It's All About the Benjamins

In our previous post on soft money, we discussed in brief the modern history of campaign finance law in the United States, with particular focus on legislation that regulates contributions. With the 2012 presidential election season already setting fundraising records, we consider today the recent history of presidential campaign spending.

While it is difficult to find credible statistics on campaign spending prior to the Federal Election Campaign Act’s (FECA) 1974 amendments, it is no secret to most voters that the cost of presidential campaigns has far outpaced inflation in recent years. Candidates are increasingly judged before the earliest primary election contests by their fundraising ability above their debate skills, knowledge of contemporary issues, or dedication to public service. Readers might still be surprised, however, to learn just how dramatic the cost increases have been (especially since 2000).

Below is a table with statistics courtesy of the Center for Responsive Politics. The second column uses dollar figures unadjusted for inflation, while the third converts all sums into 2010 dollars and the third shows percentage increase in presidential campaign spending cycle-to-cycle using those real dollars:

Election Year	Nominal Dollars Spent by Presidential Candidates	Real Dollars Spent by Presidential Candidates	Change from Previous Campaign Cycle
1976	$66.9 million	$253.3 million
1980	$92.3 million	$241 million	-4.87%
1984	$103.6 million	$214.6 million	-10.98%
1988	$210.7 million	$383.3 million	+78.63%
1992	$192.2 million	$294.9 million	-23.06%
1996	$239.9 million	$329.9 million	+11.87%
2000	$343.1 million	$430 million	+30.35%
2004	$717.9 million	$821.6 million	+91.07%
2008	$1,324.7 million	$1,340.5 million	+63.16%

Maybe (in part) as a result of FECA’s newly created public financing and stringent contribution disclosure systems, campaign spending decreased in real terms for Ronald Reagan’s two elections and (perhaps surprisingly) for the three-way 1992 contest between Bill Clinton, George H. W. Bush, and Ross Perot. But the highly negative 1988 campaign between Bush and Michael Dukakis saw a monstrous 79% real-dollar increase in presidential spending above 1984’s level, and a downright eye-popping 91% surge came in 2004 with the rise of advertising by independent “527 groups” free of some of the most burdensome campaign finance regulations imposed on parties and PACs by the Bipartisan Campaign Reform Act of 2002, better known as McCain-Feingold.

By 2008, these outside groups had become a critical part of the electoral process, and pundits largely expect their influence to rise in the 2012 campaign. All told, the 2008 presidential race cost some 429% more in real terms than did that in 1976, even though both featured protracted primary contests for one party and fairly high voter interest. But what about fundraising and spending for next year’s presidential election?

Barack Obama’s campaign reached one million donors on October 17 and reported some $60 million cash on hand as of September 30 of this year, a major psychological milestone for a reelection effort fighting the tide of a sluggish economy and widespread voter discontent. Obama’s major Republican opponents are no fundraising slouches either. Mitt Romney’s campaign collected $14 million in the third quarter of 2011, with some $14.65 million cash on hand and, reportedly, a much smaller donor base than one million. Will the 2012 campaign top 2008’s $1.3 billion total tab? And what effects will the Supreme Court’s much-publicized 2010 decision Citizens United v. FEC have on “independent political expenditures” by corporate and labor groups seeking to elect certain candidates and promote associated causes? Check back with us in November 2012.