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Political Action Committees: Characteristics & Influence on Politics

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Lesson Transcript
Instructor: Ashley Dugger

Ashley has a JD degree and is an attorney. She has taught and written various law courses.

Political action committees, or PACs, are organizations used to raise election funds. PACs play an important role in campaign finance and heavily influence politics. This lesson explains the characteristics and history of PACs.

What Is a PAC?

How much does it cost to win a U.S. presidential election? Did you guess over one billion? Then you're right! In fact, Barack Obama and Mitt Romney spent a combined $2.3 billion in the 2012 presidential election.

Let's take a look at where all this money comes from. Political candidates use a variety of ways to raise election funds. While most political donations come from private individuals, Political Action Committees, or PACs, also play an important role. A PAC is a private political organization used to raise and spend money in order to elect or defeat particular candidates.

PACs collect and pool contributions from individuals. They then give those contributions to candidates, political parties and other PACs. They can also spend the contributions on advertising or other political efforts meant to support or oppose political candidates.

Typically, PACs are organized to represent a corporation, business, political party or political interest. For example, Microsoft and the National Rifle Association, or NRA, both sponsor PACs.

Influence of PACs

Note that PACs are just one facet of Campaign Finance. Campaign finance refers to all money raised and spent when politicians run for public office. It's all of the money produced to pay for an election effort. It includes the election funds used to support particular candidates, issues, political parties and policies. Campaign finance has played an increasingly important role in elections.

Generally speaking, the primary goal of all campaign financing is to influence the outcome of the election. PACs spend millions of dollars each year in an effort to influence government decisions.

For example, from 2013 through 2014, PACs raised $1.6 billion. That's a $400 million increase over just four years. The National Association of Realtors raised $3.8 million alone. They use PACs to support several different political issues, such as advocating for favorable property tax rates and fighting the deregulation of financial services. These are things that help realtors sell more houses so these issues are important to them.

Characteristics of PACs

Now let's take a look at some of the unique characteristics of PACs. PACs are organizations that donate or spend more than $1,000 for the purpose of influencing an election. A group that collects and donates less than $1,000 is not considered to be a PAC.

The distinction is important because PACs are subject to certain federal laws that limit their contributions. Generally, PACs are limited to donating no more than $5,000 to a single candidate, and no more than $15,000 to a political party, each election.

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