Campaign Financing

Over the years, congressional candidates have raised money from businesses, labor unions, individuals, and political organizations. The candidates themselves have been important sources of funds at different times during the history of Congress. Today businesses and unions are barred from contributing directly to campaigns, but they participate by forming and operating separate funds called political action committees (PACs). Other organizations, such as ideological and issue groups, also have PACs. PACs and individuals are the major sources of campaign funds for congressional candidates.

Spending by political parties, although still small when compared to PAC and individual spending, rose sharply in the 1990s. Creative use of massive amounts of “soft money”—contributions to party committees that were ostensibly for nonfederal activities and therefore largely unrestricted at that time by federal campaign finance law—as well as more federally regulated “hard” dollars increased the clout of party committees dramatically. Party leaders feared loss of their newfound influence in the wake of a ban on national party use of soft money enacted in 2002. However, they soon discovered that independent expenditures—spending that is not coordinated with a campaign—gave them a significant tool for moving large sums of money to competitive races, especially late in a campaign.

The enormous expense of modern campaigns has made the ability to raise funds crucial to political strength. Congressional candidates in the 2009 to 2010 election [Page 69]cycle spent almost double what had been spent eight years earlier—$3.4 billion compared with $2.1 billion. Republicans that year spent $1.73 billion, while Democrats spent $1.64 billion. The average winning race cost $1.4 million in the House and $9.7 million in the Senate, compared with $898,000 and $5.3 million respectively in 2002. (The cost of congressional elections declined slightly in 2012 from 2010, as both parties concentrated their fundraising energies on the presidential race.)

The ability to raise money often is a key factor in measuring a candidate's chances of being elected. This is particularly true for challengers, who must work hard to raise enough money to pay for the political advertising needed to make their names familiar to the voters. Incumbents almost always have an easier time raising money. Particularly if they hold positions of influence in Congress, most incumbents can count on ample contributions from organized interest groups. Incumbents sometimes raise so much money in advance of an election that potential challengers decide not to run against them.

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