The landmark 1965 Immigration and Nationality Act and 1980 Refugee Act codified the right of any person who has been persecuted or has a well-founded fear of persecution on account of 5 factors: race, religion, nationality, membership in a particular social group, or political opinion, to seek safety in the US as refugees. There are currently 29.6 million refugees globally (the most in history), and most are hosted in developing countries. The United Nations coordinates resettlement in countries like the US for the most vulnerable 1% of refugees, and the annual number of refugees resettled is decided by the President. The US was instrumental in creating the international refugee resettlement system, and has led the world in refugee resettlement. It has accepted more refugees historically than any other country, and, from 1982-2016, made up 69% of all refugee resettlement.Usually, the President and advisors decide how many people to take based on the number of displaced people globally. 2016-2020 marked a break from tradition, as the US accepted record low numbers of refugees during the global crisis.
Resettlement Process
Refugees are registered and vetted by the United Nations, and go through further screenings and background checks once they are selected for the US by the Department of Homeland Security, the State Department, and other agencies. The process takes an average of two years. After refugees arrive in the US, they are resettled by one of nine national non-profit organizations which work closely with the federal government and local partner organizations all over the country. The federal government allocated a one-time grant of $2,125 per refugee to the national organizations in 2019 to support housing, language training, medical care, and provide a stipend until the refugees are financially independent. Refugees also utilize public services like education, and non-profits supply additional resettlement resources. There are several different paths to becoming a US permanent resident, and refugees have made up 5-10% of new permanent residents for the past decade.
Global Compact on Refugees
The majority of refugees are not resettled, and are instead hosted in developing countries neighboring conflict zones until they are able to return home. In 2018 the United Nations proposed the Global Compact for Refugees which advocates for an international plan to support developing countries bearing the burden for the refugee crisis. In exchange, host countries would work to better integrate the refugee populations.
The number of refugees resettled in the US every year, also known as the refugee cap, is decided by the President. The United Nations works to resettle the most vulnerable 1% of refugees in safe countries, with more than half of that number annually coming to the United States.
Arguments for resettling fewer refugees
Cost to the public: Refugees represent a significant upfront cost, which the US could instead invest in schooling, healthcare, or housing for citizens, which would likely pay dividends. However, the upfront cost of resettling refugees in the US is offset over time by their tax contributions.
Crime: Some Americans have concerns that refugees are susceptible to radicalization. However, the US has resettled more than 3 million refugees without a single terrorist attack. Refugees undergo a rigorous, years-long background check to ensure that no one with links to terrorist organizations or who has committed crimes are resettled in the US. There are also concerns that refugees might perpetrate other types of crimes. Of the 10 US cities who resettled the most refugees (2006-2015), 9 experienced a decrease in violent and property-related crime during that time which was more significant than the decrease in the rest of the country.
Loss of “American culture”: Some are concerned that immigration and changing demographics diminish “American culture” (i.e ethnic whiteness, the English language, Christianity, and respect for Constitutional ideals). Although refugees make up about 5-10% of permanent immigrants to the US, they are often made the face of America’s demographic changes. For the last several decades, refugees have been primarily non-white and have not spoken English as their first language. However, a plurality of refugees in the US are Christian.
Arguments for resettling more refugees:
Maintaining population growth: Immigration is essential to maintain economic growth in the US. The 2010 decade experienced the lowest population growth since the first recorded census in 1790, leading to projections of low economic growth in the coming decades. Immigration boosts America’s declining population and relieves the pressure on the labor force of supporting retirees.
Urban rejuvenation: Many cities in the Midwest and Great Lakes regions have experienced economic and population declines in the 20th century, and resettlement is a successful method of urban rejuvenation. Cities like Utica, NY and St. Louis, MO accepted thousands of refugees to stimulate the economy and reverse population decline. Declining industry and population have characterized the region and resettlement is a proven and effective countermeasure.
Nation of immigrants: Since the founding of the country, the United States has stood as a beacon of freedom and opportunity, and attracted people from around the world in search of a better life. While many countries define themselves in terms of a religion or ethnicity, the American national identity is often connected to the shared experience of immigration. Because of this, the US has traditionally set a goal of resettling 0.5% of the global refugee population annually, but the 2019 cap was set at just 0.1%—the lowest in US history. In addition, the American example leads other countries; the US can be a model for generous resettlement policies or provide justification for other countries to close their borders.
The landmark 1965 Immigration and Nationality Act and 1980 Refugee Act codified the right of any person who has been persecuted or has a well-founded fear of violence and persecution on account of five main factors: race, religion, nationality, membership in a particular social group, or political opinion, to seek safety in the United States. These people are known as “forcibly displaced.” Forcibly displaced people in the US fall into two main categories: refugees and asylum-seekers. Refugees apply for entry into the US and are approved for resettlement while outside of the US, which makes them different from asylum-seekers who apply at a port of entry or from inside the country.
The United States recognized the need for refugee programs following the devastation of World War II and the large population of displaced people, which was estimated to be over 60 million strong. It also acknowledged that many people who attempted to flee persecution at the hands of the Axis powers were turned away from safe countries. Refugee infrastructure and legal framework developed throughout the following decades as the country successfully welcomed waves of vulnerable people from all over the world. Modern conflicts, like civil wars in Syria and Libya and state violence in Venezuela and Myanmar, have resulted in the largest displaced population since World War II, now totaling 79.5 million, and proved challenging for refugee infrastructure to manage. While the United States used to lead the world in refugee resettlement, it now faces international scrutiny for its historically low refugee cap.
Historical Overview of US Refugee Policy
Pre-1945 System
Refugees and asylum-seekers were not distinguished from other immigrants, and were processed using the same criteria and methods. For much of the US’s history there were few restrictions on immigration.
1939-1945 World War II
World War II had a profound impact on the international response to displaced people. An estimated 60 million people were homeless and displaced following the war. This created the need for international recognition for displaced people and a system of relocating them. In addition, many persecuted people fleeing during World War II with credible cause found themselves turned away from safe countries. One example of this was a ship carrying 900 Jews fleeing Germany in 1939, which was sent back to Germany after making port in the US and asking for asylum. More than half of the passengers who returned to Germany were killed. Stories like these created an international desire for asylum processes, so that the fate of those passengers would not be repeated. However, the international community has not always been able to live up to this goal.
President Truman’s directive created a plan for processing displaced people so they could enter the United States as immigrants. Through this program, a cohort of 40,000 displaced people were able to migrate to the US. It also created a path to citizenship for displaced people who had migrated previously.
This act codified the notion that displaced people have a right to enter the US, which had not been established through law previously. It allowed for 350,000 displaced people to resettle in the US across four years.
This convention was held by the newly-created United Nations to create protocols for refugees following World War II. Initially, the protocols only referred to people who had been displaced by events prior to 1951 (i.e. World War II) but the purview was later expanded. The protocols designated several key definitions and laws which applied to all member states:
Defined refugee as a person who has fled their country of origin and is unable or unwilling to return because of a well-founded fear of being persecuted because of their race, religion, nationality, membership of a particular social group or political opinion.
Created the international law that no person should be forced to return to a country where they fear threats to life or freedom.
Included important note that oftentimes people need to break immigration laws in order to claim asylum, and it is illegal to prosecute them for breaking those laws.
Set out expectations that refugees would be granted the same right to public services and work authorization as citizens of the host country.
Excluded people who commit serious crimes, including war crimes and crimes against humanity (crimes against humanity are deliberate acts which cause suffering or death on a large scale), from these protections.
The United Nations was the brainchild of the US and Great Britain, and was founded in San Francisco in 1945. The text of the Convention Relating to the Status of Refugees was drafted by a US representative to the Convention.
The amendments to the Immigration and Nationalities Act (originally passed in 1952) allowed for the conditional entry of people into the US who could credibly demonstrate they were persecuted or feared persecution on account of race, religion, or political opinion.
1967-8 United Nations Protocol and US Accession
This protocol expanded the 1951 Convention policies towards all refugees, not just ones displaced from World War II. The following year, the United States acceded (accede: in international law, to become party to an agreement or treaty) to the UN Protocol.
This act created a national structure for refugee resettlement through the Office of Refugee Resettlement, and made key elements of the UN Refugee Conventions US law. Even though the United States had acceded to the UN Protocol on the Status of Refugees, the positions and commitments expressed in the protocol were not legally enforceable until they were written into US law. The Refugee Act wrote into law the UN definition of a refugee, and prohibited refoulement, the practice of returning an individual to a country where they are in danger of persecution.
The Act created the expectation that all refugees receive English language training, job placement assistance, and cash assistance for a limited time, with the goal of promoting economic self-sufficiency as quickly as possible. The number of refugees admitted into the country is set annually by the president.
In addition, the Refugee Act contained several key provisions:
The right of every person to refuge was established, regardless of the country or region they come from. This means that people could not be discriminated against in the refugee process based on their country of origin.
1996 Illegal Immigration Reform and Immigrant Responsibility Act and Implementation (IIRIA)
This act expanded the definition of refugee to include individuals who had been victims of “coercive population control” in the form of a forced abortion or sterilization.
President Truman’s message about the importance of providing a safe home for refugees in the US following the refugee crisis of World War II
The National Immigration Forum provides an excellent fact sheet about refugee resettlement
Background Information
Refugees and the International System
Displaced people are forced to leave their home due to “armed conflict, general violence, or human rights violations.” At this time, the global displaced population is 79.5 million. Internally displaced people (IDPs) have been forced to leave their home but have not crossed national borders, and remain in their country of origin. IDPs make up slightly more than half of the forcibly displaced population, at 45.7 million. Once a displaced person crosses an international border into another country, they officially become a refugee and qualify for international protection. There are currently 29.6 refugees (including internationally displaced Venezuelans) and an additional 4.2 million asylum seekers whose refugee status is still being determined.
Refugees generally remain in the host country they have fled to, so long as that country is deemed safe. Refugees have three potential paths: wait out the conflict, integrate into the host country, or resettle into a safe third country. Most refugees wait out the conflict in their home countries in refugee camps or other temporary shelters, with the expectation of returning home when it is safe. However, many refugee-creating conflicts have become protracted, leaving hundreds of thousands of people stranded and unable to build lives for years or decades. For example, 2.6 million people have fled Afghanistan due to the conflict between the US-backed government and the Taliban which began with the 2001 US invasion. Integrating into host countries is a desirable option for long-term refugees, but it is not always possible. Many host countries do not want displaced people to settle permanently, and severely limit the number of people who can seek employment or gain permanent residency. The third option, resettlement in a safe third country, is only available for the most vulnerable 1% of refugees who would likely never be able to return to their home countries, or are in danger in their host countries. “Third country” refers to the fact that the country of origin is the “first country” and the initial host country that a refugee crossed into is the “second country.”
The United Nations High Commissioner for Refugees (UNHCR) identifies refugees who qualify for resettlement every year, and makes their profiles available to the safe third countries, who decide which refugees and how many to resettle. Refugees are considered highly vulnerable if they:
Risk legal and physical danger in their current state. For example, if their host country has a close relationship with their home country or shares the viewpoint which led to their persecution, and could potentially return them to the home country. This could apply to someone who fled their home country due to religious persecution, and the neighboring country also persecuted people of their religion.
Are survivors of violence or torture. Survivors of violence or torture often require mental and physical care to recover from their ordeal.
Have a medical condition which cannot be treated in their current situation. This applies to life-threatening medical conditions where adequate treatment is not available or inaccessible in their host country.
Are women or girls at risk. In many countries, women and girls are especially vulnerable due to sexual or gender-based violence, or face additional legal issues, especially if they are traveling without a male head of household.
