Out-of-State Money in the Congressional Elections of 1992, 1994, and 1996: Trends and Policy Issues

Out-of-State Money in the Congressional Elections of 1992, 1994, and 1996: Trends and Policy Issues

97-894 GOV
September 26, 1997
CRS Report for Congress
Received through the CRS Web
Out-of-State Money in the Congressional Elections
of 1992, 1994, and 1996: Trends and Policy Issues
Joseph E. Cantor
Specialist in American National Government
Government Division
Summary
The sources of money raised in congressional elections have been central to the
continuing debate over campaign finance reform. As concerns have been raised over
candidate reliance on money from interest groups, many have looked for ways to bolster
the role of individual citizens in funding campaigns. In particular, some have sought a
greater role for residents of candidates' home states or districts, viewing out-of-state
money as either inherently linked to special interests, or as weakening the ties between
elected officials and constituents. Our ability to accurately assess the extent of out-of-
state money in campaigns is limited by federal disclosure requirements and the inherent
problems in ascribing the origin of donations from political action committees (PACs).
In examining out-of-state money, we are thus confined to data on donations of over $200
from individuals. Available data from the last three congressional elections show that
such out-of-state contributions constituted 17% of 1996 Senate receipts, up from 14%
in 1992. House out-of-state receipts rose from 6% to 7% in the same period. This report
provides relevant data, explains what they tell us and cannot tell us, and places the
figures in the larger context of overall receipts patterns.
Sources of Money in Congressional Elections
Aggregate Trends. Candidates for Congress rely on four principal sources of
campaign funds: (1) individual citizens giving directly to candidates; (2) political action
committees; (3) political parties; and (4) the candidates themselves—through donations
or loans from personal or immediate family funds. The first three sources are subject to
limits, under the Federal Election Campaign Act (FECA); only the fourth—candidates
themselves—is subject to no limits.
1
1 Election-related spending by groups that is outside candidates’ control (e.g., soft money,
independent expenditures, etc.) is beyond the purview of this study.
Congressional Research Service ˜ The Library of Congress

CRS-2
According to Federal Election Commission (FEC) data,2 major party candidates for
House seats in the 1996 general election received 55% of their receipts from individuals,
34% from PACs, 0.9% from the parties, and 7% from themselves. Major party candidates
for Senate seats got 62% from individuals, 19% from PACs, 0.6% from parties, and 13%
from themselves.
3
Receipts data for 1992-1996 House races show steady growth—relative to othe
4
r
sources—in contributions from individuals, along with concomitant decline in
contributions from PACs. The much smaller components from parties and the candidates
themselves registered slight increases followed by slight decreases. Patterns are less
reliably discerned among the much smaller pool of Senate candidates, but data show
fairly steady levels among individuals, PACs, and parties—despite sharp drops in
1994—and erratic patterns in receipts from candidates themselves, including a sharp
increase in 1994. Among the enduring patterns in contemporary elections are the
following: (1) House candidates rely more on PACs than Senate candidates; (2) PAC
money is relatively more important to incumbents than challengers; and (3) challengers
and open-seat candidates rely more on their own funds than do incumbents.
Policy Implications. Some critics argue that these data indicate an excessive role
by interest groups and wealthy candidates. The critics tend to favor contributions from
parties and individuals, asserting that they represent the widest, most democratic base of
funding, with a less obvious connection to narrowly-focused policy agendas. Most of
their proposals would further limit, if not ban, PAC contributions, while increasing the
role of such funding sources as parties and individual donors.
Out-of-State Campaign Receipts
Concerns over the role of individual donors are often linked with concerns over
perceived weakened ties between elected officials and constituents. This has resulted,
2 FECA disclosure requirements have made it possible since the mid-1970s to know the
sources of candidates' funds, individually and in the aggregate. FEC data have increasingly
facilitated examination of overall patterns and trends.
3 Percentages do not add up to 100%, the difference being comprised of such sources as
beginning cash-on-hand and non-candidate loans.
A caveat must be stated regarding the party component. In addition to contributions, parties
may make coordinated expenditures for specific services on behalf on candidates. These are
subject to much higher limits than contributions and involve much more money. However, as
expenditures directly by the parties, they are not counted as candidate receipts. Some studies
(including some by CRS) adjust the overall and party receipts, to better reflect the true level of
party support. This report makes no such adjustment, in part because policy proposals on out-of-
state money are based on current FEC criteria of receipts. An adjustment would show House
candidates with: individuals-53%, PACs-33%, parties-4%, and candidates-4%; it would show
Senate candidates with: individuals-58%, PACs-17%, parties-9%, and candidates-11%.
4 In reviewing data for the most recent election, it is useful to consider prior trends, lest
an emerging pattern, or an aberration by a few prominent examples, distort overall receipts
patterns. For example, an aberration was seen in the case of a single 1994 candidate's personal
spending resulting in a 20% candidate funding level among all Senate candidates. Without that
case, the level would have been 10%.

