Campaign Finance Conundrum

Across party lines, majorities of Republicans, Democrats, and Independents are concerned about the role of money in politics and favor some form of restriction:

What exactly are people reacting to, and why is it hard to address?

The Problem

Limits exist on how individuals and organizations (“entities”) can donate to political campaigns, but they are only partial. In essence, they limit the amount of money an entity can directly donate to a campaign. For example, in the 2025 and 2026 federal elections, an individual can donate up to $3,500 directly to a candidate per election.

But if an entity donates indirectly, there are no limits. “Indirectly” means through outside groups that act independently of a particular campaign but still in support of it. Super PACs are the primary example. They are committees that can raise and spend unlimited amounts of money to support or oppose candidates, as long as they do not formally coordinate with a candidate’s campaign. They typically fund advertising and other messaging intended to influence voters. 

Because SuperPACs can raise unlimited funds, they become vehicles for large-scale political influence. The 2024 election cycle featured memorable examples:

• Elon Musk personally spent hundreds of millions of dollars, primarily to support the election of Donald Trump. By acting through his America PAC, Musk was able to spend without limits. After Trump won, Musk played a prominent role in the early months of the administration, before he had a falling-out with Trump. Musk later claimed that, without him, Trump would have lost the election.

• The cryptocurrency industry mobilized more than $100 million in political spending. It supported candidates seen as favorable to the industry’s regulatory interests, and in some cases deployed money against candidates viewed as obstacles. Actions in Congress and the White House have since shifted toward the crypto industry’s agenda.

For many Americans, this is what “too much money in politics” looks like. Although particular high-profile examples may align with one party or another, the underlying system is used across the political spectrum.

Why It Persists

If broad majorities are uncomfortable with this system, why does it continue?

Three forces help explain its persistence:

• Constitutional Protection: As interpreted by Supreme Court decisions, particularly Citizens United v. FEC, there is a constitutional right to spend unlimited amounts of money to influence elections. The Court grounded this in the Constitution’s First Amendment right of free speech, conferring it not just to individuals but also corporations, unions, and nonprofit organizations. To be unlimited, the spending needs to be on “independent expenditures,” not direct campaign contributions, but the effect of supporting the campaign is the same.

• Political Incentives: Candidates and parties benefit from outside spending, even if they do not control it directly. Supporting groups can fund advertising, mobilization, and messaging that would otherwise have to come from the campaign itself. As a result, politicians may criticize the system, but many also rely on it. Even those truly against it have the incentive to use it if their competitors are doing so.

• Effectiveness: Those doing the donating believe it helps them achieve their goals. For a major donor, a $5 million investment in a Super PAC can feel like a bargain compared to the potential “return on investment” found in favorable tax code changes or the blocking of a costly regulation.

In summary, efforts to limit money in politics confront a constitutionally ingrained system that benefits those on both the giving and receiving ends.

What Can Be Done

Because giving unlimited sums in independent expenditures has the status of a constitutional right, normal lawmaking cannot override it. Below are ways things could change.

Overriding Citizens United

There are two ways to directly override Citizens United:

• Supreme Court Reversal: The Court could reverse itself on Citizens United. Given the composition of the Court, this is unlikely to happen in the foreseeable future.

• Constitutional Amendment: Congress and the states could pass a constitutional amendment allowing greater restriction of campaign spending. An initiative to do this exists—the For Our Freedom Amendment—but successful campaigns for constitutional amendments are rare and can take decades.

Although neither of these are near-term prospects, they could become relevant if the political environment undergoes a major change, similar to how the Gilded Age of the late 1800s gave way to the Progressive Era in the early 1900s. The latter featured laws and Supreme Court decisions that curbed the power of monopolies and political machines, reshaping how power functioned in America.

The Montana Plan

Given the difficulty of tackling Citizens United head-on, some advocates are trying an end-run around it. The Montana Plan involves a 2026 Montana ballot initiative that would have the state declare corporations ineligible to spend money in politics. Its sponsors explain, “By redefining corporate charters to exclude political spending powers, we don’t restrict speech—we simply don’t grant the power to spend politically. This makes Citizens United irrelevant, not violated.”

Although creative, the Montana Plan would need to qualify for the ballot (they are gathering signatures now), then be approved by voters, then withstand court challenges. Given that its avowed goal is to make Citizens United irrelevant, those challenges will likely go up to the Supreme Court if necessary, where success is unlikely. But arguably there is still benefit to its supporters in using the initiative to raise awareness of the issue and to force opponents to defend the unpopular status quo of unlimited campaign spending.

Incremental Reform

Because big changes seem unlikely anytime soon, some reformers are instead looking to incremental steps:

• Disclosure Requirements: Laws can strengthen disclosure requirements so it’s clearer who is spending where. A central concern is “dark money”: election spending routed through organizations that do not publicly disclose their donors. Reform proposals include requiring outside groups that spend on elections to disclose major donors and adding “trace-back” rules so that money routed through intermediaries such as nonprofits or shell entities is attributed to its original source. 

• Coordination Rules: Campaigns and outside groups are not supposed to coordinate, but there are known loopholes. For example, a campaign and an allied outside group may use the same media consultant or other key vendor. This can create a channel for indirectly coordinating strategies, polling, and messaging without formal coordination. Reform proposals often focus on this “common vendor” problem.

• FEC Reform: The Federal Election Commission is structurally prone to deadlock: It has six commissioners appointed in equal numbers by each party, and enforcement requires four votes. In practice, the commission frequently splits 3–3 on party lines, allowing potential violations to go uninvestigated. Reform proposals include reducing the commission to five commissioners and having a nonpartisan advisory council recommend nominees for the commission.

Although these reform concepts do not eliminate large-scale spending, they aim to make it more transparent, independent, and accountable.

Outlook

Although many Americans favor limits on money in politics, the Citizens United era of campaign finance is firmly entrenched. The normal mechanisms for fundamental change—a Supreme Court reversal or a constitutional amendment—are unlikely to happen fast, if ever. And long-shot efforts like the Montana Plan are just that. As a result, if there is to be change in the nearer term, it will likely involve incremental steps that adjust the current framework rather than overthrow it. This may not be what people have in mind when they say they want less money in politics, but it would reform how that money operates.