The 2020 presidential campaign might well be remembered as when the dam broke on money in U.S. politics. With three billionaires in the running, campaigns, political parties and outside groups are all likely to break previous spending records, helped by canny consultants who know how to take advantage of court rulings and new technologies.

1. Aren’t there limits on political money in the U.S.?

Yes, but, crucially, they don’t apply to rich candidates who bankroll their own campaigns. And two billionaires, former New York City Mayor Michael Bloomberg and former hedge fund manager Tom Steyer, are spending record amounts in their bids to become the Democratic Party’s nominee to challenge President Donald Trump, a billionaire himself. (Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.) Clear limits do apply to how much individual Americans can donate to campaigns, political parties and the political action committees that support or oppose candidates on behalf of business, labor or ideological interests. Candidates can raise no more than $2,800 per election from each donor.

2. Have rich candidates always been free to spend as much as they want?

No. Under the post-Watergate reforms that formed the basis of federal campaign-finance architecture, presidential candidates were initially allowed to contribute no more than $50,000 ($259,000 in today’s dollars) to their own campaigns. But in 1976, in a case called Buckley v. Valeo, the Supreme Court ruled that office-seekers could spend unlimited amounts of their own money on their campaigns, under the reasoning that candidates could be corrupted by other people’s money but not their own. The Buckley decision led to a series of wealthy candidates, including Ross Perot (in 1992 and 1996) and Steve Forbes (in 1996 and 2000), using their own deep pockets to fund their presidential campaigns. The spending by Forbes in particular helped doom a public funding system meant to level the playing field in presidential primaries. Trump put $66 million of his money into his successful 2016 race.

3. How much are Bloomberg and Steyer spending?

More than $388 million combined as of Dec. 31. For comparison, Vermont Senator Bernie Sanders, who has raised the most from outside donations, had taken in $96 million. Bloomberg has said he will keep spending money through the November election to defeat Trump, regardless of whether he is the nominee. He didn’t rule out going as high as $1 billion. Steyer’s campaign has said that he has no ceiling on what he’s willing to spend.

4. Can non-billionaires compete?

Sure, in part because the U.S. system allows wealthy Americans to bankroll them indirectly. The key to that the Supreme Court decision in Citizens United v. Federal Election Commission (2010). That ruling permits outside groups to spend unlimited sums to influence elections provided they don’t coordinate their efforts with candidates. The decision led to the creation of special political action committees -- super-PACs -- that can raise money in unlimited amounts from U.S. corporations, labor unions, individuals and some types of nonprofit groups to support candidates. In the ongoing Democratic nomination contest, former Vice President Joe Biden has the support of a super-PAC. Our Revolution, a nonprofit group founded by Sanders supporters that has paid for digital ads backing his campaign, is officially a social welfare organization rather than a super-PAC but has a similar function. Spending by groups like Our Revolution is called “dark money” because they don’t have to disclose the names of donors.

5. Is there any role left for small donors?

Actually, there is. Sanders and Massachusetts Senator Elizabeth Warren have gotten huge support from donors giving $200 or less. Technology has fueled a small-dollar donor revolution: ActBlue, which processed $1 billion in donations to Democratic candidates and causes in 2019, lets donors give small amounts by swiping on a mobile phone.

6. How is money shaping the race among Democrats?

As of Feb. 13, Bloomberg tallied 14.2% in the RealClearPolitics average of national polls, behind Sanders’s 23.6% and Biden’s 19.2%. Steyer came in at 1.8%.

7. How much could the 2020 campaign end up costing?

There are no estimates yet, just signs that it will easily exceed the record $2.4 billion spent on the 2012 contest. Campaigns had reported raising almost $1.2 billion as of Jan. 31, according to the Center for Responsive Politics.

8. Can Trump keep up?

All signs point to yes. Aided by the Republican Party and a pair of joint fundraising committees, Trump raised $463.5 million in 2019 and ended the year with $196 million in the bank, well ahead of any Democrat and the Democratic National Committee.

9. Will there be limits in the general election?

Most likely not. Public financing, a legacy of reforms adopted in the wake of Watergate scandals, is still available to presidential campaigns, but candidates must agree to spending limits in exchange for the money. No major party candidate has used it since Republican John McCain took $84 million in public funds for his 2008 campaign. That year, Democrat Barack Obama rejected public funding and instead raised $436 million, giving him a huge financial advantage over McCain, whom he defeated.

10. Isn’t this getting a little crazy?

Some politicians, including some of the Democratic presidential candidates, have made sweeping promises about campaign-finance reform, including finding ways to roll back the Citizens United decision and reinvigorate public financing. Many have sworn off taking money from lobbyists and corporate PACs, as have many Democratic members of Congress. But the main drivers of the last congressional push for campaign finance reform are gone: McCain died in 2018, and his Democratic ally in the push, Russ Feingold, left the Senate in 2011. Even modest reform proposals, such as requiring that Facebook and Google report political spending on their sites, have languished. In 2019, the Democratic-controlled House passed a wide-ranging package of reforms that included greater regulation for super-PACs and “dark money” nonprofits that don’t disclose donors, but it has stalled in the Republican-controlled Senate. Any limits that do manage to get through Congress might not withstand scrutiny by the Supreme Court.

To contact the reporter on this story: Bill Allison in Washington DC at ballison14@bloomberg.net

To contact the editors responsible for this story: Wendy Benjaminson at wbenjaminson@bloomberg.net, Laurence Arnold, Magan Crane

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