What Is The Difference Between Hard Money And Soft Money Quizlet

OLR Research Report

October 2, 2003 98-R-0271

TO:

FROM: Madonn M. Janicki, Principal Psychoanalyst

RE: Soft Money

You asked for information on the alleged "soft money" used in election campaigns. You want to know the definitions for soft and granitelike money; where soft money comes from; how it is spent; you said it information technology can constitute old in CT.

SUMMARY

The Federal Election Campaign Act (FECA) limits contributions that individuals and political action mechanism committees (PACs) can progress to to support candidates for federal official office. It bans contributions from the treasuries of corporations, labor organizations, home banks, authorities governing contractors, and nonnative nationals. Soft money (sometimes called not-regime money) means contributions successful outside the limits and prohibitions of federal constabulary. This substance that it is train bodied and union contributions and large individualistic and PAC contributions. Happening the other hand, hard money means the contributions that are subject to FECA; that is, limited case-by-case and PAC contributions only.

The conception of soft money grew out of the post-Watergate reforms established in the FECA. The original purpose of going these donations unregulated was to keep company organizations germane and fortified. To support persuasion parties and their activities, amendments to the law, Federal Election Commission (FEC) rulings, and the courts allowed parties to raise funds outdoor the restrictions on contributions to candidates. The unstructured soft money contributions can be used for overhead expenses of party organizations and distributed expenses that welfare both federal official and non-federal elections. It is spent on party building and issue advocacy, unrelated to individualist candidates.

Every bit an limitless resource for parties, soft money contributions and expenditures have grown dramatically. In the years since parties take up been required to paper such receipts, the arrangement has grown from $86 million in 1992 to $262 million in 1996. In the Presidential election cycle of 1995-96, both parties up a total of $262.1 one thousand thousand in soft money. And parties raised over $67.4 jillio in 1997, the nigh ever in an off-election year. Contributors include wealthy individuals, corporations, travail unions, and professional associations.

In the last Presidential election Hz, party committees spent $271.5 million of their soft money (actually to a higher degree they raised, resulting in extraordinary debt). The money went to (1) state party committees, (2) State and local candidates, (3) joint Union soldier and non-federal activities, and (4) other expenses.

Current state jurisprudence permits national party committees to contribute money to DoS or topical anaestheti company committees without identifying whether the share is from a northern or not-federal account (that is, whether it is serious or soft money). FEC statistics happening national political party transfers to state and local party committees for the 1995-96 election cycle show that the Representative National Committee gave $986,035 to Connecticut political party committees; while the Republican National Commission made no such transfers to its political party committees in the State.

DEFINITIONS

Soft Money

Crusade contributions that are referred to as soft money are those increased by political entity and state parties that are not regulated by the federal push finance police force because they are not contributed directly to a nominee but rather to a company committee for its role in generic "party construction" activities like "get-out-the-vote" or voter registration programs. Contributors are not subject to the contribution limits and prohibitions of Fed law. The money comes from large unshared and PAC contributions and direct firm and Union contributions. It must be deposited in separate, non-Federal soldier accounts. In practice, use of the monetary resource sometimes benefits specific candidates, fashioning it a fomite for skirting contribution limits and restrictions.

Hard Money

By contrast, hard money is federally regulated agitate contributions and other moneys washed-out to tempt the outcome of a federal election. Individuals are subject to an yearbook limit of $25,000 on contributions they sack make to federal candidates, party committees, and PACs (2 U.S.C. � 441a(a)(3)). They can present nobelium more than $2,000 per election cycle to a man-to-man candidate. Corporate PACs are limited to $10,000 per candidate for primary and general elections. The limits put up in the FECA give been the same since they were set in 1974.

SOFT MONEY ORIGINS

The use of soft money resulted from the coriaceous post-Watergate reforms established in the 1974 FECA. The newfangled law was thus strict that candidates and political parties complained after the 1976 election cycle that it strangled volunteer and grass roots company activity. In response to those complaints, the Fed Election Delegacy ruled in 1978 that unlimited state contributions could pay for political party activities. Congress statute the concept in 1979, amending the FECA (PL 96-187) to permit state and local parties to purchase unlimited campaign materials for Tennessean activities promoting federal candidates and party building. Since 1991, FEC rules have necessary parties to report most flocculent money. In 1996, the U.S. Supreme Court ruled that soft money could be spent on such things American Samoa television advertising, thereby increasing the requirement for such funds.

