Donations for the 2024 US elections / How much impact does the economy have?

2024-08-19 09:12:00, Kosova & Bota CNA

Donations for the 2024 US elections / How much impact does the economy have?

Donald Trump and Kamala Harris. Source, Financial Times

In no other country in the world is as much money poured into the presidential election campaign as in the USA. In 2020, when Joe Biden was elected, he and defeated Donald Trump spent a combined $5.7 billion on the campaign. That was a record, twice as high as in previous elections, says Open Secrets, which documents campaign donations.

Even in this election, the money collection machine is working like clockwork. In July alone, Kamala Harris said she received $310 million in donations. In the same period, Donald Trump claimed to have received $138 million in donations, Reuters reports.

Big donors often have wishes

The campaign is not only financed by small donors - the two opponents constantly receive millions from the super-rich, who are often behind commercial companies. Billionaire George Soros and his son Alex support Democratic candidate Kamala Harris. The Soros family is known as a big donor, spending tens of millions of dollars on the election campaign.

View from an election rally. Photo: Jim Vondruska/Getty Images

Reid Hoffman, a prominent entrepreneur, co-founder of the Linkedin platform and Microsoft board member, donated $7 million to the Democrats. In an interview with CNN, he said that the head of the American Competition Authority (FTC), Lina Khan, is not good for the USA. He added: "I hope Vice President Harris replaces him."

Donald Trump also receives help from important economic leaders. Billionaire Timothy Mellon spent $50 million in May to support Trump, reports the American magazine Time. Even tech investor David Sacks and Tesla CEO Elon Musk support Trump. In a conversation between Elon Musk and Donald Trump at Platform X on August 13, 2024, Musk reiterated his support for the Republican and even offered to work in a possible Trump administration. "I think it would be great to have a commission on government efficiency that looks at these things and makes sure that taxpayer money is being spent wisely," Musk said. "I would be happy to serve in such a commission".

Millions in donations can flow through indirect channels

Limiting donations in election campaigns has been discussed for decades. In 2010, the US Supreme Court issued a decision that is still valid today. This has been a turning point, says Jürg Hebenstreit, a University of Jena researcher on US domestic politics and campaign finance. The court determined that any restriction of political campaign finance is censorship and therefore illegal. "This means that since 2010 you can collect donations as much as you want, as a company, as a bank, as a trade union, as an interest group or as a wealthy individual," Hebenstreit told DW.

Donald Trump, photo: Gene J. Puskar/AP Photo/picture alliance

There are, however, restrictions on direct donations to candidates. An individual can currently donate a maximum of $6,600. But there is a possibility that the money will be sent to the preferred candidate through Political Action Committees, the so-called PACs.

PACs are organizations for supporting the candidacy of a certain person. They are usually established by companies, unions or interest groups, which collect contributions from their members or employees. But even here there are limitations. Members or employees may donate up to $5,000 per year to PACs. No money is allowed to flow from the PAC operator, i.e. from the company, the union or the interest group itself. In addition, individuals are allowed to donate $41,300 per year to national party organizations.

Millions in donations through Super PACs

Unlimited donations can be collected through Super Political Action Committees. Super PACs are independent lobbying groups that were increasingly created after 2010. They can raise unlimited amounts of money - from individuals, companies and any other donors. However, they are not allowed to pass the money to the candidates, but to make publicity in the interest of the candidates. The only requirement is that their publicity not be "coordinated" with the campaign office of the candidate they support.

"What they spend, it's amazing. We didn't know anything like this before," says the American James Davis, professor of political science at the University of St. Gallen. Candidates know exactly which Super PACs are on their side and who is behind those donations, Davis says. This year there are 2,257 SuperPACs, which have raised over $2 billion and spent nearly $700 million.

Donald Trump and JDVance. Photograph: Shannon Stapleton/REUTERS

Does the size of the campaign budget determine who becomes president?

But what effect do the millions of dollars pouring into the election campaign have? "Both candidates are generally known. And if they invest 100 million more in the election campaign, this end has no impact on the actual outcome of the election," says Hebenstreit.

"Of course you need a minimum of donations to build a party organization for the election campaign," Davis told DW. "And it's very important to motivate people to go to the polls on election day. That costs."

"In the end, it is important to have a message that secures votes", says the political expert. Even small donors are very important for parties, because behind every small donation there is a vote. "A billionaire can donate several million dollars, but still only cast one vote at the ballot box," says Davis. A look at the past shows that money alone is not enough. Hillary Clinton raised significantly more money than Donald Trump in the election campaign of 2016, however, she lost.

Donations continue to have an impact even after the elections

With their millions, the super rich, billionaires and bosses of the economy want to ensure influence on politics even after the elections. "If someone donates millions to a Super PAC, it's certainly going to get noticed, and it's not going to be a coincidence that at some point that person gets an invitation to an event where the president-elect is in attendance," Davis says.

The opinion of the population

It is no wonder that the population is against these excesses with donations. According to a Pew Research Center poll, more than 7 in 10 American adults want to limit donations to political campaigns. Eight in 10 respondents believe that people who donate money to political campaigns have too much influence on the decisions of members of Congress.

However, Hebenstreit sees little chance of stemming such cash flows. According to the political scientist, the Congress would lack the political majority to change the laws.

Harris Walz and Kamala Harris. Photo: Joe Lamberti/AP/dpa/picture alliance

In other countries, elections work with less money

That the election campaign in the USA is more expensive than anywhere else, this is also due to the fact that most countries rely on public financing of campaigns, explains Hebenstreit. Then, in every presidential election, the entire party apparatus in a country as big as the USA must be resurrected again.

In the US, parties are relatively weak, Davis explains. "You can almost say that at the federal level the party meets once every four years, which means that every four years you have to get this organization up and running in 50 states and the corresponding electoral districts. This is very expensive". the campaign in the US is largely carried out through the media, which is almost entirely in private hands. This also swallows large amounts of money. So it can be expected that this campaign will also set a new record in terms of budget./ DW