CRS-3
some say, from growing reliance on funding sources outside the state or district a Member
serves. Both PAC and non-resident funding are seen as causing the problem. Proposed
solutions have often involved curbing or prohibiting PAC money, while requiring that a
minimum share of funds come from individual residents of the state or district where the
pertinent election is held.
Limitations of the Data. Although this debate has intensified interest in the
donation trends of PACs and out-of-state individuals, two major limitations impede
research. First, PACs aggregate money from many places; it is virtually impossible to say
where the money is from once it is aggregated. Many argue that it could fairly be
considered to emanate from where the PAC or its sponsor has its headquarters, but the
PAC or its sponsor may have branches or subsidiaries in several parts of the country. In
any case, no one has devised a satisfactory method of identifying point of origin.
Second, FECA requires disclosure and itemization of contributions greater than $200
from any source. But we have no systematic way of knowing the source of contributions
of $200 or less. Such small contributions constitute roughly one-third of all individual
donations to House and Senate races. One may speculate that most smaller contributions
come from in-state, as few candidates have sufficient out-of-state name recognition to
raise substantial amounts of outside money. However, the practice of bundling, whereby
some PACs act as intermediaries in collecting donations for favored candidates, may work
in the opposite direction, by facilitating the raising of small out-of-state donations.

What The Data Show. Tables 1-3 present FEC data on campaign receipts for major
party House and Senate general election candidates in 1992-1996. For each chamber,
party, and type of candidate, aggregate data are presented on total campaign receipts;
receipts from individuals (and the percentage this was of total receipts); total raised from
individuals in over-$200 amounts (and the percentage this was of all individual
donations); and the amount and percentage from in- and out-of-state individuals. Finally,
the last columns show the percentage of all campaign receipts each type of candidate
raised from out-of-state individuals (of more than $200).
Other than demonstrating that out-of-state individual money constitutes a small share
of total funding, these data show that out-of-state money is more important to Senate than
House campaigns, incumbents rather than challengers, and Democrats rather than
Republicans. Senate incumbent Democrats typically get the highest percentage from this
source (27% in 1996, a notable rise from 1994 and 1992); House Republican open seat
candidates have generally gotten the least (5% in 1996). Out-of-state money has grown
as a component among Republican candidates, especially in the Senate, since the GOP
became the congressional majority in 1995. But even there, 20% of Democrats’ receipts
in 1996 were from out-of-state, compared with 15% of Republicans’.
Although in- and out-of-state data are relevant to the current debate, the over-$200
individual contributions constituted 43% of Senate and 36% of House receipts in 1996.
What we do not know about the origin of PAC money or the other one-third of individual
donations leads us to consider these data with some caution and in the context of overall
campaign receipts.