Seek reunification with a close family member who has already been resettled.
Are at-risk children. Children who have been separated from their families or are traveling without protection are at risk of violence, exploitation, or legal challenges.
Have a lack of durable solutions. Refugees in long-term refugee situations who are not eligible to integrate into their host country can apply for resettlement.
Refugees and US Immigration
There are four channels for legal permanent immigration to the United States: forced displacement (refugee and asylum), diversity lottery, family sponsorship, or employment sponsorship. People entering the country due to forced displacement make up only a small fraction of the total number of people becoming permanent residents every year, as can be seen in Figure 1.
Figure 1: US Permanent Resident Statistics (2010-2018) (Base data can be found in the Appendix)
Read More
For an overview of the legal immigration system and more information on each of the four main entry paths for permanent residents, read this primer from the Migration Policy Institute.
This interactive chart demonstrates the annual number of people granted permanent residency in the US from 1820 to the present day.
In the early 1990s, the global population of displaced people ballooned due to the fall of the Soviet Union, and the US responded by increasing its refugee intake accordingly, nearly doubling its refugee intake. Following the example of the United States, the rest of the world stepped up as well and absorbed the displaced population. With the global displaced population reduced, the 1990s and 2000s saw a decrease in refugee intake.
However, the US has not responded to the current refugee crisis in the Middle East and Sub-Saharan Africa where 79.5 million people are displaced, the most in recorded history, and 29.6 million are refugees. Only the most vulnerable refugees are selected for resettlement. Despite these recent developments, US refugee intake is the lowest it has ever been, with 30,000 refugees admitted in 2019 and a ceiling of 18,000 for 2020, which is roughly 0.005% of the US population. See how the US compares to other highly developed countries in Figure 3.
Figure 3: Refugee Intake as a Percentage of Population
Origin of Refugees
In recent years, the main country of origin for refugees resettled in the US has been the Democratic Republic of the Congo, followed by Myanmar and Ukraine. The US has consistently accepted large numbers of refugees from Asia, and in the 90s accepted many European refugees after the fall of the Soviet Union. Due to violent conflicts in Sub-Saharan Africa, the number of refugees from Africa has slowly increased over the last three decades. The following graph demonstrates the change in country of origin of refugees in the US.
Refugees are registered and vetted by the United Nations, and go through further screenings and background checks once they are selected for the US by the Department of Homeland Security, the State Department, and other agencies. The process takes an average of two years. After refugees arrive in the US, they are resettled by one of nine national non-profit organizations which work closely with the federal government and local partner organizations all over the country. The federal government allocated $2,125 per refugee to the national organizations in 2019, to support housing, language training, medical care, and provide a stipend until the refugees are financially independent. This relatively small amount can be supplemented by national nonprofit fundraising and donations, and refugees are also eligible for some social welfare programs, unlike other immigrants. After one year in the US, refugees are required to apply for a green card (a.k.a. permanent residence in the US).
Figure 6 demonstrates that while refugees are resettled in states across the country, they have been concentrated in high-population states like California, Texas, and New York since 2002.
Refugees represent a significant up-front cost for the federal government, but this cost is offset over time by their tax contributions. The initial costs include the resettlement grant of roughly $2,000, as well as reliance on public services and the social safety net at higher rates than Americans born in the US. With all of the costs combined, the total cost of hosting a refugee for their first 20 years in the US (the time period where they are the least financially-independent) averages to $107,365.
Estimates of refugee tax contributions indicate that resettled refugees contribute more in taxes to state and federal governments across their first 20 years than they receive in services. On average, refugees contribute $128,689 in taxes during their first 20 years, meaning they pay $21,324 more than they receive in benefits.
Displaced People Outside the United States
As discussed in the Background section, the burden of displaced people primarily falls on the developing world. While the US leads in global refugee resettlement, only the most vulnerable 1% of refugees are eligible for resettlement. The other 99% of displaced people are hosted by neighboring countries with the expectation that they will return home when possible. Charities and international aid organizations work to supply refugees with necessities like shelter, food, emergency healthcare, and education which are often beyond the capacity of host countries. The US is a major funder of international aid, and annually supports the United Nations High Commission on Refugees (a main aid provider and coordinator) with close to $1.7 billion. However, current funding levels fall short of meeting the most basic needs of many displaced individuals. UNHCR estimates indicate that it has only 3/5th of the funding necessary to fulfill its mission. This stems from decreased funding from other countries, as well as greater pressure on the resources from the growing displaced population.
Read More
Pew Research Center discusses the historical relationship between US refugee intake and the global displaced population using graphs and visuals
View this interactive map demonstrating where refugees are resettled across the US
The following policy alternatives are identified so that readers can easily develop their position on different aspects of refugee policy. They are not ordered in terms of priority.
Number of Refugees Accepted Annually
The primary policy debate relates to the number of refugees welcomed into the country. Those who believe in lowering the number of refugees accepted into the US have three main arguments.
Cost to the public: Many people are under the impression that refugees are a net drain on the federal budget, rather than a net positive (as discussed in the Current Policies section) so they argue that the United States should divert refugees resettlement spending to other programs which benefit American citizens, or else either pay down the deficit or lower taxes. Putting aside that factually-inaccurate argument, there is a real debate around whether the US should invest in refugees, or divert that money towards investing in its own citizens. Refugee resettlement requires an up-front investment of $2,000, plus $107,365 in social services across their first 20 years in the country. As refugees become increasingly more self-sufficient, they contribute more in taxes than they consume in public services, and contribute $128,689 across that same time period. That investment could instead go to improving an American citizen’s schooling, healthcare, or subsidized housing, all investments which would likely pay dividends as well.
Crime: Some Americans have concerns that accepting refugees of a variety of countries of origin and religions could lead to increased crime rates. In 2017, President Trump signed an executive order titled “Protecting the Nation from Foreign Terrorist Entry into the United States” which, among other actions, lowered the annual refugee cap, froze resettlement for 120 days, and indefinitely banned refugees from Syria. However, the United States has resettled more than 3 million refugees and not a single one has committed a terrorist attack. Refugees undergo a rigorous, years-long background check conducted by the US government and international organizations, to ensure that no one with links to terrorist organizations or who has committed crimes in their country of origin, are ever resettled in the US. There are also concerns that refugees might perpetrate other types of crimes. An extensive study by the New American Economy Research Fund found that of the 10 cities who resettled the most refugees from 2006 to 2015 (as a proportion of their population), 9 actually experienced a sharp decrease in violent and property-related crime. While the entire country experienced a decrease in violent and property crimes during this time period, the trends in these 9 cities demonstrate a more significant decrease than the rest of the country. In other words, the cities most impacted by refugee populations saw decreases, rather than increases in crime, regardless of the country of origin of the refugees.
Loss of “American culture”: Some are concerned that immigration and changing demographics diminish American culture. In this context, “American culture” is associated with ethnic whiteness, the English language, Christianity, and a shared respect for the ideals of the Constitution. Although refugees make up about 5-10% of total immigrants to the US, they are often made the face of America’s demographic changes. For the last several decades, refugees have been primarily non-white and have not spoken English as their first language. In addition, they frequently come from countries without the same democratic principles as the US, so some are concerned that refugees will not value the ideals of the Constitution. However, a plurality of refugees in the US are Christian.
There are five main arguments for increasing the US’s refugee intake.
Maintaining population growth: Immigration is essential to maintain economic growth in the US. The 2010 decade experienced the lowest population growth since the first recorded census in 1790, due to low birth rates and limited migration, especially in the latter half of the decade. This has major implications for the economic prospects of the country. The aging population is relying more and more on government programs like Social Security and Medicare, while an ever-smaller workforce will continue contributing to the economy and paying into those programs. Concerns over population shrinkage have led to projections of low economic growth in the coming decades, assuming there is no change in immigration policies. One benefit of immigration is that it boosts America’s declining population with new additions to the labor force, relieving the pressure on the natural-born population of supporting retirees. There are other options to keep government programs financially solvent under the strain of an aging population, like raising payroll taxes which pay into Medicare and Social Security, pushing back the retirement age, or decreasing benefits for retirees.
Entrepreneurship and innovation: Refugees contribute to their host countries through entrepreneurship and innovation, and are more entrepreneurial than the domestic-born population. The National Bureau of Economic Research found that immigrants represent 25% of the entrepreneurs in the United States, despite being only 15% of the population. Refugees are even more entrepreneurial than other immigrants. The attributes required to be a successful entrepreneur track closely with the experiences of displaced people, from resourcefulness to willingness to take risks. This is important because when refugees start businesses, they employ other Americans and create new jobs which create more opportunities for the natural-born population. Research from the nonpartisan Center for Economic Research indicates that diversity of birthplace in a country promotes economic growth and complexity. Migrants bring new ideas and perspectives, and are essential for transmitting knowledge across borders.
Resettlement and urban rejuvenation: Many cities in the Midwest and Great Lakes regions have experienced economic and population decline since deindustrialization during the 20th century. Refugee resettlement has proven to be a successful method of urban rejuvenation in those cities. Cities like Utica, NY and St. Louis, MO accepted thousands of refugees to increase their population and bring in federal aid funding, which stimulated the economy and reversed population decline. In small metropolitan areas across the region (like Lincoln NE, Manchester NH, and Erie PA) refugees have “revitalized distressed neighborhoods by starting businesses and restoring homes,” causing declining cities to actively seek refugees from national resettlement agencies. In a time when declining industry, population, and quality of life has characterized the region, refugee resettlement has proved to be one of the few consistently-effective countermeasures.
Nation of immigrants: Some argue that immigration and, specifically, refugees, are essential to the national identity of the United States. Since the founding of the country, the United States has stood as a beacon of freedom and opportunity, and attracted migrants from around the world in search of a better life for themselves and their families. While many countries define themselves in terms of a religion or ethnicity, the American national identity is often connected to the shared experience of immigration. Every citizen apart from Native Americans are either themselves an immigrant, or descended from immigrants, many fleeing persecution in their country of origin. Because of this, some believe that, regardless of the other benefits, it is essential to continue accepting new refugees as Americans.
Global displaced population: Based on the US’s traditional goal of resettling around 0.5% of UNHCR-designated refugees, current levels fall far below the norm. As discussed in the Current Policies section, the cap is usually based on the total population of displaced peoples, and so dropping the cap to unprecedentedly-low numbers while the number of displaced people is greater than any time since the end of World War II represents a break from tradition. In addition, the American example pushes other countries to up their resettlement numbers as well, so increasing US resettlement when the need is so great would have a multiplying effect within the developed world.
Improving the Resettlement Process: Looking to Germany
Refugees in the US already have a demonstrated track record of success, but some argue that a more comprehensive and supportive resettlement program would allow the US to gain an even greater benefit from refugees. Germany is a model country for refugee resettlement because it offers intensive integration courses to facilitate a successful transition. Refugees receive hundreds of hours of German language training, as well as lessons in German history and culture. The US does not have a nationwide integration strategy. Language courses and training in US culture and history are offered through a patchwork system of NGOs depending on the availability of funds and volunteers. In addition, Germany provides optional vocational training to direct refugees towards the sectors of the German economy where they are most needed. In Germany’s case these industries include auto mechanics and construction; sectors which the German workforce has migrated away from. In the US, for example, the home healthcare industry is in crisis due to lack of workers, and that problem is likely to worsen as more Baby Boomers retire and require home health care. One potential option is to offer free or inexpensive training for resettled refugees to enter sectors like the home healthcare industry and take up the jobs that Americans require but are unwilling to fill. This strategy has tradeoffs; the upfront cost of resettlement increases, as does the refugee’s contribution to the US economy.
