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Money and Politics

The cost and business of democracy in the United States.

Story Series
Simply Civics

Participating in a democratic society is not supposed to be a matter of dollars and cents, but indeed democracy has become a costly venture. Billions and billions of dollars are spent every election period to pay for the campaigns of those running for office at the local, state and national level. Unfortunately, injecting money into the electoral process has led to numerous problems from corruption of public officials to influence peddling by those seeking to sway the policy positions of those running for office or those seeking to retain their office. The role of money in American politics has become so dominant that questions are often raised about what really matters in our democratic system — the views and votes of the American people or the money spent to advance special interests.

Because the American electoral system is overwhelmed with money, politics paying for an army of campaign workers, legal counselors, specialized consultants, polling experts, media and Internet advertising, coast-to-coast travel and all those miscellaneous “extras” such as promotional hats and buttons is so costly that running for public office could not occur without sizeable cash contributions. For example, the cost of the 2020 election for President and Congress totaled $14.4 billion, which was more than double what was spent on the 2016 election. Add an additional $2.3 billion in campaign related expenditures and the cost to conduct elections (purchasing voting equipment and paying election workers) at the state and local level and it is obvious that democracy does not come cheap in the United States.

To pay for all the essentials of a political campaign, candidates and political parties rely on a mix of small donors, large individual contributions and multi-million-dollar transfers from what are called Political Action Committees (PACs) — corporate, interest group or political party related entities. In the 2020 election, small donors (providing on average $200) gave to Democratic candidates $1.8 billion, while the Republicans raised $1.1billion, which together was 23% of the contributions to campaigns. As to individual wealthy donors, the top 100 contributors were corporate executives and business leaders who donated $1.6 billion. And then the Political Action Committees, such as Donald Trump’s America First Action, which raised over $150 million, while Joe Biden’s Priorities USA Action raised over $100 million.

The connection between money and American politics has a long history going back to the days of Andrew Jackson and his “Spoils System,” where potential office seekers paid handsomely to get a government job. In the modern era, the connection between money and politics was influenced by the Watergate scandal during the Nixon administration. In the 1972 campaign for Nixon’s reelection, the Committee to Reelect the President (CREEP) was found to have engaged in illegal fundraising activities. The Watergate scandal led to a series of reform efforts in Congress to bring campaign spending under control. The Federal Election Commission was established to monitor campaign spending and set limits on campaign contributions to federal candidates. But with each step forward for campaign spending reform, there was often a step backward as either court decisions or loopholes in existing laws allowed money to remain a critical ingredient in the electoral process.

The efforts to create a system of campaign financing reform changed dramatically with the 2010 Supreme Court decision Citizens United v. Federal Election Commission. The decision expanded the amount of campaign contributions from PACs and placed few limits on private money to candidates. In effect, the Justices stated that campaign contributions by way of personal or corporate checks was a form of free speech protected by the First Amendment. The decisions strengthened the role of PACs in the electoral process and also led to the formation of so-called Dark Money organizations where donor contributions to candidates were allowed without the requirement of revealing the donors. Dark Money organizations are now one of the primary funnels through which contributions are directed to political candidates.

The growing role that money plays in election campaigns and the concerns over the influence of contributions on policy making has led to efforts to remove money from the process of national elections. Reform-minded groups in the United Stats point to countries such as the United Kingdom and Canada, which have strict public financing systems including limits on how much a candidate can spend and making advertising on television and other media free or inexpensive. While these measures are reasonable and would lead to lessening the corruption and influence peddling that are found in the American electoral system, they are not the “American way.” Reform measures have little if any chance of limiting the role of money in politics, because there is now a firmly imbedded system of election organization and process that resists change. Consultants, lawyers, pollsters, media outlets, and advertisers are so connected to campaigns and make enormous amounts of money for their services that reform would be next to impossible. Candidates for office and incumbents often quietly complain that they are tired of the constant efforts to raise money by traveling to dinners and other events to glad hand potential donors, but without these fundraising rituals politicians will likely face a cash shortage that will weaken their chances for winning the election. And so political leaders continue to cozy up to the rich and the special interests as they seek dollars for their campaigns to remain in office.

There is now a great deal of commentary in the media and academia about the state of democracy in our country and the threats from those who would weaken the ability of citizens to freely and fairly elect the political leaders to run the government. While casting ballots in elections is often viewed as the foundation of democratic practice and the source of political power, financial contributions to campaigns and politicians must be viewed as the critical ingredients in the electoral process. As the old adage states, “money talks” and those who provide the money have extraordinary influence on who wins elections and ultimately the policy process. Voting still matters and a politician who can sway voters can win public office and control the levers of power. But it is those who provide the financial means for the politician to win that have the most valuable tool of influence — access to the centers of government and with that access the ability to define policy outcomes. With voters their power is in the ballot box, but with those who make financial contributions, especially sizeable financial contributions, it is they who have a long-term edge in directing public policy and the nation.