(TargetLiberty.org) – There are multiple ways to define hard money vs. soft money. In economic terms, hard money refers to coins and soft money to currency or paper money. However, in politics, hard money refers to donations made directly to candidates versus money donated indirectly through political action committees (PACs) and to political parties.
What Is Hard Money?
Only individual people and PACs can donate money directly to political candidates. These donations are strictly regulated and overseen by the United States Federal Election Committee (FEC).
The FEC places strict limits on the amount of money a candidate can receive from a single donor or committee. Any violations of those limits can result in serious prison time, fines, and other penalties.
What Is Soft Money?
Individuals and PACs can indirectly donate money to political candidates by giving contributions to a political party like the GOP or a PAC or Super PAC. Unlike hard money donations, corporations are free to make soft money donations.
The Supreme Court ruled in 2010 in the Citizens United Case that soft money donations were a form of protected speech or expression. Therefore the FEC couldn’t place limits on the amount donated. However, it’s important that political candidates aren’t directly linked or associated with PACs and Super PACs making these donations.
The concept of hard and soft money in politics is actually quite simple. However, over the years there has been a steady stream of politicos receiving stiff fines or going to prison for campaign donation violations, which is why it’s important to know the difference.
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