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What Does Campaign Finance Reform Do in the United States?

Efforts to change the rules on how political campaigns can be paid for, with the aim of making them fairer

What Does Campaign Finance Reform Do in the United States?

Americans are aware that money has an excessive amount of power in our political system. States and cities all over the country are demonstrating that we can reform and improve our campaign finance system with laws that amplify the voices of regular Americans, demand thorough disclosure, and ensure that everyone follows the same rules.

Campaign Finance Reform supports policies that enable small donors to significantly impact campaigns, require the disclosure of all campaign funds raised and spent, remove the financial obstacles that prevent regular people from running for office, and hold wealthy special interests and elected officials accountable to the public.

What is Campaign Finance Reform?

Campaign finance reform is a movement to limit the amount of money that people and interest organizations may donate to political campaigns. Political candidates’ growing reliance on pricey television commercials has spurred this movement in recent decades. Political action groups have passed even if individual contributions are restricted. 

Although neither party really supports campaign finance reform, both parties give it lip service. Some liberals believe it to be the most effective means of guaranteeing politicians’ independence from wealthy interests; some conservatives see it as a danger to free speech.


The main federal legislation governing political campaign spending and fundraising in the United States is the Federal Election Campaign Act of 1971. The bill’s original goals were to impose transparency standards for federal political campaigns, limit campaign expenditure on communication channels, and strengthen the penalties for breaking election law. 

On February 7, 1972, President Richard Nixon signed the Act into law. The statute was modified in 1974 to establish the Federal Election Commission (FEC) and set financial restrictions on political donations and expenditures. 

The Act was revised once more in 1976 to address the elements deemed unconstitutional in Buckley v. Valeo, including the FEC’s organizational structure and the spending caps on political campaigns, and once more in 1979 to permit parties to spend an unlimited amount of hard cash on initiatives like boosting voter turnout and registration. 

The Federal Election Commission (FEC) declared in 1979 that political parties might engage in non-federal administrative and party-building operations using unrestricted or “soft” money. Later, this money was used for issue-related commercials about candidates, significantly increasing soft money donations and expenditures in elections. 

As a result, the Bipartisan Campaign Reform Act (BCRA) was passed. A requirement of FECA is that political organizations and campaigns record the names, addresses, and occupations of contributors who give more than $200. 

This restriction on contribution amount also applies to contributions to candidates and political parties. With regard to federal elections, the FECA has an unambiguous preemption clause that expressly preempts state and federal law.


The FECA, which governs the funding of campaigns, was revised by the BCRA, sometimes called the McCain-Feingold Act. The new legislative restrictions went into force in January 2003, and the statute went into effect on November 6, 2002. 

The Act was intended to solve two concerns, as stated in a decision on BCRA by the United States Supreme Court:

  1. By forbidding national political party groups from raising and spending any money not subject to restrictions, even for local and state contests or issue discussions, soft money has an enlarged role in campaign finance.
  1. The overabundance of advocacy ads by classifying as “electioneering communications” broadcast advertisements that mention federal candidates within 30 days of primary elections or 60 days of general elections, and by outlawing any such advertisement funded by a corporation, non-profit organizations, or by unincorporated entities using union or corporate general treasury monies.

The Citizens United v. FEC ruling invalidates this clause, but the restriction on the participation of foreign nationals or foreign businesses in political spending choices remains in place. 

Despite the name “McCain-Feingold,” the Senate version of the measure did not pass into law. The version that was passed into law is instead the companion legislation.

Amplify American’s Voices

States and cities all over the country are demonstrating that we can reform and improve our campaign finance system, despite the U.S. Supreme Court’s decision in Citizens United v. FEC.

The effort to limit the influence of large money in politics has been at the forefront for almost 50 years. Making sure there is accountability in our politics and everyone has a voice and a say in government has always been the focus of efforts to change the system.

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