Supporting Displaced Peoples Around the World: The Global Compact on Refugees
As of 2018, 6.7 million refugees from Syria fled the country and 85% were hosted by neighboring countries. Turkey hosts 3.6 million, making it the largest refugee-hosting country in the world. The most generous host country per capita is Lebanon, whose population is currently comprised of 14% refugees, which is the equivalent of the US taking in 55 million refugees. By 2019 more than 4.5 million Venezuelans were forced to leave their homes, and 1.6 million were given shelter in Colombia.
Refugees in these countries do not receive resettlement support or language training. They often live in refugee camps with little access to education, healthcare, or security, and oftentimes are not permitted to work out of concerns that they will lower wages for citizens. This is a fundamentally different situation from US resettlement, where refugees are an economic asset. Rather than being spread across the country based on the area best suited to accept them, massive populations are concentrated in small areas and oftentimes actively discouraged by the host country from integrating, out of fear that they will not return to their home country when the conflict dies down. The difficulties of life as a displaced person in a developing country are made worse by the fact that many of the displacing conflicts have become protracted, leaving people trapped in refugee camps for years or even decades.
In response to this crisis, the United Nations proposed the Global Compact for Refugees in 2018. The Compact advocates for an international plan to support developing countries bearing the burden for the refugee crisis. A key aspect of the plan include preferable trade agreements to counter the economic costs, targeting sectors with high concentrations of refugees. In exchange, the host countries would work to better integrate the refugee populations, and the refugees would be more self-sufficient and less burdensome. The European Union implemented this strategy in an agreement with Jordan which gave Jordanian industrial export companies employing refugees greater access to EU markets. However, this is not a catch-all solution to the challenge, because many refugee-hosting countries have strained relations with the United States. This makes them unlikely candidates for preferential trade agreements. For example, 88% of the 2.7 million refugees who fled Afghanistan were hosted by Iran and Pakistan by the end of 2018. It follows that only countries who have working relationships with the US and are not designated as state-sponsors of terror would be eligible.
Read More
Read the “Protecting the Nation from Foreign Terrorist Entry into the United States” executive order
Should the number of refugees resettled annually take into account the global displaced population, or should domestic factors (like budget and population growth) be the only deciding factors?
How many refugees should the US resettle annually?
Is it important for refugees to integrate into American culture? If so, should funding be increased for refugee resettlement to support integration training?
Should the US provide economic benefits to support countries sheltering large refugee populations?
Potential Reform
Do I support it?
Increase refugee intake
Decrease refugee intake
Invest in a national refugee integration program
Increase support for refugee-hosting developing countries (Global Compact on Refugees)
Appendix
Figure 1: US Permanent Resident Statistics (2010-2018)
Refugee and asylum data is individually cited, and all other data comes from the Department of Homeland Security Immigration Statistics Yearbook which is cited in the year row of the chart.
The US is one of just three highly developed countries without universal or near-universal healthcare coverage. In 2018, 28 million American were uninsured and many more have limited access to care due to out-of-pocket expenses, with estimates as high as 91 million. However, the U.S. also spends the most on healthcare of all developed countries. In 2018, 16.9% of the U.S. national GDP was spent on healthcare—almost twice that of New Zealand, Australia, or the UK.
Healthcare services are provided through a patchwork of public and private insurance plans—federal, state, and local governments; and institutional and individual providers, rather than a single-payer system.
Medicare covers the elderly and disabled population through federal funding and payroll taxes.
Medicaid covers children, pregnant women, seniors, and low-income parents, through federal and state funding. Medicare and Medicaid cover 34.4% of the insured population.
Private health insurance, including employer-provided, covers 67.3% of the insured population.
High unemployment during recessions heavily impacts the healthcare system because many lose their coverage when they lose their jobs, and fewer people contribute to Medicare through payroll taxes. Many do not have access to affordable employer or individual health insurance plans, leaving 9% of the population uninsured.
Why does healthcare in the United States cost more than in other developed countries?
The fragmentation of coverage leaves no organization with the negotiating power to drive down hospital or pharmaceutical drug costs. Americans spent 30%-190% more on pharmaceuticals than other high- income countries in 2015. Americans are also more likely to bear this financial burden with out-of-pocket expenses because of the large uninsured population, copays and deductibles. One justification for higher drug prices is increased innovation. The US leads the world in medical and drug research, because of the incentives from high profit margins for pharmaceutical companies.
Reforming the Healthcare Insurance System
The Affordable Care Act (2010) increased Medicaid and private coverage to include 20 million Americans by (1) expanding Medicaid to people making under 138% of the federal poverty level in states which opt in, (2) providing tax credits to subsidize health insurance for low income families, (3) preventing private insurance companies from denying coverage/charging higher rates to people with pre-existing health conditions. Potential reforms include:
Eliminating the ACA
Expand Medicaid by requiring all states to adopt ACA minimums(see states which have not opted in on the map in orange).
Expand Medicaid eligibility above 138% of federal poverty level
Making a national public option, which would compete with private plans
Creating a national healthcare system (Medicare for All), similar to other developed countries
The Democratic process requires an active and participatory population. Voting lies at the center of this engagement, however increasing voter turnout in the United States has proven to be a formidable challenge. Social scientists have found that voting is a lifelong habit that is most likely to be formed when first done at a young age. Thus, encouraging young people to vote can pay dividends for democracy for years to come. Many issues today affect younger voters differently than other age groups which makes their democratic participation even more valuable, such as educational costs, national debt, and climate change. Only 43% of eligible students voted in 2016 compared to 56% of all eligible voters.
Encouraging Student Voting: Campuses and Organizations
Students can vote in their hometowns via absentee ballot, or in their college town (if different). This makes universities key actors who can take several main steps to facilitate democratic participation:
Register: actively registering student voters on campus leads to higher turnout. University of Michigan tripled student turnout from 2014 to 2018 from 14 to 41% after a large scale registration initiative.
Educate: providing information on navigating voter registration, absentee ballot, and ID laws.
Facilitate dialogue: hosting debates and discussions on issues that are on the ballot box to educate students on what and whom they will be voting for.
Consider ID laws: providing ID’s that can be used at their states’ polling locations.
Groups like The National Study of Learning Voting and Engagement (NSVLE) partner with campuses to educate and guide new voters. As a result, the colleges that partner with them see significant increases in participation. In 2016, 43% of college students voted, but 48.3% of NSLVE partnered campuses. Dozens of organizations like NSVLE focus on mobilizing students across the country.
Arguments Against Student Voting
Student voting can cause friction with local communities, and is not an apolitical issue. Often, students have different ideologies than their host towns, because students tend to be more liberal than the general population, especially in rural or smaller communities. Locals perceive students as less invested in local politics because they can be insulated from the outcomes. Students may live and work on campus, purchase healthcare from their school, and return to their hometowns in the summer, and their membership in the community often comes with an expiration date upon graduation. This can cause resentment among locals who recognize a large voting bloc with the power to potentially shift election outcomes, but who are not necessarily focused on the wellbeing of the community.
Barriers to Student Voting
Student voting can be challenging because of statutory barriers, primarily voter ID laws. The 7 states in red don’t accept student IDs as voter IDs, and 5 yellow states restrict types of student IDs. In Wisconsin, student IDs must show an expiration date of less than two years and a signature. 23 of its 26 public universities and 16 of its 23 private universities did not provide ID which met both criteria. In Kentucky, student IDs must show a signature. These laws across the nation render 15% of 17-20 year olds and 11% of 21-24 year olds unable to vote.
Do users have the right to equality of access to online information?
Network neutrality is the notion that internet service providers (ISPs) like AT&T, Verizon, and Comcast must treat all online content flowing through their cables equally. This means that ISPs which connect users to information online cannot charge companies extra for access to certain services, nor can they slow down or stop providing access to certain online content. For example, under net neutrality, a large TV streaming platform like Netflix could not pay Verizon to make its TV shows stream faster than shows on a small startup platform. Shows on both platforms would stream to users at the same pace.
Net neutrality advocates champion it for two reasons:
Protecting free expression online. A handful of ISPs dominate access to the internet, and without net neutrality they could suppress particular viewpoints by making them load slowly or not at all, or by charging fees for posting particular types of content on the internet.
Enabling innovation and keeping markets free. If ISPs can provide faster access to companies which can pay them more, smaller companies will have their growth stunted at the outset.
The Federal Communications Commission (FCC) passed the Open Internet Order in 2015 establishing net neutrality as law. Prior to then, the Bush administration had enforced basic net neutrality rules, which were later expanded under the Obama administration. Under the Trump administration, the FCC reversed the 2015 order and removed all legal provisions protecting net neutrality. Instead, ISPs are required to disclose their content streaming practices to users. For example, if Verizon decided to stream Hulu faster than Netflix because Hulu paid more, Verizon would have to tell users.
The FCC’s justification for this change is that small ISPs struggle with the costs of proving they are upholding net neutrality. To show they are streaming all content equally, ISPs had to hire expensive lawyers and accountants. Large ISPs were more able to bear increased costs, while small ISPs were heavily impacted. As a result of the 2015 Open Internet Order, large ISPs had to follow stricter rules, but customers also had fewer options to switch to if they weren’t satisfied. In response to this challenge, the FEC lifted reporting requirements for ISPs serving fewer than 100,000 people.
Those opposed to net neutrality argue that a market-based system, where users have the freedom to select an ISP based on their streaming practices, is more efficient than asking the government to monitor streaming practices. One challenge to that idea is that in much of the US, only one ISP provides internet coverage to a geographic area. For 83.3 million Americans, switching based on streaming practice preferences is impossible because they only have access to service from a single provider.
The net neutrality issue is likely to continue developing through legislative and judicial means:
Antitrust issues: As it stands, blocking a competitor’s website is technically a violation of antitrust laws. But slowing down access to a competitor’s website still lingers in a murky legal realm. The line between slowing down streaming and blocking content is unclear.
States’ Rights: Since the FCC’s repeal of the 2015 net neutrality order, a federal court ruled that states can establish their own net neutrality laws, and the FCC cannot infringe upon these state laws. As a result, several states have passed laws in support of net neutrality within their borders.
The crux of the issue is whether users should have the opportunity to take streaming practices into account when selecting a network (assuming multiple ISPs cover their area), or if the government should require networks to give everyone the same rights to access online content. This risks eliminating smaller firms and empowering large firms who can afford the costs.
How much involvement do you believe the US government should have in enforcing net neutrality, if any at all?
Should platforms have the right to censor, or be responsible for, their platform’s content?
As the role of the internet in public discourse has expanded and changed, so too have the questions that the internet poses for free speech rights. A few decades ago, one of the tech world’s foremost challenges was establishing an environment in which freedom of speech operated in a similar way to the laws which predated the internet’s existence. Social media platforms like Instagram, Facebook, and Twitter have never served as impartial blank slates.These platforms have the censoring technology to establish whatever online environment and norms they choose. The question is whether they have the right to use that technology in whatever way they want to, or if the government should tell them how to use it.
Section 230 of the 1996 Communications Decency Act was a landmark policy which defined the role of online platforms in moderating content in two major ways:
Only the person who posts on a social media platform can be held liable for the content, not the platform itself.
An internet provider can restrict content it deems obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable.
Essentially, online platforms aren’t responsible for their content, but they can remove posts if they choose.
Politicians in the US government mostly call for one of these two reforms of Section 230:
Continuing to offer platforms protection from liability for content in exchange for their meeting specific government standards of moderating that content.
Increasing platforms’ accountability for content posted on their site, so they can be held liable for slander, hate speech, etc.
Either reform would change the internet freedom of speech standards that we know today.
