97-1040: Campaign Financing: Highlights and Chronology of Current Federal
Law
Updated March 8, 2000
Joseph E. Cantor
Specialist in American National
Government
Government and Finance Division
Summary
Current law governing financial activity of campaigns for federal office is based on two
principal statutes: the Federal Election Campaign Act (FECA) of 1971, as amended in 1974,
1976, and 1979, and the Revenue Act of 1971. These laws were enacted to remedy widely
perceived shortcomings of existing law, the Corrupt Practices Act of 1925, and in response to
reports of campaign finance abuses over the years, culminating in the 1972-1974 Watergate
scandal. This report provides a summary of major provisions of federal law and a chronology of
key legislative and judicial actions.(1)
The FECA features prohibitions on union and corporate contributions and limits on individual,
interest group, and political party contributions to candidates and committees involved in federal
elections. These candidates and committees are required to disclose contributions and
expenditures on a regular basis for public examination.
Within this framework, a dual system of finance has evolved: a presidential system, funded in
large measure from public monies, with concomitant, voluntary limits on campaign expenditures;
and a congressional system, funded solely by private donations and free of circumscriptions on
campaign spending.
The Federal Election Commission (FEC) is an independent agency that has served since 1975 to
collect and make available to the public the financial reports filed by candidates and committees,
supervise the presidential public funding system, and enforce federal law through civil authority.
The FEC promulgates regulations to implement the law and writes advisory opinions to interpret
the law in specific instances.
Highlights of Current Law(2)
Contribution Prohibitions and Limits(3)
Individuals. $1,000 per candidate per election; $20,000 to a national party committee;
$5,000 to other political committees; $25,000 aggregate on all contributions.
Political Action Committees (PACs). If multicandidate(4): Table 3. District of
Columbia General: District of Columbia Funds $5,000 per candidate per election; $15,000 to a
national party committee; $5,000 to any other political committee.
Other Political Committees. Non-multicandidate: $1,000 per candidate per
election;
$20,000 to a national party committee; $5,000 to any other political committee.
Party Committees. $1,000 or $5,000 per candidate per election (depending upon
multicandidate status); $5,000 to any other political committee. For national senatorial or
national party committee, or both: $17,500 to Senate candidate, per year of election.
Candidates. No limits on candidate contributions to own campaign, except if
taking
public funding (presidential elections) $50,000 in personal or immediate family funds.
Prohibited contributions. Foreign nationals (non-green-card holders); national banks;
corporations; labor unions; more than $100 in cash or $50 given anonymously.
Expenditure Limits
Candidates. No spending limits, except on a voluntary basis for publicly funded
presidential candidates: in primaries nationwide limit of $10 million plus cost of living
allowance (COLA), based on 1974, plus 20% for exempt fundraising costs, and state limits of the
greater of $200,000 plus COLA or 16¢ per eligible voter plus COLA; and in general elections
$20 million plus COLA. (National limits in 2000 are: $33.8 million plus $6.8 million for
fundraising in primaries and $67.6 million in the general election.)
PACs. No limits on independent expenditures for communicating messages to support or
oppose candidates, made without coordination or consultation with a candidate.
Parties. In addition to contributions, national and state party committees may make
expenditures on behalf of their general election nominees, subject to limits, as follows:
- House candidate in a multi-district state $10,000 plus COLA;
- Senate candidate or at-large House candidate the greater of $20,000 plus COLA or
2¢
per eligible voter plus COLA;
- Presidential candidate 2¢ per eligible voter plus COLA;
In House and Senate races, state parties may designate the national committee as its expenditure
agent, in effect doubling these limits. (In 2000, the parties can spend $33,780 in most House
races, from $67,560 to $1.6 million in Senate races, and twice those amounts for
combined--federal and state party--giving, and $13.7 million in the presidential race.)
Parties taking public funds to finance presidential nominating conventions may spend $4 million
plus COLA. (In 2000, this amounts to $13.5 million.)
Public Funding
Available on optional basis to presidential candidates and to political parties for presidential
nominating conventions, in conjunction with spending limits (see above).
- Primary candidates qualify by raising at least $5,000 in each of 20 states in individual
contributions of $250 or less; individual contributions of $250 or less are matched equally
with federal money, up to 50% of the primary spending limit.
- General election nominees major party: eligible for public funds equal to their
spending
limit; minor party: eligible for an amount proportionate to the vote received vis-a-vis
major party candidates in prior elections; new party eligible for retroactive funding if they
receive at least 5% of the popular vote.
- Nominating conventions major parties eligible for public funds, equal to their spending
limit; minor parties may receive a lesser, proportionate amount.
Disclosure
All federal candidates and political committees operating in federal elections must file regularly
scheduled reports; presidential and House candidates and most political committees file with the
FEC; Senate candidates must file with the Secretary of the Senate. All reports are available at the
FEC. Reports include aggregate levels of cash on hand, receipts, expenditures, transfers, loans,
rebates, refund dividends, and interest (and, for presidential candidates, public funds); itemized
identification must be provided on contributions received and expenditures made of more than
$200 per year (identifying name, address, occupation, and principal place of business of donor or
recipient).