CRS-4
TABLE 1. 1996 Out-of-State Funding in Overall Congressional Campaign Receipts*
Individual contributions in amounts over $200
Out-of-state
Total
In-state
Total
All individual
(% of all
(% of over $200
(% of over $200
contributions
individual
individual
individual
All receipts
(% of all receipts)
contributions)
contributions)
contributions)
% of all receipts
Senate
$228,239,253
$142,178,012
$98,190,815
$57,553,314
$39,768,264
(62%)
(69%)
(59%)
(41%)
17%
Democrats
$107,573,104
$68,674,719
$45,730,578
$23,146,131
$21,960,536
(64%)
(67%)
(51%)
(48%)
20%
Incumbents
$35,109,799
$26,835,409
$15,242,930
$5,866,312
$9,338,512
(76%)
(57%)
(38%)
(61%)
27%
Challengers
$33,853,062
$18,257,438
$10,652,401
$4,729,341
$5,887,004
(54%)
(58%)
(44%)
(55%)
17%
Open seats
$38,610,243
$23,581,872
$19,835,247
$12,550,478
$6,735,020
(61%)
(84%)
(63%)
(34%)
17%
Republicans
$120,666,149
$73,503,293
$52,460,237
$34,407,183
$17,807,728
(61%)
(71%)
(66%)
(34%)
15%
Incumbents
$45,978,985
$28,642,563
$18,610,511
$10,601,733
$7,988,344
(62%)
(65%)
(57%)
(43%)
17%
Challengers
$25,183,278
$19,213,402
$13,999,673
$8,438,205
$5,460,426
(76%)
(73%)
(60%)
(39%)
22%
Open seats
$49,503,886
$25,647,328
$19,850,053
$15,367,245
$4,358,958
(52%)
(77%)
(77%)
(22%)
9%
House
$446,012,706
$244,549,853
$161,858,619
$127,250,870
$32,707,641
(55%)
(66%)
(79%)
(20%)
7%
Democrats
$204,815,415
$101,925,221
$68,731,297
$51,251,999
$16,341,763
(50%)
(67%)
(75%)
(24%)
8%
Incumbents
$107,399,024
$51,246,436
$37,356,466
$26,141,855
$10,678,441
(48%)
(73%)
(70%)
(29%)
10%
Challengers
$63,572,104
$33,648,387
$19,457,552
$15,206,803
$3,725,919
(53%)
(58%)
(78%)
(19%)
6%
Open seats
$33,844,287
$17,030,398
$11,917,279
$9,903,341
$1,937,403
(50%)
(70%)
(83%)
(16%)
6%
Republicans
$241,197,291
$142,624,632
$93,127,322
$75,998,871
$16,365,878
(59%)
(65%)
(82%)
(18%)
7%
Incumbents
$171,261,787
$98,484,644
$64,475,259
$51,404,621
$12,508,495
(58%)
(65%)
(80%)
(19%)
7%
Challengers
$37,218,146
$25,407,645
$15,664,561
$13,343,048
$2,200,088
(68%)
(62%)
(85%)
(14%)
6%
Open seats
$32,717,358
$18,732,343
$12,987,502
$11,251,202
$1,657,295
(57%)
(69%)
(87%)
(13%)
5%
* Receipts from 1995-96 election cycle, from FEC database, Sept. 18, 1997; calculations by CRS (rounded to nearest whole percentage)

CRS-5
TABLE 2. 1994 Out-of-State Funding in Overall Congressional Campaign Receipts*
Individual contributions in amounts over $200
Out-of-State
Total
Total
In-State
(% of over
All individual
(% of all
(% of over $200
$200
contributions
individual
individual
individual
% of all
All receipts
(% of all receipts)
contributions)
contributions)
contributions)
receipts
Senate
$ 270,304,365
$ 156,849,169
$ 105,595,356
$ 64,766,552
$ 40,828,804
(58%)
(67%)
(61%)
(39%)
15%
Democrat
113,524,721
68,514,755
52,422,398
26,711,713
25,710,685
(60%)
(77%)
(51%)
(49%)
23%
Incumbent
79,961,555
46,998,469
35,375,013
17,782,313
17,592,700
(59%)
(75%)
(50%)
(50%)
22%
Challenger
10,333,757
5,439,267
4,489,213
2,878,973
1,610,240
(53%)
(83%)
(64%)
(36%)
16%
Open Seat
23,229,409
16,077,019
12,558,172
6,050,427
6,507,745
(69%)
(78%)
(48%)
(52%)
28%
Republican
156,779,644
88,334,414
53,172,958
38,054,839
15,118,119
(56 %)
(60%)
(72%)
(28%)
10%
Incumbent
33,388,182
21,164,824
17,055,533
12,413,234
4,642,299
(63%)
(81%)
(73%)
(27%)
14%
Challenger
91,875,734
45,574,656
21,052,483
13,823,598
7,228,885
(50%)
(46%)
(66%)
(34%)
8%
Open Seat
31,515,728
21,594,934
15,064,942
11,818,007
3,246,935
(69%)
(70%)
(78%)
(22%)
10%
House
354,982,853
183,188,939
117,638,164
92,689,071
24,949,093
(52%)
(64%)
(79%)
(21%)
7%
Democrat
188,885,134
85,088,996
57,307,110
41,200,735
16,106,375
(45%)
(67%)
(72%)
(28%)
9%
Incumbent
138,998,371
60,034,814
42,008,392
28,891,768
13,116,624
(43%)
(70%)
(69%)
(31%)
9%
Challenger
21,580,102
10,861,542
6,062,026
4,815,972
1,246,054
(50%)
(56%)
(79%)
(21%)
6%
Open Seat
28,306,661
14,192,640
9,236,692
7,492,995
1,743,697
(50%)
(65%)
(81%)
(19%)
6%
Republican
166,097,719
98,099,943
60,331,054
51,488,336
8,842,718
(59%)
(61%)
(85%)
(15%)
5%
Incumbent
81,659,469
48,304,755
28,784,237
24,756,445
4,027,792
(59%)
(60%)
(86%)
(14%)
5%
Challenger
53,853,813
33,158,880
20,741,620
17,586,725
3,154,895
(62%)
(63%)
(85%)
(15%)
6%
Open Seat
30,584,437
16,636,308
10,805,197
9,145,166
1,660,031
(54%)
(65%)
(85%)
(15%)
5%
* Receipts from 1993-94 election cycle, from FEC database, Oct. 2, 1995; calculations by CRS (rounded to nearest whole percentage)