Some argue Section 230 enables platforms to unfairly censor viewpoints under the guise of hate speech. Citizens and representatives of the Republican party frequently express concerns that giant tech companies led by liberal Silicon Valley coders are intolerant of their viewpoints. Recent attempts at reform include proposed legislation to remove Section 230 protections from platforms unless they prove they do not moderate content to disadvantage a political perspective. A more extreme proposal is to prevent platforms from censoring content unless it violates the law, such as libel and hate speech.
Others are concerned about the effects of a lack of moderation. Violent extremists use social media to spread propaganda, recruit members, and organize attacks. People can unknowingly spread disinformation with dangerous consequences, like rumors that social distancing and masks were ineffective against Covid-19, leading to otherwise-preventable outbreaks. Worse still, malevolent actors use social media to intentionally spread misinformation, seen recently in the Russian government’s efforts to disrupt American elections by promoting conspiracy theories about Democratic candidates.
Of the four biggest online players, Facebook, Youtube (owned by Google), Twitter, and Reddit, Facebook has taken the most public heat for its content moderation practices. In response, in February of 2020, Facebook shared a whitepaper arguing that a governmental body should be in charge of determining what Facebook should keep up and take down; that the responsibility of moderating content guidelines should not be with platforms. Recently, Facebook has created what it calls the Supreme Court for content moderation, which will have 40 seats filled by topic experts who are independent of Facebook.
The question going forward will be how the government intervenes. In a dynamic online world, policing speech has required — and will continue to require — new norms of regulation.
Where do you think the US system should sit on this range of censorship expectations?
The US campaign finance system is defined by three issues: freedom of speech vs. equality, disclosure, and enforcement. It is a uniquely challenging policy issue because every policymaker was elected and funded through the current system. Campaigns are expensive and increase in cost every year, forcing elected officials to rely more and more on those who can afford to donate large sums every election cycle, and making it less likely officials will pass legislation limiting the power of that same group. In 2016, the cost winning federal office was: $957.6 million for the presidency, $19.4 million for a Senate seat, and $1.6 million for a House seat. That year 85.3% of Senate races and 95.4% of House races were won by the candidate which spent the most.
The US system leans towards free speech, and has fewer regulations than most liberal democracies. The only two elements which push the US towards the equality side of the spectrum are (1) an individual contribution limit, which is a cap on the amount individuals can donate to a campaign and (2) a public financing system where presidential candidates can receive a grant instead of accepting contributions. However, elections have become too expensive for public financing to be viable. In the landmark decision Citizens United (2010), the Supreme Court decided individuals and corporations could spend as much as they want to support a candidate as long as that spending was independent of the campaign (outside spending). This case (and decisions based on the ruling) lead to the creation of Super PACs; groups which can raise and spend unlimited funds during an election. Regular PACs work with campaigns to raise and spend, so they have the same contribution limits. Following the Citizens United decision, outside spending increased by 841% over 8 years to $2.8 billion in 2016. Reformers suggest limiting or banning outside spending or improving the public financing system to reduce the potential for corruption.
Disclosure is the policy where sources of campaign or political advocacy (like advertisements) funding are available to the public. The US has limited disclosure, where PACs, Super PACs, and campaigns report all of their donors but the organizations and corporations which donate to them do not disclose their donors so in many cases it is still not clear where the money is coming from. Political spending where the source is not disclosed is called dark money. Disclosure reformers suggest mandating that groups contributing above a certain amount disclose their donors, and the debate is around what that amount should be.
The Federal Election Commission is a 6-person board responsible for enforcing all federal election laws. It struggles with gridlock and partisanship because four people are required to approve any enforcement actions which happens rarely, and it has been short of two members for the past two years. The FEC moves slowly and seldom has consensus, so campaign finance violations are not always punished, and if they are the information does not reach voters until years after the election. Solutions to reform the FEC include creating an appeals process for issues which haven’t reached four votes, mandating faster response times, and restructuring the board to streamline enforcement.
Introduction
Campaign finance is the system by which money is raised and spent to advocate for a candidate or policies during an election. Every democracy in the world wrestles with what kind of system works best for them. This is important because money gives candidates and activists the ability to reach potential voters and persuade them of their message. Money equates to the size of the megaphone; if you don’t agree with what is being said you still won’t vote for it, but in our crowded media market the main challenge is getting potential voters to hear your message at all. To understand the campaign finance discussion and develop your point of view, it is essential to understand three main topics: freedom of speech versus equality, disclosure, and enforcement.
First, freedom of speech versus equality in the campaign finance system: Every step taken to ensure the system allows each person an equal voice also limits some people’s ability to express their beliefs and ideas. For example, if individuals are allowed to contribute a maximum of one thousand dollars to a political campaign, this preserves some amount of equality for a candidate and their supporters, many of whom cannot afford to contribute that amount. But it also limits the freedom of speech of those who can afford to give more than a thousand dollars and want to spend their money supporting a candidate who represents their beliefs. Outside spending, or spending which advocates during an election but is not controlled by a candidate, is another controversial piece of the puzzle. There are many reasonable perspectives on this issue, and which perspective the US system should adopt is highly contentious.
Second, disclosure: Disclosure is the process of revealing the amount and source of campaign spending to the public. It is a less polarizing issue, but is still debated in the US. One example of disclosure is a Super PAC that spends millions of dollars in a Presidential election and is transparent about the corporations that are footing the bill. Another example is a Congressional candidate sharing the names of every donor who contributed to their campaign, and everything in between. The Supreme Court has repeatedly ruled that mandatory disclosure for funding sources is legal, necessary, and the antidote to corruption in the political system, because it allows voters to weigh the merits of an argument while keeping in mind the interests of those putting forward the message. In fact, many view strict disclosure requirements as a way to avoid restrictions on campaign contributions while maintaining efficacy of elections. For example, voters may take a message bashing a climate change activist with a grain of salt if they know the ads are paid for by a logging company, which many see as preferable to banning the logging company from donating altogether. However, some argue this denies all individuals the opportunity to be listened to fairly, because people may weigh messages with a preconceived bias depending on where the messages come from. This is not a widely-shared belief, and the main issue in the disclosure debate is to what extent should disclosure exist, not whether it should exist at all.
Third, enforcement: Whether American laws should be enforced cannot and should not be up for debate. However, the current US campaign finance system relies on enforcement from the Federal Election Commission and there are questions about whether this system and structure is an effective enforcement method. Many feel the FEC has a deeply flawed structure. At its worst it has become a tool for those who do not agree with current policies to stop them from being implemented, but even without intentional sabotage the FEC does not appear to be currently capable of enforcing the campaign finance legislation that safeguards American democracy. This is the least divisive topic of the three, but equally important. The main issue is finding the most effective way to restructure the FEC.
Campaign finance reform is a uniquely challenging political issue. Every person in elected office who would play a role in reforming the system is also a byproduct of the system, because they were elected and funded using the existing rules. It is difficult for a politician to call for, for example, a ban on outside spending when they were likely elected through a campaign reliant on outside spending. As elections become more and more expensive, it becomes harder and harder for elected officials to rail against the system for fear of alienating the funders they need to win reelection. Recently, there has been a movement on the progressive side of the Democratic Party to refuse support from Super PACs and corporations, essentially taking campaign finance into their own hands. While this is an interesting development, neither party has put forward meaningful campaign finance reform.
Appendix 1 provides a description of key terms relating to campaign finance. For those new to the field of campaign finance, it can be helpful to either read Appendix 1 in advance or refer to it while reading the report.
Historical Overview
Pre-1971 System
Prior to the Federal Election Campaign Act and its amendments, the US passed a series of laws regulating campaign finances to limit corporate and union campaign contributions and manage disclosure of contributions to the public. The system was patchwork, not comprehensive, and lacked a body to oversee and enforce.
Campaign finance issues became apparent during the investigations of President Nixon, which led to an overhaul of the current system and a national desire for robust campaign finance reform.
1971 and 1974: Federal Election Campaign Act and Amendments
The Federal Election Campaign Act and its Amendments (passed 1971-4) provided the basis for the current campaign finance system. They put in place disclosure requirements for all campaign contributions and expenditures, and limits on how much can be contributed per election cycle:
An individual could give to a candidate
An individual could spend advocating for a candidate (a.k.a. outside/independent spending)
An individual could give to any campaign overall (at that time it was $25,000)
A candidate could give to their own campaign
Each campaign could spend on election activities
All of these limits solely apply to federal elections, not state or local elections. The 1971-4 Act also established the Federal Election Committee (FEC), an independent body to oversee the new regulations, and provided the basis for public funding for federal election campaigns (read more about this system in the Current Policies section).
Buckley v. Valeo challenged the constitutionality of the Federal Election Campaign Act and its Amendments. Most of the provisions were found to be constitutional, because they fulfilled the purpose of limiting improper influence from campaign spending on the government without infringing on the First Amendment right to freedom of speech. However, the limits on how much an individual could spend advocating for a candidate (a.k.a. outside/independent spending) were struck down, as were the limits on how much a candidate could give to their own campaign, and how much a campaign could spend. In that decision, the Supreme Court decided that the value of outside spending is decreased, “probably not by 95%.” This means that the Supreme Court viewed spending on behalf of a candidate which was uncoordinated with the candidate as roughly 6% of the value of a direct campaign contribution, which was not enough value to improperly influence the government. For example, if an individual spent $100 to influence a campaign, that is the equivalent of giving $6 to a campaign. This precedent was never overruled, and still affects contemporary campaign finance laws.
Soft money contributions to political parties were banned. “Soft money” is funding which is not monitored by the FEC because it is intended to be spent on local or state elections rather than federal elections . Because soft money was not subject to the same caps and disclosure regulations as hard money (money going to federal elections), it provided a loophole to funnel additional funding into the federal campaign finance system. Corporations could give unlimited amounts of money to the National Democratic Party or the National Republican Party without disclosing their names or the amounts to the public. The national parties could then use the money for anything that didn’t specifically identify a federal election or candidate, even if their federal candidates benefited. This included things like voter drives and mobilization efforts, as well as “issue ads” which advocated for a policy position. During the 2001-2002 election cycle, national party committees (both Democrat and Republican) collectively spent $86 million of hard money and $217 million of soft money to state affiliates, including outsized spending in states with competitive senate elections.
“Electioneering” communications funded by corporations or labor unions were banned. “An electioneering communication is generally defined as ‘any broadcast, cable or satellite communication’ that is ‘publicly distributed’ and refers to a clearly identified federal candidate and is made within 30 days of a primary or 60 days of a general election.”
2010: Citizens United v. FEC
This court case overturned limits on corporate and labor union spending, or the “electioneering” aspect of the BCRA. The Court found that prohibiting corporate and labor union spending on electioneering communications within 60 days of the election amounted to limiting freedom of speech. An important precedent was also set by the decision. The FEC argued that limiting freedom of speech in this case was necessary because of compelling corruption concerns. The Court overruled this idea, essentially saying limiting independent expenditures did not serve an anti-corruption interest. In the 2008 election cycle, outside spending totaled $300 million. Following the Citizens United decision, outside spending in 2012 totaled $1.2 billion.
2010: SpeechNow v. FEC
This court case allowed corporations, labor unions, and individuals to contribute to political committees without a limit, based on the idea from Citizens United that funding from independent groups could not be limited by anti-corruption arguments. This led to the creation of Super PACs, or political action committees independent from the campaign which attempts to influence federal election outcomes. Regular PACs are political committees which coordinate with the campaign to raise and spend fundraising revenue. Because Super PACs are not supposed to coordinate with campaigns, they can raise unlimited amounts from individuals and corporations.
