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US Presidential Elections – The Money Tale

US Presidential Elections - The Money Tale

For a long time one of the most important factors in US elections has been money. Campaign donations and fundraising receive much press. How the funds are spent and how transparent campaigns are subjects of debate. Here is a quick look at why money is so much at the heart of elections.

Donors

In 2017 the Washington Post stated that the 2016 presidential and congressional elections collectively cost $6.5 billion. For a sense of scale the 2020 elections saw campaign expenses swell to $14 billion. They were the most expensive US elections till date. The vast majority of this money comes from donors. Campaign donors have backgrounds more diverse than the candidates they endorse. According to John J. Martin of the Columbia Law Review, federal legislation on campaign financing prohibits donors from giving more than $35,500 a year to national parties’ campaigns. However, this can get circumvented, such as is the case of Michael Bloomberg’s $18 million donation to the Democratic National Convention. Apparently paradoxes and loopholes abound. According to OpenSecrets via Newsweek.com, the largest donors in 2020 were The Committee to Defend the President ($14.5 million) and Priorities USA Action ($373 million). The amount of disparity between legislation and actual practice warrants further investigation.

Application

All funds donated to a candidate’s campaign must be used for the day-to-day running of the campaign. The funds can include money provided by the candidate for self-funded campaigns. The money may be spent to pay for transportation costs for rallies, marketing and public outreach, catering and miscellaneous supplies, equipment and IT, venue renting, and to pay campaign staff.

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Legality and Morality

According to a USA.gov (a federal portal) informational on Federal Campaign Finance Laws legislation allows donors to pledge money to candidates. Legislation is also empowered to restrict donations. Candidates are required by law to declare all funding received and spent. This enshrines campaign funding as a legitimate practice under federal law. Loopholes do exist. A case in point is the aforementioned Bloomberg donation mentioned in Columbia Law Review’s treatise by John. J. Martin.

Bloomberg was already running as a candidate when he submitted his donation to the DNC. This, in technicality did not classify him as a donor under the definitions of the legislation. Federal law mandates that all money flowing into campaigns be declared in income and expenditure amounts exactly. Effectively this donation still falls within the bounds of legality. This loophole does leave the standing legislation vulnerable to judicial review. However, the legality of the donation and a high usage of the mechanism give it moral credence. All elections up to 2020 have been executed without precedent-shattering cases.

What Makes the Elections So Money-Centric?

The reason for this lies in the importance, power, and influence of the market-based economy. Shareholders in major companies constantly lobby their politicians of choice. Their aim is to push through legislation and policies which benefit their respective industries. Donors fund the candidates, directly or indirectly, who have pro-industry leanings. Fortunately this fixation on money is not uniform across all levels of government. At the state and local levels candidates are more beholden to constituent demands to shape policy.

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Origins

America has long been a nation of migrants. Millions of foreign nationals live and work in the US. They transfer money to their home countries as remittances to support their families. The amount of wealth expended during elections can seem obscene compared to what the average migrant earns. However, this was not always so.

It is hard to pinpoint exactly when the elections became money-centric. It may be thought of as a gradual process. According to some political historians the transformation began before the end of the American Revolution in 1783. According to investment education site Investopedia, the overall cost of maintaining a campaign has seen a steady rise since 1920 and earlier.

Forecast

In today’s economic and political landscape financial muscle is a necessity for someone who aims to step up on an election platform. Outreach is important. Media coverage comes with financial costs. Marketing, logistics, and other core functions of a campaign also cost money. Without the necessary expenditure most candidates would never stand a chance. With inflation the importance of money in the election mechanism has grown. It is difficult to speculate what the future holds. The money-centric nature of the present electoral system is not set in stone and can evolve.


About the author:

Hemant G is a contributing writer at Sparkwebs LLC, a Digital and Content Marketing Agency. When he’s not writing, he loves to travel, scuba dive, and watch documentaries.

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