Campaign finance in the United States is the financing of electoral campaigns at the
federal, state, and local levels. At the federal level, the primary source of campaign funds is
individuals while political action committees stand as the second source. Contributions from
both are limited and direct contributions from corporations and labor unions are prohibited. On
January 21, 2010, the Supreme Court reversed a 20-year-old ruling that had previously
prohibited corporations and unions from using money from their general treasuries to produce
and run their own campaign ads. This paper explains the current status of campaign finance
reform and discusses if it is a realistic expectation of the American political process. It also
discusses the role of the soft money.
The Federal Election Commission (FEC) is an independent federal agency created in
1974 by amendments to the Federal Election Campaign Act (FECA) to enforce FECA. Public
financing is available for qualifying candidates for President during both the primaries and the
general election. Eligibility requirements must be fulfilled to qualify for a government subsidy
and those that do accept government funding are usually subject to spending limits. The system
is designed so that the Democratic or Republican candidates for President of the United States
routinely qualify for funds, while excluding most other party candidates. Over half the states
allow some level of corporate and union contributions. Some states have limits on contributions
from individuals that are lower than the national limits. The six states Illinois, Missouri, New
Mexico, Oregon, Utah and Virginia have no limits at all.
Soft money is money given to political parties which is not subject to the contribution
and spending limits of the FECA. It is not subject to those provisions of FECA because it is not
used to expressly advocate the election or defeat of specific candidates. During a brief period in
the presidential election of 1976, when soft money was not allowed in the system, the results
were bad. Congress noted a marked drop off in grass roots party campaigning, as the presidential
campaigns used their limited "hard money" resources for television ads. State, local, and national
parties could not spend money for the traditional bumper stickers, yard signs, slate cards, and
other grass roots activity. This type of grassroots campaigning plays an important role in linking
citizens to the political parties and the American system of democratic self-governance. Thus, in
1979, Congress acted to clarify FECA by expressly authorizing soft money contributions and
spending, even though such contributions and spending might affect federal elections.
In
addition to grassroots campaign activity, soft money also funds voter registration drives, phone
banks, and get-out-the-vote efforts conducted by parties. Drying up the source of money for such
activities will accelerate the decline in voters. Congress should approach the issue of soft money
contributions carefully. Soft money serves a number of valuable purposes in the political system.
As with any other reform, the Judiciary has an important role to play in campaign finance
reform. President Obama appointed Elena Kagan to the Supreme Court and some recent updates
exposed the contrasting opinions of Chief Justice Roberts and Justice Kagan on the topic. It was
clear in the Supreme Court decision invalidating Arizona's public financing scheme under the
First Amendment. Each accused the other of ignoring facts, ignoring doctrine, even ignoring the
basic principles undergirding the First Amendment.
The American political system is almost entirely captive to money. The bottom line is the
bottom line. The campaign finance reform is truly significant in the political system of United
States. Corporations, philanthropists, other groups and individuals must be able to donate an
unlimited amount, with transparency in the election process. This fund needs to be equally
divided among parties. This is not happening unfortunately. Elected Democrats have made some
efforts toward that end, but Republicans are doing everything possible to stop them. The practice
of consolidating power only in the hands of the wealthiest is not anticipated for any democratic
nation.