2014: McCutcheon v. FEC
McCutcheon v. FEC struck down limits on how a single donor could give to a variety of candidates, PACs, and parties. Individual contribution limits still exist, but limits on the aggregate amount an individual can spend in an election cycle do not. The original principle was established by the 1971-4 Act and Amendments. The McCutcheon decision increased the importance of Joint Fundraising Committees (JFCs), which are coalitions of PACs, parties, and candidates who split the results of fundraising. A single donor can contribute millions of dollars to a JFC, where it is then split between a candidate, national party, and state parties. JFCs raised $1.2 billion during the 2016 election cycle, the most in US history. The following chart shows JFC fundraising made up more than a quarter of all large-dollar contributions in 2016. To view the base data, see Appendix 4.1)
The Current Policies section begins with state and general policies, and then discusses policies categorized by the three campaign finance themes: freedom of speech vs. equality, disclosure, and enforcement.
State and General Policies
Variation in State Policies
Campaign finance policies are divided between federal and state. On a state level, policies vary widely and there are often fewer regulations than at the federal level. Every state requires campaigns to disclose their direct contributors, and the amount of time between the contribution and the reporting deadline varies from state to state. For example, in the ten days running up to Florida state elections, campaigns must report their contributions daily so that voters have the most up to date information going into the voting booth. In Iowa, the last reporting deadline is more than three weeks from the election, so individuals and corporations can contribute the maximum amount to influence the election in the weeks prior, and voters will not be informed about who is funding their candidates until the two months after the election.
Forty-seven states also have disclosure regulations for outside spending, and the requirements vary as much for outside spending as for campaign contributions. New York requires outside spending to be reported within twenty-four hours if it is within thirty days of an election, and New Jersey’s requirement is forty-eight hours. In Massachusetts and Minnesota the last deadline to report outside spending is ten days before the election and any outside spending within the last ten days is reported thirty days after. Indiana, New Mexico, and South Carolina do not require outside spending to be reported at all.
Contribution limits also vary by state. Eleven states have no contribution limits, and following data pertains to the other thirty-nine.
The states without contribution limits for individual donors are: Alabama, Indiana, Iowa, Mississippi, Nebraska, North Dakota, Oregon, Pennsylvania, Texas, Utah, and Virginia.
State Policies and Soft Money
The 2002 Bipartisan Campaign Finance Act banned national political parties from accepting soft money. This was an important step in limiting the role of unlimited and undisclosed funding impacting federal elections but it did not close the loophole altogether. Instead, associations exclusively involved in local and state politics disaffiliated from their national democratic and republican counterparts. For example, the Democratic Governors Association and the Republican Governors Association disaffiliated with the National Democratic Party and National Republican Party because they represent governors who run for state office. These associations can still accept soft money and continue the same activities as before, which benefit candidates for federal office. The Governors Associations can allocate their funds towards advertising and voter registration in states like Pennsylvania and Florida in presidential election years or target vulnerable senators from the opposite party when they are up for reelection.
Public Funding for Campaigns
The 1971-4 Act and Amendments established the basis for public funding for presidential campaigns. Funding is available for both the primary and the general election. There are no public funding options for congressional elections. The system differs for primary and general elections. In the primary election, the federal government matches campaign contributions to a candidate who meets certain fundraising goals. In exchange, the candidate agrees to an aggregate limit on spending, a cap on spending from their personal funds, and limitations of spending in each state based on the state’s population. In the general election, candidates from major parties can receive a grant which is $103.7 million in 2020. In exchange, the candidate cannot accept private contributions and agrees to a cap on spending from their person funds. An avenue also exists to fund a new or minor party. For more details on the public financing system, see Appendix 2.2.
Campaigns have grown so expensive over the past decade that it is no longer a feasible option for candidates to accept federal funding and forego fundraising events. John McCain, the 2008 Republican presidential candidate, was the last person to use the public financing option. President Trump’s winning 2016 campaign cost $957.6 million, which dwarfs the $96.14 million offered to candidates relying on public funding. This is an issue because public funding for presidential campaigns exists so that candidates have the option of getting their message to voters without courting donations. Relying on donations forces candidates to cater to high-income Americans who have disposable income, and corporations.
Freedom of Speech vs. Equality
US federal policies tend to lean more in the direction of freedom of speech. This is due to America’s history of prioritizing freedoms above all else, but also because equality-leaning policies which are passed by the US government are ruled unconstitutional by the Supreme Court. This indicates that the priorities of the American people (and their elected representatives) sometimes differs from the Constitutional framework valued by the un-elected Supreme Court Justices (for more on the background of policies and court decisions, see the Historical Overview section).
Limits vs. Useful Market
There are two main ways to preserve equality in the campaign finance system. The first involves placing limits on spending in a myriad of ways. These limits could apply to the amount an individual can contribute to a campaign, the amount the campaign can spend, the amount an individual can contribute in one election cycle, etc. Limits are generally seen as a more invasive way of preserving equality. The second option is by narrowing the useful market of campaign spending. The useful market is the area where campaign spending can be used effectively to promote a candidate. In the US, the useful market is virtually unlimited because campaigns are not bound to specific time frames or advertising through specific mediums. Narrowing the useful market involves actions like prohibiting tv/radio advertising past a certain amount or limiting the available advertising mediums in some other way, creating a time frame for a campaign before which advertising is prohibited, etc. By narrowing the useful market, individuals are still able to contribute in any way and amount they see fit (thereby preserving some freedom) but the value of their contribution in changing the outcome of the election after the useful market is saturated is minimal.
Contribution Limits and Loopholes
Contributions limits are one of the few limits which have been consistently approved by the Supreme Court.
Limits are placed on the amount an individual, PAC, and party committee can contribute to campaigns, PACs, and party committees each year. For the 2019-2020 election cycle, individuals can contribute up to $2,800 to a candidate. To see the FEC’s full guidelines on contribution limits, see Appendix 2.1.
Corporations and labor unions are not allowed to directly contribute to a campaign. However, they can contribute a PAC which directly coordinates with the campaign as well as a Super PAC which advertises on behalf of a campaign.
Foreign nationals who do not have US Green Cards are prohibited from donating to US campaigns. However, foreign corporations can donate to US super PACs if they have US subsidiary companies. A subsidiary is a company that is owned by another company, called the parent company. For example: British American Tobacco is a U.K company that purchased Reynolds American, Inc., a US company, in 2017, making Reynolds American, Inc. a US subsidiary. In the 2018 election cycle, Reynolds American, Inc. gave $1.2 million to political campaigns in the US.
Aggregate limit
At this time there is no aggregate limit on the amount an individual can contribute in one election cycle. This aggregate limit was eliminated in the McCutcheon v. FEC Supreme Court Decision (2014).
Outside spending
Currently, there is no limit on outside spending, or spending on political advertising which is independent of the campaign. The outside spending limitation was eliminated in the Citizens United v. FEC Supreme Court Decision (2010). Since the limits were eliminated, outside spending and Super PAC funds have risen from $300 million in the 2008 election to $2,824.6 million in the 2016 election, an increase of 841% in just eight years (in this case, Super PAC and outside spending is used as a catch-all term for spending from nonconnected political committees, primarily Super PACs.
Super PACs are a major conduit for outside spending. It is common for campaigns to communicate strategies to Super PACs in ways which do not violate FEC regulations but undermine the purpose of the Super PAC. The Super PAC is often run by political operatives familiar with the campaign and the candidate, raising questions about whether they can truly be “independent.” Furthermore, an in-depth study on independent expenditures spanning both parties found campaigns used strategies like: “creating a campaign advertisement but purchasing little airtime for it, and then putting out an accompanying press release stating that the ad is ‘really moving voters,’” or else releasing “b-roll, high-resolution photographs, and targeted talking points, either available through a hidden link on the campaign’s website or through some other microsite or YouTube account. Outside groups would then pick up the footage and use it in their own ads.” Campaigns are careful not to communicate directly, but instead pass messages through mutual acquaintances or other third parties to ensure Super PACs pick up on their hints. In this way, Super PACs operate much more like regular PACs but without the oversight, regulations, and contribution caps.
(Source: FEC, for base data and sources see Appendix 4.2)
Disclosure
All funding from political committees, PACs, Super PACs, and individual contributions is supposed to be disclosed. The FEC requires reporting on the donor and amount donated, and makes that information available to the public. However, if funding comes to the PAC or SuperPAC from 501(c)(4) organization, the donors and amounts are not disclosed. Money where the donor is not disclosed is known as dark money. The only deciding factor between a 501(c)(4) organization and a political committee is what percentage of the organization’s budget is spent on political advocacy. If it is below 50% it is a 501(c)(4) and can keep its donors undisclosed. Many donors use this loophole to obscure their involvement in elections.
Furthermore, the FEC definition of political advocacy is a major asset to 501(c)(4) organizations. Paying for the distribution of an advertisement counts as “political advocacy” but the cost of producing that advertisement does not. For example, if an individual starts a 501(c)(4) organization with a million dollars, spends half of that money producing a national ad campaign and the other half distributing it, that organization legally does not have to disclose its donors.
Enforcement and the FEC
The FEC is responsible for the enforcement of all campaign finance legislation, meaning that if the FEC doesn’t function properly, it does not matter what kind of policies are put in place. The FEC has a board with six Commissioners, as well as a general body. The Commissioners are responsible for initiating audits and investigations on individuals and organizations suspected of violating campaign finance policies. The general body does the investigating and reports back to the board. In 2017, the FEC’s budget was $79 million. There are several structural barriers which hamper the effectiveness of the FEC in its oversight and enforcement duties.
Gridlock: A maximum of three Commissioners can be from the same party in order to maintain balance on the board, and four votes are needed to proceed with any board action. While this was intended to stop partisan attacks from the FEC, it has also had the effect of causing intense gridlock on the board. If four Commissioners don’t agree, there is no recourse or appeals process to continue pursuing a valid campaign finance infraction. In 2016, with all 6 seats filled, the board gridlocked on 30% of enforcement issues.
Empty Seats: The gridlock problem is amplified when the board is not fully staffed. Currently, only four seats are filled, meaning a consensus among the two republicans, one democrat, and one independent on the board is required before instigating any sort of investigation or enforcement. From August 2019 to May 2020, only three seats were filled on the board so the FEC was at a standstill. This has only happened once before in the history of the FEC, when the board only had three seats filled for several months in 2008. New Commissioners are first selected by the president and then confirmed by the Senate. Although the board has been short of at least one Commissioner since the early days of the Trump presidency, President Trump has only nominated one replacement, who was recently confirmed. For a timeline of all FEC Commissioners and vacancies, see Appendix 2.3.
Priorities: One of the FEC’s main priorities is focusing on cases where it feels it can have the most impact. That sounds reasonable, but in practice it means that as soon as an organization feels it is genuinely in danger of being penalized by the FEC, it liquidates. The FEC sees little value in investigating or punishing the members of a defunct organization, and so the issue is dropped and the same offenders are free to restart the cycle with a clean record. This creates, for lack of a better analogy, a game of dark money whack-a-mole.
Statute of Limitations: The statute of limitations for most campaign finance violations is five years, and currently the FEC investigation system does not move quickly enough to prosecute many violators within that time frame. This is especially jarring because for democracy to work effectively, voters would ideally know about campaign finance violations prior to voting in an election, rather than five years after the election when likely the information has no impact on them.
Interpretation of Campaign Spending: Commissioners who turned down a campaign finance violation complaint recently came out with reasoning which severely limits the purview of the FEC’s enforcement and the definition of a political committee. In the case CREW v. FEC (New Models), the Commissioners reasoned that contributions to Super PACs did not count towards the 50% requirement which makes an organization a political committee and not a social welfare organization. This is important because social welfare organizations do not have to disclose their donors but political committees do, and in many occasions the only thing separating the two is that 50% requirement. It is also important because the FEC’s definition means organizations can funnel unlimited amounts of money to Super PACs without having to disclose their donors, because the FEC does not recognize Super PAC contributions as efforts to influence elections.
