Election Day 2012 is over, Congress may push the question: Is campaign spending is getting out of hand?


Do campaign finances decide elections?

Are We Paying Too Much For Elections.

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