Report: Reclaiming Our Democracy

The Role of Money in the 2002 Congressional Elections

Released by: U.S. PIRG Education Fund

This report provides a summary of the role of money in the 2002 congressional elections. While most analysts have focused on soft money in recent years, our findings indicate that hard money plays a more critical role in the political process.

The primary problem with money in politics is that large hard money contributions—which only a small fraction of the public can afford to make—unduly influence who is able to run for office and who wins elections in the United States. Without personal wealth, or the ability to raise large sums of money from wealthy contributors, many aspiring candidates are locked out of the process. Those voters who wish to support views that are rejected by wealthy donors are left without an outlet. Ultimately, successful candidates are more accountable to an elite donor pool than to the majority of their non-wealthy constituents.

The key findings from our analysis of Federal Election Commission (FEC) campaign finance data for the 2002 election cycle and academic estimates are as follows:

Total election spending tops last non-presidential year. At least $2.376 billion was spent for the purpose of influencing 2002 congressional elections. This figure falls short of the record-breaking 1999-2000 election cycle, but tops the last non-presidential cycle.

Hard money is the currency of elections. Almost three-fourths (71 percent) of the money spent to influence 2002 elections was limited and regulated hard money. This money is more important than soft money because it is spent earlier and in more races.

Hard money was a key determinant in 2002 election outcomes. Ninety-four percent of the candidates who raised the most hard money won their 2002 general elections. In primary elections, the candidate who raised the most money won 90 percent of the time.

Winners significantly out-raised losers; incumbents significantly out-raised challengers. 2002 primary election winners out-raised losers by a margin of 4.7-to-1. General election winners out-raised losers by approximately 4-to-1. Incumbents out-raised general election challengers by approximately 4.5-to-1.

U.S. elections are predominantly funded by a small number of large contributors. Just 0.22 percent of the U.S. voting age population contributed at least $200 to a 2002 congressional candidate; this narrow donor pool was responsible for 76 percent of all individual candidate contributions. Only 0.09 percent of the population made contributions of at least $1,000 and accounted for 55.5 percent of individual contributions to 2002 congressional candidates.

Small donors are overwhelmed by big money contributors. Only 13.4 percent of candidates’ total receipts came from individual donors contributing less than $200.

Out-of-district and out-of-state donors exerted considerable influence on 2002 congressional election contests. House candidates raised 55.6 percent of their itemized individual contributions and an estimated 65.4 percent of their funds from outside of their districts. Forty percent of itemized individual contributions to 2002 Senate candidates came from outside of their home states.

Members of Congress tend to be wealthier than the general public. Forty-two percent of the members of the Senate and 23 percent of the members of the House of Representatives are millionaires, compared with 1.0 percent of the U.S. voting age population.

The Bipartisan Campaign Reform Act (BCRA) will not "get big money out of politics," but will increase the influence of wealthy donors over who runs for federal office and who wins elections in the United States. We predict that in future election cycles, candidates will raise a greater proportion of their funds from large donors and less of their money from average Americans. The fraction of one percent of Americans who can afford to give contributions of $1,000 or more will exert even greater undue influence over federal elections.

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