Interpretation of Prosecutorial Discretion: Currently, if watchdog organizations or other actors disagree with an FEC decision or think they are not fulfilling their role properly, they can sue the FEC in federal court. The court then decides whether the FEC made the right call, and can demand that the FEC reassess their decision. However, in the recent court case CREW v. FEC (CHGO), the court ruled that virtually any time the FEC claims “prosecutorial discretion” it has the right to dismiss any violation it sees fit. Prosecutorial discretion is the concept that the FEC is best informed on its own enforcement priorities, use of resources, and the likelihood of success in a trial. It is not meant to be a catch all excuse for avoiding oversight, but that is the current status quo.
Many of these issues can be seen in the story of the FEC investigation of New Models. New Models registered as a 501(c)(4) social welfare organization and put more than $3 million in 2012 towards Super PACs to influence the 2012 election in one party’s favor. This amounted to nearly 70% of New Models’ total spending that year. CREW, a nonprofit watchdog, reported New Models to the FEC in 2014 for violating campaign finance law. The FEC’s general body investigated New Models and, in 2015, recommended that the board take action against New Models for influencing a federal election without registering as a political committee and disclosing its donors. New Models liquidated that same year. No action was taken until two years later, in 2017, when the FEC voted on the New Models issue with only four seats filled. The board was split 2-2, with the two Commissioners from the party which New Models supported voting to dismiss the case. The case was then dismissed because of the 2-2 standstill and no action was taken against New Models or the people running it.
Current Data
Spending Types in the Status Quo
This data demonstrates that large dollar contributions have dominated political expenditures, and Super PAC spending is increasing dramatically following the Citizens United decision. Large dollar contributions are more than $200 and they are consistently made by less than 0.5% of American citizens and are commonly channeled through Joint Fundraising Committees which allow one mega-doner to write a single check and max out contributions for every level and candidate of a political party.
(Source: FEC, for base date and sources see Appendix 4.3. Please note there was no available data for small dollar contributions in 2008 so the demonstrated amount is based on estimates.)
Impact on Election
Some citizens may be tempted to assume that ideas win out over money, but with few exceptions that proved to be false. In 2016 95.4% of House races and 85.3% of Senate races were won by the candidates who spent the most. These percentages are consistent in elections throughout the 21st century. That same year, the average winning House seat cost $1.6 million and the Senate seat cost $19.4 million. A handful of high-profile wins by candidates with less funding (President Trump against Hillary Clinton and Jeb Bush, the rise of AOC, etc.) are used to create the myth that money doesn’t substantially impact the outcome of an election. But these are a few exceptions to the rule, and they stand out because they overcame a system stacked against them rather than because the system wasn’t stacked. Because individual contributions can only be raised $2,800 at a time, and even that amount is outside the bounds of possibility for the average American, it makes far more sense strategically to fundraise from large corporate donors who can donate unlimited amounts to a Super PAC. The connection between spending and election success incentivizes candidates to appeal to corporate interests that can afford to write big checks. Corporations want something in return for their financial support, like industry-specific regulation changes, which distorts the policy priorities of politicians.
This section begins with campaign finance systems in other democracies and the reforms implemented in those countries, then discusses recent efforts to reform the US system, and concludes with a discussion of other potential reforms which is divided into freedom of speech vs. equality, disclosure, and enforcement.
Campaign Finance in Other Democracies
Overview
While the US system leans towards preserving freedom of speech, many European campaign finance models are designed to produce fairness and equality in the electoral system. These two values compete in campaign finance, where equality necessarily means lifting up some and limiting others to create an even playing field. In the Buckley v. Valeo decision (read more about Buckley v. Valeo in the Historical Overview section), the Supreme Court stated “the concept that government may restrict the speech of some elements of our society in order to enhance the relative voice of others is wholly foreign to the First Amendment.” This divergence in values is the root of the differences which arise between the systems. It is important for citizens to consider if the tradeoff is worth it to them, and if the benefits of unfettered freedom of speech outweigh the cost of a government more susceptible to corruption and less responsive to the needs of the segment of the population that cannot afford to contribute to political campaigns.
It is also worth considering that the US system has produced one of the lowest voter turnout records in the developed world. While there are undoubtedly many factors which lead to low voter turnout, the emphasis on freedom of speech does not seem to bolster Americans’ interest in elections or elected officials, and limitations on outside spending, advertising, and campaign time frames have not had a chilling effect on democratic turnout in the countries which implemented them. To see US voter turnout data from 1800-present, see Appendix 2.3.
The longer a campaign is, the more expensive it has to be to sustain itself so limiting the time frame reduces the necessity of expensive campaigns. However, this system could also be seen as favoring the incumbent, because they have the ability to be seen by the public and make a positive impression throughout their time in office while the challenger is more limited to the campaign time frame in their ability to reach voters. In addition, it could be argued that limiting the time frame of a campaign makes it harder for voters to become informed on candidates and issues.
Allocate TV and radio time
Many countries give all candidates equal access to TV and radio advertising, free of charge. TV advertising is usually the most expensive part of a campaign, so allocating it would reduce the cost of the campaign overall and give each candidate equal opportunity to reach voters.
Ceiling on overall spending
A ceiling on overall spending reduces the importance of donations and slows the ever-increasing costs of elections. A ceiling was introduced in the 1971-4 Campaign Finance Act and Amendments, but was struck down by the Supreme Court Case Buckley v. Valeo.
Public financing system
The public financing system in the US was effective for decades, but the cost of a successful presidential campaign continued to rise and the public financing system did not increase at the same rate. This made the system impossible for presidential candidates to use, even if they believed in the principle. Reforming this system in a sustainable way would require some other limitation on the useful market, otherwise the system would become obsolete again as campaign costs continue to rise. Public financing could also be expanded to Senate and House campaigns.
Many other democracies have public financing systems for their equivalent of presidential and congressional elections. Some countries match all small dollar contributions to candidates in order to amplify their effect. Another strategy is to give public funding to candidates based on the percentage of the vote they received in previous elections.
Recent Efforts to Reform
H.R. 1 For the People Act of 2019
The first bill passed by the House in 2019 included meaningful campaign finance reform. This bill was not passed in the Senate. It requires the FEC to conduct an audit after each election cycle to assess whether any illicit foreign funds were used. The bill also tightened disclosure requirements for political committees and LLCs but not for other organizations not already covered by disclosure requirements like 501(c)(4)s. The For the People Act also created public campaign financing infrastructure. It provided for the establishment of a Freedom From Influence Fund, which matched small dollar contributions to House candidates, and provided each citizen with a $25 voucher to contribute to a House candidate.
In addition, the bill proposed reforming the FEC by making it a five-person commission instead of six. Currently, no more than three Commissioners can be from the same party, but this reform would instead limit each party to two Commissioners with the fifth Commissioner completely independent from either party. Resolutions would pass with three votes instead of four. In the status quo, it takes four commissioners to agree that a violation has occurred in order to take action against the party being investigated. H.R. 1 changes the FEC process so that a majority of Commissioners would have to disagree with the general body’s conclusion in order to stop action being taken. This means that instead of a quorum being required to proceed, a quorum would be required to not proceed.
Federal Election Administration Act (2016)
The Federal Election Administration Act was introduced into the Senate by Tom Udall of New Mexico, but it was never voted on. This Act would abolish the FEC and replace it with a Federal Election Administration (FEA), similar in structure to the reformed version suggested in H.R. 1. It would also include an empowered chairperson to streamline the administrative process and increase accountability. Other agencies with enforcement obligations (like the EPA) use administrative judges to enforce decisions about violations. This bill creates that policy for the FEA to create a legal process for campaign finance violations which allows for sentencing and appeals.
Constitutional Amendment
An important barrier to meaningful campaign finance reform has been the Supreme Court, which ruled repeatedly against limitations on outside spending, and aggregate spending caps for campaigns and individuals. These limits were ruled unconstitutional because they infringed on the First Amendment, the right to freedom of speech. One solution to this challenge would be a constitutional amendment permitting campaign finance limitations. A constitutional amendment can be ratified in two ways. First, two thirds of the House and Senate vote for it, then three quarters of the state legislatures vote for it. The second path (which has never been used) requires two thirds of states to call a Constitutional Convention and propose amendments, and then three quarters of states to support the amendment.
Multiple constitutional amendments have been introduced in both the House and Senate since the 2010 Citizens United decision. The first amendment was proposed in 2011 and it was called the Saving American Democracy Amendment. It failed to pass in the House or the Senate.
Adam Schiff, House Representative from California, introduced a constitutional amendment in 2019 which clarified that reasonable restrictions on outside spending and contribution limits were not prohibited by the Constitution. It also suggested (but did not mandate) that public financing of campaigns was another way to restrict wealth’s undue influence on government.
The We the People Amendment was also introduced in 2019, and along with permitting campaign finance restrictions it also clarified that Constitutional rights do not apply to corporations. This is a contentious issue which reaches farther than campaign finance regulations, but is related to Citizens United because the Supreme Court decision allowed corporations to participate in outside spending and express advocacy because of the corporation’s right to freedom of speech.
Additional Reforms
Freedom of Speech vs. Equality Reforms
Make Independent Expenditures Independent
In the status quo, “independent expenditures” or outside spending exists in name alone for the majority of spending. Super PACS, often run by close friends of former staff members of the candidate who they are supporting, have an intimate understanding of the goals and objectives of the campaign. Rather than acting as independent conduit of free speech, Super PACs have become an extension of the campaign with unlimited fundraising and spending potential. One way to change this would be to treat collusion between Super PACs and campaigns as insider trading, where any material, non-public information which is used by the Super PAC to influence their advocacy efforts is a criminal offense.
Limit Outside Spending to Buckley v. Valeo Expectations
The Supreme Court in Buckley v. Valeo decided outside spending has 6% of the value of direct campaign contributions to a campaign. Direct contributions are limited to $2,800 per individual, so one solution which is inline with the Buckley decision would be to limit outside spending to $46,667. If you take 6% of $46,667 it is $2,800, so this limit creates essentially the same campaign contribution limit which has already been approved by the courts.
Disclosure Reforms
Appropriate Disclosure Level
A debate rages in the US regarding how extensive disclosure requirements should be. The current level, where PACs and Super PACs must disclose their sources of funding but the organizations which are the sources are not required to, is a limited level of disclosure. In the Citizens United decision, the Supreme Court explained that disclosure is essential because it “helps citizens make informed choices in the political marketplace.” However, the disclosure requirements did not keep up with the changes in types of organizations allowed to participate in election advocacy. 501(c)(4) organizations, the main culprits, only became a real factor in campaign finance after the Citizens United decision in 2010.
In the status quo, 501(c)(4) organizations can only put 50% of their spending towards political advocacy. This is disclosure at the 50% level. The other side of the spectrum would be that any organization who puts any money towards political advocacy has to disclose their donors, or 100% disclosure. However, there are concerns that if political advocacy is a minimal part of an organization’s activities, it is not appropriate to connect their donors to the political advocacy. For example, if someone donates to PETA (People for the Ethical Treatment of Animals) they may expect their money to go to maintaining a list of cruelty-free companies, creating and distributing vegan recipes, or advertising about animal welfare issues. If PETA decides to contribute to a Super PAC supporting a presidential candidate, releasing the names of PETA’s financial supporters is not only unhelpful, but it actively works against citizens making informed choices in the political marketplace because it muddies the water by bringing in private citizens unconnected to the funding decision.
