The 2012 presidential and congressional elections will be the most expensive on record, the nonpartisan Center for Responsive Politics estimates — though not by much. The Center predicts, based on data from 18 months of fundraising and spending, that the elections will cost $5.8 billion, an increase of 7 percent from the 2008 cost of $5.4 billion. But outside spending, which is soaring while presidential candidate spending declines, is a wild card that makes predictions tricky.

So far overall in the first 18 months of the 2012 cycle, $2.2 billion has been spent, compared with $2.4 billion in 2008.

The presidential race by itself will cost about $2.5 billion, the Center predicts, in funds laid out by the candidates, Democratic and Republican party committees and outside spending groups. The candidates have raised about $608 million, compared with more than $1.1 billion at this point in the 2008 cycle.

The big factor in 2012 is outside money. These elections — presidential and congressional — are the first in which new, post-Citizens United rules will have been operative for the entire two-year campaign cycle. While outside spending groups existed in previous presidential election cycles — Americans Coming Together, for example, on the liberal side, and Swift Boat Veterans for Truth for conservatives — that U.S. Supreme Court decision and other legal developments led to the proliferation of super PACs and the growth of other outside spending groups that don’t have to disclose their donors.

As a result, spending by outside groups will make up a far larger proportion of the total spent in the 2012 election than in previous cycles and will add up to, at a minimum, $750 million, the Center forecasts.

“Although a lot of money still remains to be raised and spent, the data already show that we’re on track to break the extraordinary, record-setting sums spent in 2008,” said Sheila Krumholz, executive director of the Center for Responsive Politics. “That cycle was the first in which we crossed the $5 billion mark, and the big question now is whether we will already reach — or surpass — $6 billion just one cycle later. At a minimum, we’ll come close. More important than the total spent, the real difference this cycle is how great a portion of that money will come from purportedly independent, often secretive groups.”

The Center, which operates the award-winning website OpenSecrets.org and has been tracking the financing of federal elections since the 1980s, based its prediction of the 2012 election’s overall cost on reports filed with the Federal Election Commission and the Internal Revenue Service as of the end of June by all candidates for federal office, political party committees and outside spending groups, including super PACs and 501(c) organizations. In addition, the Center has factored in an estimate of how much has been spent by 501(c) groups on ads that aren’t required to be reported anywhere.

Business interests accounted for about 77 percent of all contributions, with ideological, labor and other interests accounting for the remainder.

Broken down by sector, the finance, insurance and real estate sector once again dominates the world of political contributions with a total of $348.5 million thus far, including contributions from individuals and PACs to candidates, parties and outside groups as well as corporate contributions to outside groups. Within that sector, the securities and investment industry, or Wall Street, has given $144.2 million. In both cases, 63 percent of the funds to candidates and party committees went to Republicans.

In the presidential race alone, Wall Street’s loyalties are clear: Those employed in securities and investment have given $10.5 million to Mitt Romney and $3.8 million to President Barack Obama.

Among industries and interest groups that donated to candidates, party committees and outside groups, retirees once again have contributed the most, giving $178.9 million in the first 18 months of the year. Securities and investment came in second, giving $144.2 million, and lawyers and law firms pulled up in third place with $114.2 million.

All candidates for the U.S. House and Senate raised about $1.2 billion in the first year-and-a-half of the election cycle, compared with just a shade under that at the same time in 2010 and nearly $945 million in 2008. The average Senate incumbent has an advantage of about 11:1 over the average challenger. House incumbents hold a 7:1 advantage over their challengers, on average.

Republican congressional candidates have raised 55 percent of the funds raised by candidates at this point in the race, according to the Center’s research. In 2010, that number barely crested 50 percent, whereas in 2008 it amounted to a little more than 45 percent.

“With control of both houses of Congress in doubt, national attention and lots of money from both candidates and outside groups will be focused on the few dozen races that could make the difference,” said Bob Biersack, senior fellow at the Center. “We might also see big outside spending totals in some unexpected places where groups look to surprise seemingly safe members.”

Super PACs and other outside spending groups are going full-bore in the 2012 cycle. As of July 30, 125 super PACs had reported spending money on the election, and they had passed the $165 million mark. Super PACs, which began appearing in the wake of court decisions in 2010, are allowed to accept donations of unlimited size from almost any source — individual, corporate or union — and must spend their money independently of candidates.

Every major Republican candidate for president, as well as President Barack Obama, has had a super PAC backing him or her. The largest of all super PACs, the pro-Mitt Romney Restore Our Future, had spent $54.8 million as of July 30.

The degree to which these super PACs are powered by a relative few organizations and very wealthy donors is evident from the fact that the top 100 donors had given the groups $192.8 million out of the total $318 million they had raised by the end of June, or 60.5 percent.

Super PACs by and large disclose their donors, but there’s another category of outside spending groups that does not. Those organizations, known as 501(c)s under the Internal Revenue Code, have become increasingly politically active.



They most frequently run “issue ads” that don’t specifically ask viewers to vote for or against a candidate, though their message is usually plain. However, they’re only required to report this spending to the FEC when their issue ads run 60 days before a general election or 30 days before a primary – meaning that much of their spending isn’t on record with the federal agency.

In the post-Citizens United era these groups are also allowed to spend unlimited sums on direct campaign messages, still with no disclosure of donors, making it easier for a few individuals or organizations with huge collections of capital to spend aggressively as the election draws near.

“Congressional candidates, particularly incumbents, are raising more than they did at this point in the last two cycles. However, super PACs or other outside spending groups are also raising big money and may now wield considerable power over candidates by threatening attacks without ever spending a dime,” said Krumholz. “An arms race driven by the outside money keeps incumbents and challengers alike desperately seeking funds and even more grateful to the donors that come to their aid.”

Senior researcher Doug Weber contributed to this report. H.J. Rivera prepared the graphic.

Methodology: Our calculations for the total cost of the 2012 election include candidate spending, party spending, 527 spending, outside money (including independent expenditures and electioneering communications), and the money spent on conventions and host committee fundraising. Calculations for candidate spending were taken from summary numbers reported by the candidates to the Federal Election Commission.Calculations for party spending were taken from summary numbers reported by the party committees to the Federal Election Commission. Spending by 527s was calculated from reports by those groups to the IRS, and corrected for any overlap with spending by outside groups. Outside spending includes money spent by super PACs as reported to the FEC. We used the numbers provided by the FEC for grants underwriting the party conventions in 2012, and assumed fundraising by the host committees would approximate what was raised in 2008, adjusted for inflation. These numbers were added to generate a lump total for 2011 and 2012 thus far. To estimate the total cost of the election for the entire 2012 cycle, we created a series of multipliers based on the proportion of money spent in each category through the first 18 months of the 2008 election cycle compared with the proportion spent in that entire cycle, and multiplied the 18-month totals for the 2012 cycle by these multipliers. We assumed that the “trajectory” for spending in the 2012 cycle will mirror that from the 2008 cycle.



For permission to reprint for commercial uses, such as textbooks, contact the Center: Feel free to distribute or cite this material, but please credit the Center for Responsive Politics.For permission to reprint for commercial uses, such as textbooks, contact the Center: [email protected]

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