2.  Presidential Primaries  Part private, part public money Federal matching funds for all individuals’ donations of $250 or less (incentive to raise money from small donors) Governmental lump-sum grants to parties to help pay convention costs

3.  Presidential General Elections  All public money (usually) Nominee eligible for $20 million + the cost of living adjustment, and can spend $50,000 of his/her own personal funds (about $85 million available for each candidate in 2008) Barack Obama the first major candidate to drop out of the modern campaign financing system since its creation in 1976 (essentially had no spending limits)

4.  Congressional Elections  Mostly private money $2000 maximum for individual donors $5000 limits for PACs Oooo….Pretty! PACS tend to view funds as a way to get access to candidates. -give bulk of $ to incumbents or candidates with no opposition. -give $ to democrats and republicans in congress since no way to predict who will have majority next

5.  Watergate brought about the 1973 federal campaign reform law and the creation of the Federal Election Commission (FEC)

6.  Limit individual donations to $1000 per candidate per elections  Reaffirmed ban on corporate and union donations in place since 1925  Allowed for creation of PACs to raise money for corporations, unions, etc.  Need at least 50 voluntary members  Have to give to at least 5 federal candidates  Limited to giving $5000 per election per candidate, or no more than $15,000 per year to any political party  Created public funding for presidential campaigns

7.  Challenged in the Supreme Court as a First Amendment violation, but mostly upheld in Buckley v. Valeo  Independent expenditures  An organization or PAC can spend as much as it wishes on advertising, so long as it is not coordinated with a candidate’s campaign.  Soft money  Unlimited amounts of $ may be given to a political party, so long as a candidate is not named; this $ can then be spent to help candidate with voting drives, etc.

8.  Did the limits placed on electoral expenditures by the Federal Election Campaign Act of 1971 and related provisions of the Internal Revenue Code of 1954, violate the First Amendment’s freedom of speech and association clauses?  NO: limits on contributions to campaigns and candidates guards against corruption; doesn’t violate 1 st amendment.  YES: limits on a candidate’s spending from personal accounts does violate 1 st amendment; practice doesn’t prevent corruption and doesn’t serve a great enough government interest to curtail free speech.

9.  Following 2000 election, there was a desire to reform finance law  2002 - Bipartisan Campaign Finance Reform Act (McCain- Feingold Law)  Banned soft money contributions  Raised limit on individual donations to $2000 per candidate per election  Restricted independent expenditures Can’t use own $ to refer to a clearly identifiable candidate during 60 days before general election or 30 days before primary election

10.  Challenged in court as restriction of free speech, but Supreme Court upheld almost the entire law (McConnell v. Federal Election Commission)  527 Organizations  Can spend money on politics as long as they do not coordinate with a candidate or lobby directly for that person  Essentially the same effect as soft money

11. 1. Presidential candidates have similar funds because of federal funding 2. During peacetime, presidential elections are usually decided on the basis of: a. Political party affiliation b. The state of the economy --“pocketbook voting” c. Character 3. Other factors whose influence on the presidential campaign is usually overstated: a. Vice presidential nominee b. Political reporting c. Religion of the candidate d. Abortion as a single issue 4. Congressional races – money has a decisive effect a. Challenger must spend to be recognized b. Big spending incumbents also do better and higher spending has become the norm 5. Advantages of incumbency in fundraising