Tuesday, May 11, 2010

Money, Politics, and Elections

George Washington said it so well, "Few men have the virtue to withstand the highest bidder." Exactly what effect does money have on politics, at what point does money corrupt elections, and when will the monetary cost of winning elections stop escalating?

These are critical questions if the "folks" are to elect politicians rather than organizations and their lobbyists.

So how does money get into the political system?

difficult Money versus Soft Money

"difficult money" is money contributed directly to a candidate or to a political party. it's regulated in both source and amount, and monitored by the Federal Election Commission.

"Soft money" is money contributed to organizations and committees instead of to candidates and parties. it's "soft" money is not reported to or monitored by the Federal Election Commission, making it harder to trace its origins.

Soft money originated in the U.S. Supreme Court decision in Buckley v. Valeo 1976. This case ruled that limitations on donations to candidates were constitutional; even so, it created a loophole in which organizations could spend unregulated money for "issue advertising;" any advertising that was not expressly advocating the election or defeat of a candidate.

Soft money can be used for:

o Support for the party instead of the party's candidate

o Advertising support for political issues (especially those tied to your candidate)

o Registering voters (especially those you think will vote for your candidate)

o Hiring folks for voter canvassing in neighborhoods

o Getting folks to the polls on election day

o Campaign administrative costs

Since soft money comes from outside the candidate's election organization, it is able to be used to attack the opposition, while claiming to come from a neutral source; in effect, negative campaigning by proxy.

Such organizations became known as "political action committees" or PACs. more or less 90% of PAC money goes to incumbents, making it a tool to keep incumbents in office.

Matching Funds

Matching funds are subsidies restricted to presidential candidates. They affect both the primary and general election. Candidates qualify by privately raising $5,000 each in at least 20 states.

Once competent, the government allows a dollar for dollar "match" for each contribution to the campaign, up to a boundary of $250 per contribution. In return, the candidate agrees to boundary their spending due to a statutory formula.

From 1976 through 1992, almost all candidates who competent, accepted matching funds in the primary. That changed from 1996 thru 2006 when Steve Forbes, George W. Bush, John Kerry, and Howard Dean opted out of the program because they could raise more funds on their own. In 2008, rejection of matching funds took a big step up with Hillary Clinton, Barack Obama, Rudy Giuliani, Mitt Romney and Ron Paul deciding not to take matching funds. Once these candidates refused matching funds, they were free to spend as a lot money as they wanted.

Beyond primary matching funds, the federal government subsidizes the general election. No major party turned down government funds for the general election since the program was launched in 1976, until Barack Obama did so in 2008.

The presidential public financing system is funded by a $3 tax check out-off on individual tax returns (the check out off doesn't increase the filer's taxes, but merely directs $3 to the presidential fund). even so, the number of taxpayers who use the check out off has fallen steadily since the early 1980s, and in 2006 fewer than 8 percent of taxpayers were directing money to the fund.

Fund Raising on the Internet

In the 2004 presidential election, Senator Kerry broke the internet record by raising $3 million through the internet in a single day. By the end of June 2004, Kerry had raised $44 million through mail and phone solicitations and more than $56 million over the Internet. The 2008 presidential election took additional major jump when Barack Obama raised $650 million for his election, more than twice as a lot as any other candidate in U.S. history, and a lot of that money came through the internet.

Internet fundraising offers a lot of significant advantages. First, it's the cheapest method of raising money. Second, the average contribution on the internet is far less than the $2,000 legal boundary per individual, so the campaign can continue to solicit contributions from the same donor throughout the election.

On November 20, 2008, the Washington Post stated the following incredible statistic: "Barack Obama raised half a billion dollars online in his 21-month campaign for the White House, dramatically ushering in a new digital era in presidential fundraising."

What Does it All Mean?

The ever expanding costs to get elected raise a number of troubling issues and problems:

o The rise in costs to elect candidates to federal positions has been staggering since the 1990's. Without spending limits, candidates have a rising minimum spending floor to win the election. They likely must spend more money than it took to elect the last candidate to run for that office.

o Politicians need donations from all sources to accumulate the amount of money necessary to win office. Once elected, politicians need to assure the donors that their money was well placed, or they won't get donations for re-election. Plainly stated, donations buy access to politicians.

The end result is, there are two kinds of politicians with enough money win election:

o Politicians that are wealthy individuals, or

o Politicians that raise the most cash through contributions.

Do we really want only the wealthy running our country? No. So we are left with politicians bought and paid for by campaign contributors.

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