Federal Election Commission
The FEC is an independent regulatory agency with six voting members appointed by the President
and confirmed by the Senate. Functions include: administration of disclosure provisions of the
law and presidential public funding program; civil authority to enforce the law's provisions;
referral of possible criminal violations to the Justice Department; conducting hearings and
investigations; writing regulations implementing the law; and issuing advisory opinions on request
to help interpret the law.
Chronology
This section lists principal statutes and court rulings governing federal campaign finance practices,
with a summary of major provisions and notation of any later repeal.
Revenue Act of 1971 [P.L. 92-178].
- Presidential Election Campaign Fund set up to provide optional subsidies to presidential
general election candidates, as of 1976; major party candidates were eligible for 15¢ per
eligible voter; minor or new party candidates were eligible for an amount proportionate to
the vote in the previous (or retroactively in the just concluded) election; candidates were to
abide by expenditure limit, equal to major party candidate subsidy; program was to be
funded through an optional $1 checkoff on federal tax returns ($2 on joint returns),
beginning with 1972.
- Tax incentives created tax credit of up to $12.50 ($25 on joint returns) on half the value
of annual political contributions and an alternative tax deduction of up to $50 ($100 on
joint returns) on the full value of contributions [tax deductions and credits later repealed, as
of 1979 and 1987, respectively].
Federal Election Campaign Act (FECA) of 1971 [P.L. 92-225].
Responded to failures of disclosure under earlier laws and to demand for curbing rising campaign
costs.
- Disclosure required candidates and political committees to file reports on a quarterly
basis (plus two pre-election reports) with the secretary of (the respective) state and with
the Clerk of the House (in connection with House campaigns), Secretary of the Senate
(Senate campaigns), and Comptroller General/GAO (presidential campaigns); reports were
to include itemized information on receipts and expenditures of $100 or more;
contributions of $5,000 or more were to be reported within 48 hours; disclosure to cover
all phases of election;
- Media advertising spending limits imposed on federal candidates, equal to the greater of
$50,000 or 10¢ per eligible voter in jurisdiction [repealed by 1974 Act];
- Lowest unit rate required broadcasters to sell time to candidates at lowest rate for
commercial advertisers, within 45 days of primary and 60 days of general election;
- Candidate limits on personal/family donations: $50,000 (President, Vice President),
$35,000 (Senate), $25,000 (House) [invalidated by Buckley decision].
FECA Amendments of 1974 [P.L. 93-443]. Enacted in response to the
Watergate scandal of 1972-1974.
- Contribution limits $1,000 per candidate per election and $25,000 aggregate on all
contributions to federal candidates and committees for individuals; $5,000 per candidate
per election for PACs and party committees (with no aggregate limit);
- Cash contributions prohibited in excess of $100;
- Expenditure limits $10 million for presidential primary candidates and $20 million for
presidential general election candidates; $2 million for major party conventions; the greater
of $100,000 or 8¢ per eligible voter for Senate primary candidates, and the greater of
$150,000 or 12¢ per eligible voter for Senate general election candidates; $70,000 for
House primary or general election candidates; $1,000 limit on independent expenditures by
groups for or against candidates; all limits to be adjusted by COLAs [limits on spending in
non-publicly funded elections and on independent expenditure overturned by Buckley
decision];
- Party coordinated expenditures allowed national parties to support general election
candidates, beyond contributions, subject to limits (as listed in summary);
- Public funding for presidential primaries and nominating conventions as set forth in
summary above (amount of public funds for general election candidates changed in
accordance with revised spending limit);
- Federal Election Commission set up full-time, bipartisan agency to administer campaign
finance laws, with six voting members (two each appointed by President, Speaker of the
House, and President pro tempore of Senate) and two ex- officio members (Clerk of the
House and Secretary of the Senate); FEC given civil enforcement authority, with criminal
cases referred to the Justice Department [FEC appointment process amended by 1976 Act,
in response to Buckley ruling].
Tariff Schedules Amendments, 1975 [P.L. 93-625].
- Doubled maximum political contribution tax credit to $25 ($50 on joint returns) and tax
deduction to $100 ($200 on joint returns) [repealed by 1978 Revenue Act];
Buckley v. Valeo [424 U.S. 1 (1976)]. Landmark Supreme Court decision:
- Upheld contribution limits and disclosure requirements as serving the basic vital
governmental interest of safeguarding integrity of electoral process by preventing possible
quid pro quo relationships arising from large contributions, without unduly curbing
citizens' and candidates' right to engage in political debate;
- Upheld public funding system for presidential elections;
- Overturned expenditure limits as, unlike contribution limits, constituting an undue burden
on political expression, without a comparable overriding governmental interest in
preventing the actuality or appearance of corruption; invalidated limits were those on
overall campaign spending, spending of candidates' personal funds, and independent
expenditures by individuals or groups; only voluntary spending limits were upheld, such as
those linked with publicly funded presidential races (on overall campaign or candidates'
personal expenditures);
- Declared FEC unconstitutionally constituted because it exercised executive branch
functions but was appointed, in part, by Congress.