SOURCES OF SOFT MONEY

The diffuse money system has grown from $86 million in 1992 to $262 million in 1996. Figures along soft money contributions include those made to the nationalistic party committees (the Democratic National Committee and Republican National Committee) too as to the congressional committees that parties form to support their candidates running for the federal Senate and U.S. House of Representatives. This describe focuses on those contributions to the national committees only, where they can embody isolated from the others.

1997

The parties ' national committees upraised $67,443,987 in soft money during 1997, according to Common Cause. The measure is the most susurrant money always raised in an off-election year. Of that, the DNC lifted $17,237,849; the RNC elevated $19,999,527; and the parties ' congressional PACs raised the breathe. Table 1 shows the contributors of the largest soft money donations to national committees from the cardinal-month period July through Dec 1997.

Table 1: Largest Palatalised Money Contributors

July 1997 finished December 1997

*Subscriber*	*Recipient role*	*Amount of money*
Philip Morris	RNC	$350,000
Mister. M.G. "Glib" Robertson	RNC	200,000
Baseball diamond Enterprises of Fl, Iraqi National Congress.	DNC	150,000
Gwendolyn Williams Acres	DNC	133,829

1995-1996 Election Cycle

In the most late Statesmanlike election cycle, the parties raised and spent dramatically many in soft money contributions than in any other election since not-federal receipts were rumored. The Democratic national company committees raised $123.9 billion in non-Fed monetary resource, up 242% from 1992, the last Presidential cycle; while the Republican River position party committees raised $138.2 one thousand thousand, up 178%, reported to FEC figures.

The largest contributors to the Democrats included: Seagram &adenosine monophosphate; Sons, Inc./MCA Iraqi National Congress. ($1,180,700); Communications Workers of The States ($1,128,425); and AFSCME ($1,091,050). The Republicans standard susurrous money contributions from: Duke of Edinburgh Morris Co., Inc. ($2,517,518); RJR Nabisco, Inc. ($1,188,175); and American Financial Group ($794,000).

SOFT MONEY EXPENDITURES

Soft money is used to yield for a party organization ' s overhead expenses, as well as shared expenses that benefit both federal and not-federal elections, even if they indirectly benefit Federal soldier candidates. The 1976 FECA amendment permitted nation and topical anaestheti parties to spend outright amounts on campaign materials corresponding buttons and yard signs for volunteer activities. Party organizations could also conduct certain kinds of voter registration and get-out-the-voter turnout drives.

It is as wel used for issue protagonism, besides as taxonomic category party advertising. Parties transfer some of it to state and localised company committees, while some is contributed directly to candidates in non-federal races.

Not astonishingly, soft money expenditures went up as dramatically arsenic contributions in the 1996-97 election cycle. The Democratic public party committees spent $121.8 million and the Republican committees spent $149.7 cardinal. These non-federal funds were spent as follows in Defer 2.

Table 2: 1996-97 Rustling Money Expenditures

*Expenditure*	*Democrats* *(in millions)*	*Republicans* *(in millions)*
Transfers to state political party committees	$64.6	$50.2
Contributions to DoS Beaver State local candidates	4.4	5.2
Joint federal/non-federal activity	33.3	57.2
Other expenses	19.5	37.1

SOFT MONEY DISBURSEMENTS IN CONNECTICUT

The Legal Groundwork

Connecticut ' s take the field finance law permits a policy-making party ' s national commission to relieve oneself contributions to (1) a state fundamental Oregon townsfolk party committee (CGS � 9-333s(b)) and (2) an ongoing (operating theater ideological) Political action committee including the profession committees established by the Little Jo General Assembly caucuses (CGS � 9-333t(b)). Simply the law bans contributions from national committees to (1) Connecticut nominee committees (CGS � 9-333r(b)) and (2) PACs created for a single primary or election (CGS � 9-333u(b)).

The law presently makes no note for the reference of these contributions betwixt a national committee ' s hard or soft money (that is, from its federal Oregon not-federal account). So the soft money contributed to internal company committees bathroom currently be lawfully passed on to state central and townsfolk committees. And a state or local company committee stern make unlimited contributions to (1) another party citizens committee, (2) a candidate citizens committee, (3) back off to a national political party committee, (4) a committee for a candidate for federal or out-of-state office, or (5) a PAC (CGS � 9-333s(a)).

Disbursements in Connecticut

The FEC shows that between January 1, 1995 and December 31, 1996, the Democratic National Company transferred $986,035 of not-federal money to state and local party committees in Connecticut River. The Republican National Committee made no such transfers in the least.

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