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Campaign finance in the United States – how does it work?

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Campaign finance in the United States – how does it work?


The financing of electoral campaigns at the federal level in the United States is supervised by the Federal Election Commission (FEC), an independent government agency. Most campaign spending is privately financed, but to some limited extent, public financing is available for qualifying candidates for President of the United States during both the primaries and the general election.

In 2008, the last presidential election year, candidates for office, political parties, and independent groups spent a total of $5.3 billion on federal elections. The amount spent on the presidential race alone was $2.4 billion, and over $1 billion of that was spent by the campaigns of the two major candidates: Barack Obama spent $730 million in his election campaign, and John McCain spent $330 million.

The money for campaigns for federal office comes from four broad categories of sources:

1 – Small individual contributors (persons who contribute $200 or less)

2 – Large individual contributors (persons who contribute more than $200)

3 – Political action committees and civic groups

4 – Self-financing (the candidate’s own money).

An individual may give up to $2500 directly to a candidate and up to $30,800 to a national party committee. Federal law also restricts what organizations may contribute to candidates, campaigns, political parties, and other FEC-regulated groups.

Corporations and unions are barred from donating money directly to candidates or national party committees. But they have other possibilities to influence the outcome of elections like contributing money to political action committees.

This year’s presidential election campaign is shaped by the rise of a new political committee, dubbed the “Super PAC”, officially known as “independent-expenditure only committees”. Provided they are operated correctly, they can raise funds from corporations, unions and other groups, and from individuals, without legal limits. Super PACs were made possible by a decision of the Supreme Court in early 2010 that effectively allowed unlimited contributions for political purposes to these committees.

Unlike Super PACs, certain civic organizations are not required to disclose their donors – provided they operated solely for the promotion of social welfare, charitable, educational, or recreational purposes. That’s why outside spending of these organizations has skyrocketed over the last years. They may not openly support a candidate, but can support a particular special-interest-related policy.

Source: NY Times

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