The next step in disclosure reform is to decide on the new level of disclosure which is beneficial to American democracy in the post-Citizens United era.
Change the Definition of Independent Expenditures
In the status quo, only spending which literally involves distributing the message is considered “political advocacy” meaning the cost of producing advertising campaigns is not included. Paying an advertising firm to develop a commercial is separate from buying air time for that commercial. One way to improve disclosure is by changing the definition of “independent expenditure” to include all aspects of political advocacy, not just buying air time. This broader definition would increase disclosure from 501(c)(4) organizations and provide the American public with a holistic view of money in politics.
Improve Enforcement by Restructuring the FEC
In addition to the FEC reforms which have already been introduced in Congress (although not passed) there are several other structural changes which could improve the process.
Require all six seats to be filled at all times. One serious challenge to FEC enforcement is the need for four Commissioners to agree to understand any action for it to pass. The likelihood of an action being undertaken shrinks even further when less than six seats are filled. To solve this problem, there needs to be an enforcement method for requiring all seats to be filled. This could look like requiring a full Commission before any other Senate vote can occur, or mandating that Congress cannot recess. The downside of this strategy is that by enforcing the seat requirement, other elements of the government could be slowed down.
Create an appeals process for decisions which do not reach the vote threshold. Currently, if four Commissioners do not approve an action there is no process to continue considering the action. This means that no matter how strongly some Commissioners believe that a violation has occurred, there is no resolution method within the commission. Creating an appeals process, potentially involving an administrative judge, would create an option for enforcing the most serious violations when the threshold cannot be met.
Mandate faster response times. There is very little accountability for the years-long deliberation processes commonly found at the FEC. Response times for each step of the process should be mandated so that voters receive campaign finance information in a timely fashion. The FEC should be accountable to a bipartisan committee if it frequently exceeds the reasonable time frames.
Change FEC priorities. Currently, the FEC prioritizes cases where it believes it can have the most impact, which creates a loophole where organizations under scrutiny liquidate to minimize the apparent impact of prosecuting their violations. While it is important to ensure FEC enforcement has an impact, the FEC needs to recognize the value of cracking down on organizations utilizing the loophole in order to stop the practice and decrease the misuse of 501(c)(4) organizations in the long run. Making this change could include increasing the FEC’s budget for its auditing team so that other impactful cases are not neglected. The 2017 budget was $79 million.
Now that you have finished an overview of the main aspects and challenges of campaign finance reform, consider these questions to help you establish your perspective:
Where do I think the US system should sit on this range?
How do I feel about where the US’s current system sits on the sliding scale of freedom of speech to equality?
What aspects of equality in the campaign finance system am I willing to give up to preserve freedom of speech? What limitations on freedom of speech am I willing to trade for equality?
Should corporations be allowed to advocate in elections?
Should outside spending in elections be allowed?
Which reforms (if any) should be undertaken in the freedom of speech vs. equality section of campaign finance reform?
Where do I sit on the disclosure range?
What level of disclosure in the campaign finance system am I comfortable with? What are the costs and benefits of that level of disclosure?
Am I happy with the status quo, where organizations spending 50% of their money on political advocacy do not have to disclose their donors?
How satisfied am I with the current enforcement of campaign finance regulations?
Would you consider campaign finance reform to be in the top tier of your political priorities?
How has your opinion on the importance of campaign finance as a policy issue changed, if at all?
Appendix 1: Key Terms
1.1 FEC
The Federal Election Commission, or the FEC, was created by the 1971-4 Federal Campaign Act and Amendments. It is the watchdog agency which monitors adherence to campaign finance regulations and enforces the policies. The FEC is led by six Commissioners who are selected by the President and confirmed by the Senate. By law, only three out of the six Commissioners can be from one political party in order to make sure the FEC maintains bipartisanship. Four out of the six votes are required to approve any FEC action, but currently only three seats are filled on the FEC. It is currently not possible for the FEC to enforce campaign finance regulations in the runup to the 2020 Presidential and Congressional elections because the necessary four seats are not filled.
Commissioners serve six year terms, but are able to continue serving past their term until a replacement has been nominated by the President and confirmed by the senate. The seats left open have been vacant from March of 2017, February of 2018, and August of 2019. President Trump has nominated one Republican to fill a seat in September of 2017, but the nomination has stalled, potentially because Republicans and Democrats are usually nominated by the President in pairs to maintain the balance of the Commission (read more about potential reforms to the FEC in the Potential Reforms section).
1.2 Individual contributions
Individual contributions are given by citizens either directly to political campaigns, or to PACs and party organizations which then redirect it to campaigns. Contributions have caps which are adjusted for inflation each year. Campaign and PAC contributions are counted together towards the contribution cap, and party organization contributions have a separate cap.
1.3 Fundraising Organizations
Political committees are organizations which contribute more than $1,000 in a year to influence federal elections, and who are either under the control of a candidate or whose major purpose is the election (or nomination) of a candidate. In order for an organization’s “major purpose” to be electing a candidate, they have to put 50% of their expenditures for a given year towards influencing federal elections. Political committees provide detailed reporting to the FEC about their expenditures, and disclose their donors and donation amounts.
PACs (political action committees) are political committees which coordinate with the campaign to raise and spend fundraising revenue. PAC donations are subject to contribution caps and must disclose their donors to the FEC.
Super PACs are separate from the campaign, and although they are not allowed to coordinate with campaigns, they are often run by people close to the candidate. Super PACs are not subject to contribution caps, so they can raise unlimited sums. Super PACs were created after the 2010 Supreme Court decision Speechnow v. FEC, where the court ruled that spending not connected to the campaign (outside spending) could not be limited. However, Super PACs still must disclose their donors to the FEC.
501(c)(4) organizations are classified by the IRS as social welfare organizations who do not operate for profit and who exclusively work to promote social welfare. They are not political committees because their major purpose is ostensibly not related to influencing a federal election. They can donate unlimited amounts to Super PACs without having to disclose their donors. The FEC decides what the “major purpose” of an organization is on a case-by-case basis.
1.4 Useful Market
The useful market is the area where campaign spending can be used effectively to promote a candidate. In the US, the useful market is virtually unlimited because campaigns are not bound to specific time frames or advertising through specific mediums. The concept of the useful market becomes important when comparing US policies with those of other countries.
1.5 Types of Money
Outside spending/independent expenditures are “independent” from the candidate. This spending is often focused on political advertising and issue ads, and “electioneering communications” (banned by the Bipartisan Campaign Reform Act but then ruled allowable by Citizens United v. FEC). Outside spending can come from non-profits, Super PACS, corporations, individuals, etc. Outside spending cannot come from regular PACs, because they coordinate with the campaign. However, there are common strategies and signaling tactics known throughout the industry which allow campaigns to communicate with their Super PACs without technically violating FEC regulations (for more on how this works, read the Current Policies Section, subsection Outside Spending).
2. Hard money is money which is monitored by the FEC because it is spent on federal elections.
3. Soft money is money intended to be spent on local and state elections, rather than federal elections. This money is regulated on a state-by-state basis, rather than by the FEC, who solely regulates money for federal elections. Soft money is frequently used for things that benefit both state and federal elections, like voter registration drives and ads which advocate specific issues without reference to a federal candidate. Up until the BCRA, national parties could accept unlimited donations of soft money, because it was not subject to the same limits which guided federal campaign donations. Read more about how soft money functioned pre- and post-BCRA in the “Current Policies” section.
4. Dark money is money which the donor cannot be traced. While PACs and Super PACs have to report their donors, 501(c)(4) organizations and shell companies do not. This causes tension in the campaign finance system, because the Supreme Court has consistently ruled that limitations on spending are unconstitutional so long as the donors are disclosed.
5. Gray money is money that is passed between PACs, which makes it difficult and time-consuming to trace the source. By passing money between PACs, the PACs can maintain the appearance of transparency while still concealing their donor base.
In the primary election, candidates must raise $5,000 in 20 states with a maximum of $250 counted per individual donation. The federal government will then match all campaign contributions to the candidate. In exchange, the campaign can only spend $10 million on the primary election, adjusted for inflation (in 2016 the adjusted limit was $48.07 million), limit spending from personal funds to $50,000, and limit spending in each state to $200,000, adjusted for inflation and the state’s population (in 2016 the limit in Wyoming was $961,400 and in California it was $23,092,100).
In the general election, candidates from a major party are eligible to receive a grant of $20 million, plus inflation (in 2020 the available grant is $103.7 million). In exchange, the candidate cannot accept private contributions and can only contribute $50,000 of their own funds. John McCain, the 2008 Republican presidential candidate, was the last person to use this option because the cost of presidential campaigns has risen so much it is no longer feasible to rely on public funds .
According to the FEC, funding is also available for “minor party” and “new party” candidates. “A minor party candidate is the nominee of a party whose candidate received between five and 25 percent of the total popular vote in the preceding presidential election. The amount of public funding to which a minor party candidate is entitled is based on the ratio of the party’s popular vote in the preceding presidential election to the average popular vote of the two major party candidates in that election. A new party candidate receives partial public funding after the election if he or she receives five percent or more of the vote. The entitlement is based on the ratio of the new party candidate’s popular vote in the current election to the average popular vote of the two major party candidates in the election.”
France pursues an aggressive campaign finance strategy. Campaign spending has an overall ceiling, and the useful market for campaign spending is controlled because the official campaign time frame is only two weeks long and no advertising is permitted prior to that. Equal time is allotted for TV and radio advertising for all candidates for free, and no other TV/radio advertising is permitted. Corporations, unions, and advocacy groups are not allowed to contribute to a campaign in any way. Individuals can contribute up to 4,600 euros ($4,992) to a candidate per election cycle. France also has a robust public funding system, where candidates are given a starting grant and then reimbursed for up to 50% of the ceiling on expenses if they receive 5% or more of the vote. This system functions for presidential elections and for the French equivalent of the House of Representatives.
3.2 New Zealand
New Zealand has a milder strategy which limits both overall spending and the useful market for outside spending. The ceiling on candidate and party expenditures is a combined US$1,959,000, meaning that is how much the party can spend in total on all of their candidates and on their party message. In New Zealand, elections are more about the party and less about the individual candidate, so the majority of spending comes from the party to promote party messages. Individual candidates can spend a maximum of NZ$26,000 ($17,240). New Zealand permits outside spending, and non-candidates can spend up to NZ$313,000 ($189,500) but not on TV or radio advertising. There is no limit on the amount an individual can contribute to a campaign.
TV advertising is strictly controlled. Each party is given a set amount of TV advertising time to communicate their message, and receive public funding to subsidize the cost of making the advertisement. Both of these allocations are based on the amount of support the party received at the previous election. Candidates can fund their own advertising pursuant to their spending ceiling, but they cannot advocate the party vote or promote negative messages.
Appendix 4: Chart Data
The section contains the base data for charts and graphs made by ACE.
*Super PAC and outside spending is used in this case as a catch-all term for contributions to nonconnected political committees, primarily Super PACs and excluding Leadership PACs, which are subject to contribution limits. The FEC separates independent expenditures and nonconnected political committee disbursements because only the act of disseminating political advocacy counts as an independent expenditure, whereas nonconnected political committee disbursements also include overhead and the cost of producing the advertisement. In 2016, nonconnected political committees (primarily Super PACs) received and disbursed more than $2.8 billion, but independent expenditures only account for $1.6 billion.
No data was available for this amount, so this estimate is based on the trend that close to 65% of individual contributions come from Large Dollar donors.
