What Is Soft Money?

Soft money referred to money donated to political parties for a general purpose, as opposed to promoting a specific candidate. Political parties could spend soft money on whatever they wanted as long as it fits a generic objective to "increase the vote." Soft money was often called "nonfederal" contributions.

However, the Bipartisan Campaign Finance Reform Act banned soft money in political contributions following the 2002 election cycle. Before that, these contributions were allowed in unlimited and unregulated amounts, and they were not publicly disclosed until the 1992 elections.

In finance, this term can also refer to paper currency ♌or fiat money, which is considered soft money as opposed to gold, silver, or some other coined metal, which is considered hard 💙money since it has a tangible form beyond paper.

Understanding Soft Money

Soft money became more prominent after the Federal Election Campaign Act (1974) restricted the amount of 澳洲幸运5官方开奖结果体彩网:hard money individuals and political action committees could donate. ꦏ;

Donations to individual candidates are often referred to as "hard money," which faces firm restrictions and is highly regulated. For instance, there are strict limits on how much hard money can be donated, where it can be spent, and on what.

Soft money has no such restrictions and, as a result, has become a prominent form of ♑political donations. Crucially, soft money is given to a political party and not a particular candidate, as the Federal Election Campaign Act mentions that soft money cannot be us🙈ed by a party to promote an individual.

Though soft money can't be used to support federal candidates, it can be utilized for party-building activities, and the line between party-building and supporting federal candidates can be very thin.

History of Soft Money

Since the Federal Election Campaign Act, the amount of soft money that campaign parties have received and used has skyrocketed. During the 1992 election, political parties used about $100 million in soft money. By the 2000 election, this amount surpassed $400 million.

In the Bipartisan Campaign Reform Act (BCRA) of 2002, so💖ft money was officially banned. However, since the passage of the BCRA, there have been numerous Supreme Courtꦛ decisions gutting key provisions the bill.

Notably, the Supreme Court decision in the 2014 case of McCutcheon v. Federal Election Commission effectively created new paths for high amounts of soft money spending. Donors can now make significant contributions to entities known as "joint fundraising committees." These umbrella entities can t𓆏hen split contributions into smaller fractions and distribute them to groups—typically state political partieꦿs—which may then funnel the money to their national affiliates. Taken together, this process allows donors to circumvent limits on how much an individual can contribute to a national political party.

According to a report by Politico, this has resulted in political parties "more aggressively and successfully courting a small number of deep-pocketed donors, giving the wealthy another way to exert their ever-growing 澳洲幸运5官方开奖结果体彩网:influence over politics" and national parties becoming "once again flush with burgeoning amounts of cash whose origins can be difficult to divine."

The Bottom Line

Soft money refers to political contributions made to political parties outside the limits of federal election law. It's a largely unregulated donation mechanism. Technically, soft money is supposed to support general party-building activities rather than any one particular candidate. However, the line between party building and supporting a specific race isn't always clear. While there have efforts to curtail soft money spending, it remains a prevalent practice in politics.