William_T._Bianco,_David_T._Canon]_American_Polit

322 Chapter 9 | Elections

A second distinction in campaign finance laws is between hard money, meaning

contributions to a candidate, party organization, or other group that are intended to

help elect or defeat a specific candidate, and soft money, meaning funds that are used

for other activities and are not subject to the limits imposed on hard money. Groups

defined by IRS regulations as 527 organizations, for example, can raise unlimited soft

money from individuals or corporations for voter mobilization and for issue advocacy,

but these expenditures must not be coordinated with a candidate or a party. Ads by

527s cannot advocate the election or defeat of a particular candidate or political party.^43

Another type of organization, again described using the IRS code, is the 501(c)(4),

which often collects and spends soft money. The principal difference between 527s and

501(c)(4)s is that the latter type of organization does not have to disclose the names of

its contributors.

A third type of organization, the political action committee (PAC), is a group that

aims to elect or defeat particular candidates or a particular political party. A company

or an organization can form a PAC and solicit contributions from employees or group

members. As Table 9.3 shows, the amount PACs can give to each candidate in an

election is limited, but these limits pertain only to hard money. PACs can also form

527s, which can then accept unlimited amounts of soft money. So-called Super PACs

are PACs that do not donate to candidates but use soft money to make unlimited

independent expenditures in campaigns. Chapter 10 looks more closely at PACs, 527s,

and 501(c)(4)s.

As discussed in Chapter 8, political party committees are entities within the

Republican and Democratic parties. Both major parties have a national committee

and a campaign committee in each house of Congress. Party committees are limited

in the amount of hard money they can give to any given candidate’s campaign and in

the amount they can spend on behalf of the candidate as a coordinated expenditure.

But a party committee (and, after Citizens United, corporations and labor unions)

can spend an unlimited amount in independent expenditures to elect a candidate

or candidates.

Current law gives presidential candidates the ability to receive federal campaign

funding for the primary and general-election campaign (in the primary, these

are matching funds; in the general, they are a block grant). These federal funds

are generated, in part, by money that taxpayers voluntarily allocate out of the

taxes they pay to the federal government by checking off a particular box on

their federal tax return form. Funds are also given to minor political parties if

their candidate received more than 5 percent of the vote in the previous election.

However, in order to accept federal funds, presidential candidates must abide

by overall spending limits (and, during the nomination process, by state-by-

state spending caps). During the last two presidential campaigns, all the major

candidates decided against accepting these funds during the nomination and

general-election campaign, which meant that they were not bound by the spending

caps (although individual contributors were still limited to the amounts shown

in Table 9.3).

The Effects of Money in Politics Campaign finance regulations reflect two

simple truths. First, any limits on campaign activities involve balancing the right

to free speech about candidates and issues with the idea that rich people or well-

funded organizations should not be allowed to dominate what voters hear during the

campaign. Second, an enormous amount of money is spent on American elections.

Table 9.4 shows the amount raised by candidates, political parties, and others in 2016

hard money

Donations that are used to help elect

or defeat a specific candidate.

soft money

Contributions that can be used for

voter mobilization or to promote a

policy proposal or point of view as

long as these efforts are not tied to

supporting or opposing a particular

candidate.

Candidates, parties, and

organizations spent a total of

$5.2 billion

during the 2017–2018 election cycle.

Source: Opensecrets.org

DID YOU KNOW?

Political action committees spend

millions on campaign advertising.

Often, their ads are highly negative.

This one attacks Donald Trump for

being homophobic in his rhetoric.

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