How Much More Money Do Presidential Candidates Raise Today?

As we slog through Election Day, let’s look at the money that’s gone into this election season. Not so long ago, it was reported that the Obama campaign apparatus had raised one billion dollars in the bid for reelection. It’s not a universally accepted figure, and the final tabulations aren’t in yet, but by the calculations of the New York Times, both candidates had raised roughly $900 million each, as of Oct. 17th. A lot of money. Compare that to the amount that John F. Kennedy raised in his 1960 race against Nixon: $9.8 million, which, adjusted for inflation, equals $76.6 million.

Another interesting thing: Nixon, who had raised more, lost. We know elections have gotten more expensive with time, but at what pace? Do the costs increase in line with the increases of other commodities and not-quite commodities? And does the win always go to the candidate who raised the most?

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There was no such thing as a campaign finance law until 1867. That law was not so much groundbreaking, as all it did was prohibit solicitations from Navy yard workers. Nearly forty years later, during Theodore Roosevelt’s second term, it came to be known that he had taken a $150,000 donation from J. P. Morgan, which Roosevelt had kept secret. This was not illegal, but definitely unseemly for a reformer like Teddy Roosevelt.

Roosevelt’s problem, to put it mildly, was the appearance of impropriety. If a campaign is financed either by the candidate or from donations coming from a multitude of sources, then who is there for the candidate to be beholden to? But if the campaign is financed from practically a single source (aside from the Morgan contribution, three-quarters of Roosevelt’s 1904 campaign war chest was comprised of railroad and oil company money), then it certainly appears like the candidate owes the single source something—loyalty, deference, even legislative favor. It’s not as if graft and patronage were new to the electoral process, but the deep pockets that came out of the Industrial Age had the wherewithal to metastasize the process to a national level.

So before Roosevelt left office, the Tillman Act was passed and signed into law in 1907—the first significant national law governing campaign financing. The Tillman Act banned the acceptance of campaign funds from corporations and national banks.

The intention was to totally solve the problem, and of course it didn’t. It was child’s play to end-run the legislation, even as it evolved with the Federal Corrupt Practices Law of 1925 and the Hatch Act of 1940 and the Taft-Hartley Act of 1947. Additionally, these laws faced opposition in the form of litigation, and were largely toothless because they did not create the mechanism that would enforce the regulations.

The funding provided by these business entities and unions that persisted despite legislative efforts to prevent it is what we’ve come to know of as “outside spending.” 1971’s Federal Elections Campaign Act codified exactly how this outside spending, contributed by so-called Political Action Committees that front for the interest providing the money, would be legislated—who can contribute, how much can be contributed, where the PAC can contribute their funds, disclosure requirements, etc.—which evolved into a tangle of ever more specified vehicles for circumvention, all technically legal though thoroughly objectionable. Even before the Super PAC, with their lack of contribution limits and flimsy candidate-coordination rules, there was a jungle of “outside spending” so convoluted and arcane as to become indistinguishable from the campaign coffers themselves.

Super PACs: surely you’ve heard of the Citizens United decision handed down by the Supreme Court in 2010, which enabled corporations to raise unlimited amounts of money for political spending. It was a groundbreaking case, and certainly altered the political landscape, but the one thing that it did not do is create this “outside spending.” Before there were Super PACS, there were all the other PACs, entities created by business and/or union interests looking to get around the ban on spending money by businesses and unions to influence federal elections.

It’s true that during this cycle the amount of the Outside Money being raised is staggering, equal to or exceeding the campaign and national committee fundraising, and the spending of this money has a lot fewer strings than it used to. But it’s not necessarily a new phenomenon. If America loves anything, it’s finding new and exciting ways to give money in support/opposition of presidential candidates.

This is not to say, of course, that the campaigns don’t also raise their own money, and the FEC. There are very specific laws governing how a campaign itself can raise money, which are enforced by the Federal Elections Commission, created by Congress in 1975 as the enforcement/compliance mechanism for campaign finance laws. As laid down by the FEC, corporations may not contribute to campaigns or national party committees (i.e., the Republican Party), and individuals are limited to $2,500 per candidate. The laws are similar for contributing to national party committees, although the personal limit is much higher, (currently) $30,800. And no, these personal donations are not tax deductible.

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Let’s talk actual figures. We’re going back to 1960 and hitting every campaign between then and now, which will give us a thirteen-point snapshot. The amounts that we cite are amounts spent and not amounts raised, as those figures are not always the same. Campaigns end up with surpluses sometimes, which can be rolled over into a new campaign or donated to someone else’s, or even a debt, which is handled like debts are here in the real world. Take, for example, Gary Hart, whose debt from his 1984 campaign was one of the factors that sank his 1988 campaign that did not involve a boat named “Monkey Business.” Conversely, after the 2008 election, the Obama campaign had $15 million dollars left over.

Below are the amounts spent per major party candidate, with the winner of the election in bold. The figures are from this invaluable New York magazine feature. (No sources were cited, but we confirmed the data.)