FECA Amendments of 1976 [P.L. 94-283]. Primary impetus to enactment
was to reconstitute the FEC, in the wake of Buckley ruling:
- FEC appointments all members to be appointed by the President;
- Additional contribution limits individuals: $5,000 to a PAC, $20,000 to a
national party
committee; PACs: $15,000 to a national party committee; subjected all PACs sponsored by
same organization to a single contribution limit (non-proliferation provision); party
committees $17,500 from national party senatorial committees to general election
candidates;
- Solicitation of PAC funds specified rules for PACs associated with unions, corporations,
and trade associations;
- Legal and accounting fees incurred in complying with FECA were to be exempted from
spending limits of publicly-funded presidential campaigns;
- Matching fund cutoff for candidates who fail to receive 10% of the vote in two
successive primaries; to be restored if they receive 20% in a later primary;
- Independent expenditure disclosure required if at least $100, or to be disclosed within
24 hours, if at least $1,000 and spent within 15 days of an election;
- Union/corporate disclosure of internal partisan communications of over $2,000;
- FEC enforcement increased authority to prosecute violations of law; specified penalties
for violations; outlined FEC responsibilities in issuing advisory opinions and regulations,
conducting investigations, and attempting conciliation with alleged violators of law before
seeking prosecution.
Revenue Act of 1978 [P.L. 95-600].
- Doubled maximum political tax credit to $50 ($100 on joint returns); eliminated tax
deduction [repealed by Tax Reform Act of 1986].
Federal Election Campaign Act Amendments of 1979 [P.L. 96-187].
Impetus for passage was to make FECA requirements less burdensome to candidates, committees,
and citizens and foster greater grassroots role for volunteers and state and local parties.
- Unlimited state and local party spending allowed for get-out-the-vote and registration
drives on behalf of the presidential ticket, and for grassroots and volunteer campaign
activities not aimed at specific federal candidates;
- Disclosure exemptions for candidates and local party committees with less than $5,000 in
financial activity in a year;
- Disclosure itemization threshold increased from $100 to $200 in general and, for
independent expenditures, from $100 to $250;
- Party convention subsidy base level raised from $2 to $3 million plus COLA;
- Excess campaign fundsbanned personal candidate use (except current Members).
Nominating Conventions, 1984 [P.L. 98-355].
- Raised base level of party subsidy from $3 to $4 million plus COLA.
Tax Reform Act of 1986 [P.L. 99-514].
- Repealed political contribution tax credits.
Ethics Reform Act of 1989 [P.L. 101-194].
- Repealed exemption from ban on personal use of excess campaign funds, by 1993.
Omnibus Budget Reconciliation Act of 1993 [P.L. 103-66].
- Tripled presidential election tax checkoff ($3; $6 on joint returns).
FECA, 1995 Amendment [P.L. 104-79].
- Required House candidates to file disclosure reports directly with FEC;
- Required FEC to facilitate electronic filing and record-keeping.
Colorado Republican Federal Campaign Committee v. FEC
[116 S.Ct. 2309 (1996)]. Supreme Court decision:
- Allowed political parties, as well as PACs and individuals, to make independent
expenditures, subject to no spending limits, in federal elections.
Treasury and General Government Appropriations Act, 1999 [P.L.
105-61].
- Limited FEC Commissioners to one six-year term
Treasury and General Government Appropriations Act, 2000 [P.L.
106-58].
- Allowed FEC to require electronic filing, above certain financial activity level
- Allowed administrative fine schedule for minor disclosure violations
- Allowed candidate filing on election cycle, rather than calendar year, basis.
Footnotes
1. (back)The FECA mandates use of federally
regulated money, known as hard money, in federal
elections; by definition, it does not apply to so-called soft money activities that may indirectly
affect federal races. This report examines only hard money regulations. For a discussion of these
terms and their relevance, see: CRS Report 97-91 (pdf) GOV, Soft and Hard Money in Contemporary
Elections: What Federal Law Does and Does Not Regulate, by Joseph E. Cantor.
2. (back)The FECA distinguishes between
expenditures, wherein money is spent to communicate
election messages, and contributions, wherein money and authority to spend it is given to others
(candidates, parties, or PACs) to make expenditures, in turn, on election communications.
3. (back)Limits apply to calendar year unless
otherwise stated; for limits applied on a "per election"
basis, primary, general, and runoff elections are counted separately.
4. (back)Most PACs qualify for
multicandidate status (have at least 50 contributors, are registered for at
least six months, and, except for a state party, contribute to at least five federal candidates).