Following their disappointing performances in the Iowa Caucus and New Hampshire Primary, entrepreneur Andrew Yang and Senator Michael Bennet (D-CO) announced the end of their campaigns. Yang received 2.8% of the vote, while Sen. Bennet garnered just 0.3%. Unlike some of his opponents, the maven of math was candid to his diehard Yang Gang that he is “not someone who wants to accept donations and support in a race we will not win.” This was an interesting statement because it leads to a question about campaign war chests: Where do all those contributions go after the candidates bow out of electoral contests?
A Few Dollars More
The Federal Election Commission (FEC) has outlined a series of rules pertaining to politicians’ leftover campaign funds. For neophytes in the political arena, the regulations might be a tad surprising.
The main thing that also-rans are prohibited from doing is using donations for personal expenses. If Jefferson Smith raises $2.3 million in the first quarter and spends $2 million, he cannot use the extra $300,000 to buy himself a BMW or hundreds of copies of Senator Bernie Sanders’ (I-VT) bestselling book, Our Revolution. This FEC rule was put in place in 1993 when representatives who took office before 1980 were permitted to keep leftover campaign cash when they retired – one-third would spend millions in donations on clothing, traveling, artwork, and jewelry.
Under FEC guidelines, dropouts can refund money to donors, which some would say is an honorable thing to do. They also have the option of transferring the remaining funds to other candidates (maximum $2,000), political action committees (PACs), party committees (local, state, or national), or charities.
Any residual dollars and cents can be used to wind down campaign operations, such as moving expenses, staff compensation, paying off debts, and “any other lawful purpose, unless expressly prohibited by the Federal Election Campaign Act.”
The part that may incentivize incumbents to toss their hats in the race for the White House is that leftover cash can be allocated to a different run for federal office. For example, Sen. Bennet could use the $1,857,708 cash on hand for his Senate re-election campaign in a couple of years. Or, Senator Cory Booker (D-NJ) might spend the approximately $75,000 cash on hand for his re-election pursuits.
Or, as MarketWatch noted, other aspirants seeking different federal offices may bide their time, like former Senator Evan Bayh (D-IN): “The Indiana Democrat’s unsuccessful 2016 Senate campaign made use of a $10 million war chest that he had amassed in the prior decade, before his decision not to seek re-election to his then-Senate seat in 2010.”
Mr. Money Goes to Washington
The Pew Research Center assessed data from American National Election Studies (ANES), Center for Responsive Politics, and internal surveys to look at political contributions from individual donors.
Researchers found that Americans are now more likely to donate to political parties and candidates than they were nearly 30 years ago – but not by much. The share of Americans who have donated to someone running for public office has doubled from 6% in 1992 to 12% in 2016.
But who are those making the donations? The main characteristic is political engagement; the more you participate in this blood sport, the more likely you are to give politicians your hard-earned money.
Here are some other statistics that Pew compiled:
- Democrats are twice as likely to donate as Republicans.
- Independents’ share of political contributions has been flat at 4%.
- Higher-income, more educated, and older Americans are more likely to donate.
- Most (55%) donors give $100 or less, while one-third pitch in between $100 and $250.
Still, most Americans refuse to hand over their limited resources to wealthy politicians. This suggests a blatant and ubiquitous mistrust of, as American author Ambrose Bierce observed, interchangeable but competing statesmen who are enamored of existing iniquities and wish to substitute them with other odious policies.
Didacticism or Vanity?
Why do individuals with zero shot of winning an election run in the first place? For federal officeholders, it might be to pad their resumés, generate more publicity, and raise some extra cash. For some, it may be a campaign of a didactic nature, like former Representative Ron Paul’s (R-TX) runs in 2008 and 2012 or William F. Buckley’s mayoral efforts in New York City in 1965. For others, bids for high-profile positions could be all about vanity, telling the world that they ran for president or Congress.
But why should you fund their shenanigans? Why should you give half of your life savings, as an indebted college student recently did for Senator Elizabeth Warren (D-MA), to multi-millionaires? In the end, you are better off spending your dough on cat litter even if you do not own a feline. Nobody would tell the difference anyway.
Read more from Andrew Moran.