1960
John F. Kennedy: $9.8 million
Richard Nixon: $10.1 million

1964
Lyndon Johnson: $8.8 million
Barry Goldwater: $16 million

1968
Hubert Humphrey: $11.6 million
Richard Nixon: $25.4 million

1972
George McGovern: $30 million
Richard Nixon: $61.4 million

1976
Jimmy Carter: $33.4 million
Gerald Ford: $35.8 million

1980
Jimmy Carter: $49 million
Ronald Reagan: $57.7 million

1984
Walter Mondale: $66.7 million
Ronald Reagan: $67.5 million

1988
Michael Dukakis: $77.3 million
George H.W. Bush: $80mm

1992
Bill Clinton: $92.9 million
George H.W. Bush: $92.6 million

1996
Bill Clinton: $108.5 million
Bob Dole: $110.2 million

2000
Al Gore: $127.1 million
George W. Bush: $172.1 million

2004
John Kerry: $328.5 million
George W. Bush: $367.2 million

2008
Barack Obama: $745.7 million
John McCain: $350.1 million

Now let’s take those figures and convert them into 2012 dollars, adjusting them for inflation by using this calculator:

1960
John F. Kennedy: $76.6 million
Richard Nixon: $79 million

1964
Lyndon Johnson: $65.7 million
Barry Goldwater: $119.4 million

1968
Hubert Humphrey: $77.1 million
Richard Nixon: $168.9 million

1972
George McGovern: $166.1 million
Richard Nixon: $339.9 million

1976
Jimmy Carter: $135.8 million
Gerald Ford: $145.6 million

1980
Jimmy Carter: $137.6 million
Ronald Reagan: $162 million

1984
Walter Mondale: $148.6 million
Ronald Reagan: $150.3 million

1988
Michael Dukakis: $151.2 million
George H.W. Bush: $156.5 million

1992
Bill Clinton: $153.2 million
George H.W. Bush: $152.7 million

1996
Bill Clinton: $160 million
Bob Dole: $162.5 million

2000
Al Gore: $170.9 million
George W. Bush: $231.3 million

2004
John Kerry: $402.4 million
George W. Bush: $449.8 million

2008
Barack Obama: $801.5 million
John McCain: $376.3 million

Here’s what that looks like in chart form.

The question of whether the cost of running a presidential campaign has increased is an easy one to answer: hell yes, though not in a measured fashion. It doubled during the 1960s, and then held relatively steady until the turn of the century. And in the past twelve years, it’s exploded, headed straight through whatever roof we imagined to be there.

One explanation for the very recent skyrocket cost of running an election is mechanism of matching funds. The Federal Election Commission provides a block grant for major party candidates, provided that the campaign agrees to certain spending limits and stops accepting personal contributions after accepting the public financing. This is where that three dollars that you check off on your 1040 goes. Well, Barack Obama in 2008 was the first major candidate ever to elect not to receive matching funds, and continued to raise money throughout the election, while John McCain was limited to the money he had already raised, plus the FEC funds. Obama doubled McCain’s spending. And this year, both candidates have opted out of public financing, and accordingly they look to spend two billion dollars combined. This appears to be the new norm.

And as to the question of financial advantage, the candidate that spends the most money is not always the candidate that wins. Barry Goldwater had a nearly two-to-one advantage in 1964, and got thumped, and Gerald Ford and Bob Dole each had financial advantage, which advantage ended up being fruitless. Having said that, in the past thirteen elections, the underfunded candidate has only won four times. Each of those three times it was the Democratic candidate, Kennedy, Johnson and Carter, and the reelection of Clinton. In that time period no underfunded Republican has won.

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If you’re curious about where all this money comes from, you might enjoy spending a couple hours with OpenSecrets.org from the Center For Responsive Politics. And if you’re curious about the impact and implications of the constant need of candidates to raise money, give this “This American Life” episode a listen, and explore the issue of what keeps political donations from being a clear case of quid pro quo? (Spoiler: nothing, really.) And if you’d like to read more about the influence of corporate money after the Citizens United decision, swing a dead cat.

But we tend to issues of how much things cost as compared to how much they used to cost, and elections cost an awful lot, to the point where office-holders contemplating reelection spend as much time raising money as they do governing. The financial burden was already there, but it’s climbing swiftly and of late. Adjusted for inflation, Barack Obama four years ago spent more than ten times what John F. Kennedy spent to win a nail-biter. If in each case you divide the (adjusted) money spent by number of votes won, Kennedy spent $2.23 per vote, and Obama spent $11.52 per vote. Is it that votes are just more expensive to obtain? Is our support a more daunting proposition? Or is it that the process of elections, hundreds of years old, have become a legitimate economy in ways that they weren’t before, with specialized professions like polling and “messaging” evolving out of perceived utility.

Or is it that campaigns stick with what works? The last underfunded candidate to lose was Bob Dole, so at least superstitiously, money wins the race. And now that Barack Obama has demonstrated that to eschew public financing is no longer taboo, the days of relatively sane price tags of campaigns are a thing of the past not to return.


Previously in series: How Much More Do Martinis Cost Today? and How Much More Do Books Cost Today?


Brent Cox is all over the Internet.