How Have Campaign Finance Laws Evolved since 1970?

Campaign finance legislation has been constantly evolving over the past 50 years. The massive amount of money in American politics is actually a fairly recent phenomenon, with limits on third-party spending being struck down in 2010 under certain conditions.

Congress has passed several laws to limit the amounts and sources of money being spent in political campaigns. Congress took the first steps in 1971, when it passed the Federal Election and Campaign Act (FECA) and the Revenue Act. FECA placed spending limits on advertisements by candidates, and allowed for the creation of political action committees (PACs), which would fundraise on behalf of a campaign and then donate the money that they raise directly to that campaign.

The Revenue Act, on the other hand, created the public financing system for presidential elections. The public financing system provides funding in both the primary and general elections. In the primaries, the federal government provides funds to presidential candidates by matching the first $250 of every contribution that the candidate receives, with an upper limit they can spend during the nomination process and state-based caps as well. During the general election, a flat amount of money is given to the nominees of each party, and they are not allowed to raise private funds.

Given the hard limits that the Revenue Act places on spending and fundraising for elections, recent candidates have decided to forgo receiving public funds since they have the potential to raise higher amounts through private fundraising. For example, John McCain accepted public funds for his presidential campaign in 2008, which provided $85 million for his general campaign spending, which paled in comparison to the $309 million that Obama raised. Barring changes to the amount of public funds that are provided to candidates, or additional limits placed on private fundraising and spending, it appears unlikely that future candidates will choose the public financing route.

In 1974, Congress amended FECA in the wake of the Watergate scandal, limiting individual contributions to $1,000 a primary or general election campaign, and placing a hard $25,000 limit on overall contributions to PACs, candidates, and parties. These amendments also imposed spending limits on congressional campaigns and limited the amount of money that candidates could spend on their own campaigns. To enforce these limits, Congress also founded the Federal Election Commission (FEC) in 1974.

The Buckley v. Valeo Supreme Court decision struck some of these limits down, finding them unconstitutional under the First Amendment. Individual contribution limits were seen as a valid way of combatting corruption, but spending limits by campaigns, limits on how much candidates could contribute to their own campaigns, and limits independent spending by outside groups on “issue advocacy” (talking about how a candidate falls on an issue, like abortion) instead of “express advocacy” (i.e. using specific words to tell people to vote a certain way) were ruled unconstitutional, since they limited the ability of individuals to speak freely about their opinions.

In 1979, Congress passed additional FECA amendments that allowed for parties to accept unlimited, unregulated donations that would go to party building exercises, like get out the vote and voter registration — which became known as “soft money.” This allowed for individuals to avoid the limit placed on direct contributions to candidates, and instead funnel unlimited money to their local or state level party organizations. The massive increase in funding created a bipartisan backlash, and Congress pursued further limits on campaign finance on a bipartisan basis.

This led to the Bipartisan Campaign Reform Act (BCRA), also known as the McCain-Feingold amendment, was passed by Congress in 2012. It eliminated soft money contributions, limited the use of “issue advocacy” advertisements to 60 days before a general election or 30 before a primary, and also raised the individual contribution limit to $2,000 and tied it to the rate of inflation.

The equation of spending to speech under Citizens United allows third-party candidates to funnel money into advertising for political campaigns in unlimited amounts.

In 2010, the Supreme Court heard the Citizens United v. FEC case, which initially challenged the restrictions placed on the airing of “issue advocacy” advertisements. However, the Supreme Court’s decision removed the prohibition on corporate independent expenditures, so long as the funding went to “issue advocacy” as established under the Valeo decision. This meant that 501(c) organizations and the newly created Super PACs to fundraise and spend an unlimited amount of money in support of electoral campaigns, so long as they did not coordinate directly with the campaign, encourage people to vote in certain ways, and with the disclosure of who donated money.

The future of campaign finance remains to be seen, but in the aftermath of the Citizens United decision independent expenditures have exploded: “Super PACs and 501(c) organizations spent approximately $1.5 billion in connection with the 2016 election.” Super PACs outspent the two major political parties in 2016 more than four times over.Independent expenditure groups like Super PACs currently play a large role in determining the funding for political advertisements during elections, as well as choosing the issues that are advocated about and discussed by the candidates and voters as a result.