Soft money

Definition

Soft money refers to political contributions that are not subject to federal regulations or limits, often used by political parties for activities like party-building and grassroots efforts. Unlike hard money, which is regulated and capped in terms of contributions to candidates, soft money allows for larger donations that can be funneled into party organizations. This distinction is important as it impacts how campaigns are funded and the influence of wealthy donors on political parties.

5 Must Know Facts For Your Next Test

1. Soft money became prominent in the 1990s when it allowed parties to raise unlimited amounts for party-building activities without strict federal oversight.
2. The use of soft money often leads to concerns about transparency and accountability since these funds can come from anonymous sources.
3. After the BCRA was enacted, soft money contributions to national party committees were banned, shifting many activities back towards hard money regulations.
4. Despite the ban on national party committees receiving soft money, state and local parties can still receive these contributions under certain conditions.
5. Super PACs emerged as a response to soft money restrictions, allowing for independent expenditure-only committees that can raise unlimited sums from individuals and corporations.

Review Questions

• How does soft money differ from hard money in terms of regulations and impact on political campaigns?
  • Soft money differs from hard money primarily in its regulatory framework; while hard money contributions are limited and closely monitored by the FEC, soft money contributions are unregulated and can be significantly larger. This lack of regulation allows political parties to fund broader activities such as voter outreach and party-building efforts without adhering to contribution limits. The ability to raise unlimited soft money has a substantial impact on political campaigns, potentially leading to increased influence from wealthy donors who contribute large sums.
• Discuss the implications of the Bipartisan Campaign Reform Act on the use of soft money in political financing.
  • The Bipartisan Campaign Reform Act had significant implications for soft money by effectively banning its use for national party committees in federal elections. This legislation aimed to reduce the influence of unregulated contributions on electoral processes, enhancing transparency in campaign financing. However, while it curtailed national party soft money contributions, it created loopholes that allowed state and local parties to continue accepting such funds under certain conditions, which means the concerns about unregulated influence persisted at lower levels of campaigning.
• Evaluate how the rise of Super PACs relates to the restrictions imposed on soft money contributions and what this means for future elections.
  • The rise of Super PACs can be seen as a direct response to the restrictions on soft money contributions following the enactment of the BCRA. These organizations can raise unlimited funds from individuals and corporations for independent expenditures, thereby circumventing some limitations placed on traditional party funding. This shift means that while traditional soft money routes were curtailed for national parties, new avenues for funding have emerged, which could further amplify the influence of wealthy donors in future elections. The continued evolution of campaign finance laws will likely keep shaping how elections are funded and who holds power in the political arena.

Related terms

hard money: Hard money is political donations that are regulated by law and subject to limits imposed by the Federal Election Commission (FEC), typically given directly to a candidate's campaign.

Political Action Committee (PAC):

A PAC is an organization that collects and distributes funds to political candidates or parties, often focusing on specific issues or interests, and can contribute both hard and soft money.

Bipartisan Campaign Reform Act (BCRA): The BCRA, also known as the McCain-Feingold Act, was enacted in 2002 to regulate the financing of political campaigns, particularly targeting the use of soft money by limiting its use in federal elections.