Campaign finance is the system by which money is raised and spent to advocate for a candidate or policies during an election. The US campaign finance system is defined by three issues: freedom of speech vs. equality, disclosure, and enforcement. It is a uniquely challenging policy issue because every policymaker was elected and funded through the current system. Campaigns are expensive and increase in cost every year, forcing elected officials to rely more and more on those who can afford to donate large sums every election cycle, and making it less likely officials will pass legislation limiting the power of that same group. The average spent for a successful 2016 campaign was: $957.6—Presidency, $19.4—Senate, and $1.6 million—House. That year 85.3% of Senate races and 95.4% of House races were won by the candidate which spent the most.
Balancing Freedom of Speech vs. Equality is one of the main debates in campaign finance policy. This tension exists because every step towards creating an election system with equal opportunity necessarily limits the speech of some and elevates others to bring everyone onto the same page. For example, if individuals are allowed to contribute a maximum of one thousand dollars to a political campaign, this preserves some amount of equality for a candidate and their supporters, many of whom cannot afford to contribute that amount. But it also limits the freedom of speech of those who can afford to give more than a thousand dollars and want to spend their money supporting a candidate who represents their beliefs. The US system leans towards free speech, and has fewer regulations than most liberal democracies. The only two elements which push the US towards the equality side of the spectrum are (1) an individual contribution limit, which is a cap on the amount individuals can donate to a federal campaign ($2,800 per election cycle) and (2) a public financing system where presidential candidates can receive a grant instead of accepting contributions. However, elections have become too expensive for public financing to be viable. The 2016 winning presidential campaign cost $957.6 million and the public financing option would have provided $96.1 million.
In the landmark decision Citizens United (2010), the Supreme Court decided individuals and corporations could spend as much as they want to support a candidate as long as that spending was independent of the campaign (outside spending). This case (and decisions based on the ruling) lead to the creation of Super PACs; groups which can raise and spend unlimited funds during an election. The rationale behind this decision was that outside spending has minimal value to a campaign, so unlimited outside spending does not risk corrupting the political system.
This decision was based on a Supreme Court case from the 1970s, Buckley v. Valeo, where the Supreme Court decided that outside spending is worth 6% of campaign spending. Regular PACs work with campaigns to raise and spend, so they have the same contribution limits as campaigns. Following the Citizens United decision, outside spending increased by 841% over 8 years to $2.8 billion in 2016, as seen in the chart on the right. Super PACs are a major conduit for outside spending, but they frequently coordinate with campaigns through back channels which undermines the concept of “outside” spending.
*Small dollar 2008 data based on estimates, information not available from the FEC
Reformers who want to move closer to equality suggest limiting or banning outside spending or improving the public financing system so that it is a viable option for presidential candidates, as well as expanding it to Congressional elections. In order to limit or ban outside spending, it is likely that a constitutional amendment would be required because of the Supreme Court’s position. Stricter policing of Super PACs colluding with campaigns is another potential suggestion, and would require buy-in from the FEC. Other reforms which have been implemented in other democracies include limiting the time frame of a campaign (the average US presidential campaign takes 1.5 years, French presidential campaigns take 1 month) to reduce the necessary costs, allocating tv and radio advertising time for free to all candidates who reach predetermined thresholds, and implementing a ceiling on overall campaign spending.
Although the system already leans heavily towards freedom of speech, reformers interested in pushing the system further in towards freedom of speech advocate for eliminating the individual contribution limit for campaigns and removing the public financing system.
Disclosure is the policy where sources of campaign or political advocacy (like advertisements) funding are available to the public. All funding from political committees, PACs, Super PACs, and individual contributions is supposed to be disclosed. A political committee is an organization which influences federal elections by spending, and who are either under the control of a candidate or whose major purpose is the election (or nomination) of a candidate. The FEC requires reporting on the donor and amount donated, and makes that information available to the public. However, if funding comes to the PAC or SuperPAC from 501(c)(4) organization, the donors and amounts are not disclosed. Money where the donor is not disclosed is known as dark money. The only deciding factor between a 501(c)(4) organization and a political committee is what percentage of the organization’s budget is spent on political advocacy. If it is below 50% it is a 501(c)(4) and can keep its donors undisclosed. Many donors use this loophole to obscure their involvement in elections. Because of the room for dark money, the US has limited disclosure.
Furthermore, the FEC definition of political advocacy is a major asset to 501(c)(4) organizations. Paying for the distribution of an advertisement counts as “political advocacy” but the cost of producing that advertisement does not. For example, if an individual starts a 501(c)(4) organization with a million dollars, spends 51% of that money producing a national ad campaign and 49% distributing it, that organization legally does not have to disclose its donors.
In the Citizens United decision, the Supreme Court explained that disclosure is essential because it “helps citizens make informed choices in the political marketplace.” However, the disclosure requirements did not keep up with the changes in types of organizations allowed to participate in election advocacy. 501(c)(4) organizations, the main culprits, only became a real factor in campaign finance after the Citizens United decision in 2010. Disclosure reformers suggest mandating that groups contributing above a certain amount disclose their donors, and the debate is around what that amount should be. In the status quo, 501(c)(4) organizations can only put 50% of their spending towards political advocacy. This is disclosure at the 50% level. The other side of the spectrum would be that any organization who puts any money towards political advocacy has to disclose their donors, or 100% disclosure. It would also be possible to roll back disclosure, so that individuals and corporations are able to spend more on political advocacy without having their names attached.
Enforcement: The Federal Election Commission is a 6-person board of Commissioners responsible for enforcing all federal election laws. The FEC is responsible for the enforcement of all campaign finance legislation, meaning that if the FEC doesn’t function properly, it does not matter what kind of policies are put in place. The Commissioners are responsible for initiating audits and investigations on individuals and organizations suspected of violating campaign finance policies, and they have an investigative team to conduct the audits and investigations. Current enforcement issues include:
1. Gridlock: A maximum of three Commissioners can be from the same party in order to maintain balance on the board, and four votes are needed to proceed with any board action. While this was intended to stop partisan attacks from the FEC, it causes intense gridlock. If four Commissioners don’t agree, there is no recourse or appeals process to continue pursuing a valid campaign finance infraction. In 2016, with all 6 seats filled, the board gridlocked on 30% of enforcement issues.
2. Empty Seats: The gridlock problem is amplified when the board is not fully staffed. Currently, only four seats are filled, meaning a consensus among the two republicans, one democrat, and one independent on the board is required before instigating any sort of investigation or enforcement. From August 2019 to May 2020, only three seats were filled on the board so the FEC was at a standstill. New Commissioners are first selected by the president and then confirmed by the Senate. Although the board has been short of at least one Commissioner since the early days of the Trump presidency, President Trump has only nominated one replacement, who was recently confirmed.
3. Priorities: One of the FEC’s main priorities is focusing on cases where it feels it can have the most impact. That sounds reasonable, but in practice it means that as soon as an organization feels it is genuinely in danger of being penalized by the FEC, it liquidates. The FEC sees little value in investigating or punishing the members of a defunct organization, and so the issue is dropped and the same offenders are free to restart the cycle with a clean record.
4. Statute of Limitations: The statute of limitations for most campaign finance violations is five years, and currently the FEC investigation system does not move quickly enough to prosecute many violators within that time frame. This is especially jarring because for democracy to work effectively, voters would ideally know about campaign finance violations prior to voting in an election, rather than five years after the election when likely the information has no impact on them.
Reformers suggest restructuring the FEC so that it only has five seats; two from each party and one independent. This reform was included in H.R. 1 (2019) a Democrat-lead bill which passed in the House but was never voted on in the Senate. H.R. 1 also proposed requiring a majority vote to rule against the recommendation of the investigative body rather than for it, in order to reduce the number of valid campaign finance violations which go unpunished because of empty seats or partisan bias. Additional reform suggestions include creating an appeals process for decisions which don’t reach the vote threshold, and increasing the FEC budget in order to mandate faster response times on cases and include investigating defunct organizations in the FEC priorities.
The other perspective is that the FEC was built in a way to ensure gridlock, so that it is nearly impossible for one party to unfairly persecute the financial backers of the other party. This is one valid argument against reforming the structure of the FEC, but does not respond to suggestions for an appeals process, faster response times, and investigations of collusion and smaller organizations.
Reflection Questions
Now that you have finished an overview of the main aspects and challenges of campaign finance reform, consider these questions to help you establish your perspective:
Where do I think the US system should sit on this range?
How do I feel about where the US’s current system sits on the sliding scale of freedom of speech to equality?
What aspects of equality in the campaign finance system am I willing to give up to preserve freedom of speech? What limitations on freedom of speech am I willing to trade for equality?
Should corporations be allowed to advocate in elections?
Should outside spending in elections be allowed?
Which reforms (if any) should be undertaken in the freedom of speech vs. equality section of campaign finance reform?
Where do I sit on the disclosure range?
What level of disclosure in the campaign finance system am I comfortable with? What are the costs and benefits of that level of disclosure?
Am I happy with the status quo, where organizations spending 50% of their money on political advocacy do not have to disclose their donors?
How satisfied am I with the current enforcement of campaign finance regulations?
Would you consider campaign finance reform to be in the top tier of your political priorities?
How has your opinion on the importance of campaign finance as a policy issue changed, if at all?
Campaign finance is the process of raising and spending to fund campaigns and advocacy in public elections. Funding is costly and growing. The average spend for successful 2016 campaigns per candidate was $957.6 million—President, $19.4 million—Senate, and $1.6 million—House. These amounts are beyond the capacity of most prospective candidates, forcing them to successfully navigate fundraising or abandon the race. Improving the process is challenging because all incumbents and successful legislation were funded through the current system.
Balancing Freedom of Speech vs. Equality is one of the main debates in campaign finance policy. The U.S. system leans towards free speech, and has fewer regulations than other democracies. This means individuals and corporations can speak (advertise) as loudly and often as they like. The only two aspects which tend towards equality are:
1. An individual contribution limit, which is a cap on the amount individuals can donate to a campaign ($2,800 per cycle)
2. A public financing system where presidential candidates can receive a grant instead of accepting contributions.
However, elections have become too expensive for public financing to be viable. In the landmark decision Citizens United (2010), the Supreme Court decided individuals and corporations could spend as much as they want to support a candidate as long as that spending was independent of the campaign (outside spending). This case (and decisions based on the ruling) led to the creation of Super PACs: groups which can raise and spend unlimited funds during an election. Regular PACs work with campaigns to raise and spend, so they have the same contribution limits.
This chart shows types of spending before and after Citizens United. Large dollar donors (giving more than $200 per election cycle) spend the most across the board, and outside spending increased by 841% over 8 years to $2.8 billion in 2016. Reformers suggest limiting or banning outside spending or improving the public financing system to reduce the potential for corruption.
*Small dollar 2008 data based on estimates, information not available from the FEC
Disclosure is a requirement to reveal funding sources. The US has limited disclosure. PACs, Super PACs, and campaigns must report their donors but many private organizations and corporations which donate to them are not required to disclose their donors, so in many cases it is unclear where the money is coming from. Political spending where the source is not disclosed is called dark money. Disclosure reformers suggest mandating that groups contributing above a certain amount disclose their donors, and the debate is around what that amount should be.
Enforcement: The Federal Election Commission is a six person bipartisan board responsible for enforcing federal election laws. It struggles with responsiveness and partisanship because four members are required to approve enforcement actions. The Commission has been short two members for the past two years, compounding the dysfunction. Notices of campaign finance violations may take years to reach voters, or go unpunished altogether. FEC reform proposals include creating an appeals process for issues that don’t get four votes, mandating faster response times, and restructuring the board to streamline enforcement. H.R.1 (2019) is a bill passed in the House that included many of the suggested reforms.