CRS-6
TABLE 3. 1992 Out-of-State Funding in Overall Congressional Campaign Receipts*
Individual contributions in amounts over $200
Out-of-State
Total
In-State
Total
All individual
(% of all
(% of over $200
(% of over
contributions
individual
individual
$200 individual
% of all
All receipts
(% of all receipts)
contributions)
contributions)
contributions)
receipts
Senate
$ 189,056,939
$ 124,346,343
$ 76,855,594
$ 50,734,567
$ 26,121,027
(66%)
(62%)
(66%)
(34%)
14%
Democrat
97,629,942
65,464,181
39,781,831
24,596,720
15,185,111
(67%)
(61%)
(62%)
(38%)
16%
Incumbent
41,439,229
22,939,153
17,378,358
8,612,333
8,766,025
(55%)
(76%)
(50%)
(50%)
21%
Challenger
37,430,055
29,437,813
16,452,844
12,178,849
4,273,995
(79%)
(56%)
(74%)
(26%)
11%
Open Seat
18,760,658
13,087,215
5,950,629
3,805,538
2,145,091
(70%)
(45%)
(64%)
(36%)
11%
Republican
91,426,997
58,882,162
37,073,763
26,137,847
10,935,916
(64%)
(63%)
(71%)
(29%)
12%
Incumbent
52,073,046
34,534,699
24,206,691
15,880,922
8,325,769
(66%)
(70%)
(66%)
(34%)
16%
Challenger
19,440,262
13,104,844
7,814,424
6,456,138
1,358,286
(67%)
(60%)
(83%)
(17%)
7%
Open Seat
19,913,689
11,242,619
5,052,648
3,800,787
1,251,861
(56%)
(45%)
(75%)
(25%)
6%
House
319,117,378
153,191,034
82,043,424
63,427,484
18,615,940
(48%)
(54%)
(77%)
(23%)
6%

Democrat
179,023,299
78,807,702
43,007,629
30,219,848
12,787,781
(44%)
(55%)
(70%)
(30%)
7%
Incumbent
119,588,501
48,994,143
28,399,293
18,531,515
9,867,778
(41%)
(58%)
(65%)
(35%)
8%
Challenger
22,957,197
12,106,005
5,386,794
4,365,178
1,021,616
(53%)
(44%)
(81%)
(19%)
4%
Open Seat
36,477,601
17,707,554
9,221,542
7,323,155
1,898,387
(49%)
(52%)
(79%)
(21%)
5%
Republican
140,094,079
74,383,332
39,035,795
33,207,636
5,828,159
(53%)
(52%)
(85%)
(15%)
4%
Incumbent
73,290,863
38,658,641
19,717,373
16,451,109
3,266,264
(53%)
(51%)
(83%)
(17%)
4%
Challenger
41,095,345
21,082,218
10,610,347
9,080,131
1,530,216
(51%)
(50%)
(86%)
(14%)
4%
Open Seat
25,707,871
14,642,473
8,708,075
7,676,396
1,031,679
(57%)
(59%)
(88%)
(12%)
4%
* Receipts from 1991-92 election cycle, from FEC database, Oct. 2, 1995; calculations by CRS (rounded to nearest whole percentage).