Watchdog Group Predicts ’06 Election Will Cost $2.6 Billion
This year’s intensely competitive election for control of the House of Representatives and Senate will be the most expensive midterm election ever, the Center for Responsive Politics predicts. Candidates, national political parties, and outside issue advocacy groups will spend roughly $2.6 billion by the end of 2006 to influence the 472 federal contests around the United States and pad the war chests of incumbents not running this year.
The non-partisan Center, which has been tracking the money in federal politics since the 1980s, based its 2006 prediction on spending to date and the final tally for the 2002 midterm election. In 2004, which included a presidential contest, the election cost $4.2 billion. About $2.2 billion was spent in 2002, which preceded campaign finance reforms that limited the influence of large corporate and union donors. The estimate for 2006 would represent an 18% increase over ’02.
“The torrid pace of fundraising for this election is a reflection of how competitive November 7th will be,” said Sheila Krumholz, the Center’s acting executive director and longtime research director. “Barring a scandal sinking your opponent—which has happened a number of times this year—you simply cannot win a seat in the House without $1 million or more—or millions more for the Senate. But as Election Day approaches, it’s important for candidates and citizens to remember that you can’t win without votes either.”
All candidates for House and Senate have raised nearly $1.3 billion, based on data available from the Federal Election Commission on Oct. 23. Candidates still in the running for House have raised, on average, about $760,000, while Senate candidates have raised $5.8 million (which includes money raised since the start of the six-year term in 2001). Incumbent senators have a 4:1 advantage over their current challengers, on average. House incumbents have outraised their current challengers 7:2.
Republicans are expected to retain their edge in fundraising through the election. The Center predicts that Republican interests—candidates, party committees and conservative advocacy groups—will spend $1.4 billion on this election. Democratic interests will spend $1.2 billion, the Center projects.
The money paying for the election—the home-stretch advertising, voter mobilization and other campaigning—is coming from the same industries and interests that have largely funded past elections. Topping the Center’s 2006 list of big donors are lawyers, the real estate industry, Wall Street and, as usual, contributors who list their occupation as “retired.” Business interests account for about three-quarters of all contributions, with ideological, labor and other interests making up the rest.
“The industries and interests funding the 2006 election have been big givers for years, and they’re building on their influence now. They’re making an investment they hope will pay off once the 110th Congress takes office in January,” Krumholz said.
The Center for Responsive Politics offers the following observations on other aspects of the election, which is now just 13 days away:
PACs still have incumbents’ backs
* The Center predicts that PAC receipts and spending will exceed $1 billion for the first election ever, reflecting the ever-growing influence of business, labor and ideological interests in federal politics.
* Despite the apparent competitiveness of this election, the percentage of PAC money going to incumbents is 87%—the highest it has been since 1990—based on 18-month figures. Krumholz said, “Corporate, union and ideological interests appear to be digging in to protect those already in office, although soon after Election Day, you can bet they’ll start writing checks to make friends with the incoming freshmen.”
* The growth of PAC money has accelerated since the 2002 election cycle, after which campaign finance reforms eliminated “soft” money to the national parties. Since then, PACs have been spending less, proportionally, on contributions to candidates’ campaigns and more on other political activities to influence elections. This growth area suggests that PAC spending may be replacing some of the functions of soft money.
* Leadership PACs, the committees controlled by members of Congress and other politicians to benefit other candidates, have grown tremendously—to 318 total, of which 285 are financially active this cycle. The total number of leadership PACs tied to sitting members has increased to 242, up nearly 150% since 1998.
* To protect their majority, Republicans’ leadership PAC contributions to federal candidates and parties in the current cycle have more than doubled over the same point in 2002, to $22.4 million. In contrast, Democratic contributions, which total $8.7 million, have increased by less than a third.
Perennial industries top list of contributors
* The Center’s ranking of industries giving the most money to fund the 2006 elections looks very much like the lists for elections in the recent past. This year, lawyers and law firms top the list with at least $89 million, followed by contributors listing their occupation as “retired” with at least $85 million, the real estate industry ($53 million) and the securities and investment industry ($46 million).
* Viewed more broadly, the finance, insurance and real estate sector once again dominates in political contributions, exceeding $183.4 million in the Center’s most recent analysis, which does not include the bulk of candidates’ receipts from July through September.
* The top donors this cycle, based on contributions from their PACs and employees, include the National Association of Realtors, the financial giant Goldman Sachs, the International Brotherhood of Electrical Workers union, telecom leader AT&T, the National Beer Wholesalers Association and the Association of Trial Lawyers of America. “Most Americans would be surprised to learn the degree to which their elections are being financed by their real estate agents, electricians and the beer industry,” Krumholz said.
* Lobbyists, whose industry and practices have received unwanted attention due to the Abramoff corruption scandal, have contributed at least $17.5 million to candidates and parties. Lobbyists have increased their contributions to the majority party; Republicans have received 58% of lobbyists’ donations this cycle.
Individual contributions reflect the partisan divide
* At least 603,000 Americans, or 0.20% of the population, have contributed more than $200 to a federal campaign or party in 2005-2006. They are a partisan bunch. Only about 8,000, or 1.3% of all itemized individual contributors, designate at least a third of their contributions to both parties.
* At least 71 individuals have “maxed out” this cycle, reaching the federal limit of $101,400 in contributions to candidates, PACs and parties. The list includes real estate developers, defense contractors, lobbyists, money managers, philanthropists and even a self-described poet. “What’s remarkable about the biggest campaign contributors is that these people are not household names. You may not know them, but campaign fundraisers and candidates definitely do,” Krumholz said.
527 committees focus on hottest races and the states
* The issue-advocacy groups known as 527 committees appear to be playing a much smaller role than they did in 2004, when the $600 million they raised in unlimited amounts was used to influence the presidential race in particular. For the 2006 election, 527s have reported raising about $295 million to the Internal Revenue Service, $151 million of which comes from 527s focused on federal issues and elections.
* Rather than spending money to influence federal elections, 527s have been focusing on the states: races for governor, state legislature and ballot initiatives.
* Wealthy individual donors to 527 committees have not been as generous this year. While the top donors in 2004 gave more than $20 million to such groups, the same people have given just a few million each this cycle.
Many tight races, but overall a lack of competition
* For the 2006 election, 54 congressional races around the country lack either a Democrat or a Republican, the Center has found. Democrats occupy 43 of those seats, and they can count on holding them. “While money is fueling intense competition in many races,” Krumholz said, “it also prevents competition by fending off challengers who cannot match the incumbent’s fundraising.”
* If history is to be any guide, most incumbents should expect to return to Washington next year. In the last three elections, since the 2000 contest, an average of 97% of House incumbents have won re-election, as have 87% of senators. Political analysts have been saying that 2006 could be a Democratic watershed event akin to the “Republican takeover” in 1994. But that year, 90% of House members still won re-election, as did 92% of senators.
About the Center for Responsive Politics
The Center for Responsive Politics is the nation’s premier research group tracking money in U.S. politics and its effect on elections and public policy. Founded in 1983, the non-partisan, non-profit Center aims to create a more educated voter, an involved citizenry and a more responsive government. CRP’s award-winning Web site, www.opensecrets.org, is the most comprehensive resource for campaign contributions and analysis available anywhere. Support for CRP comes from a combination of foundation grants and individual contributions. The Center accepts no contributions from businesses, labor unions or trade associations.