Eleanor Finch
The Bipartisan Campaign Reform Act of 2002, also known as the McCain-Feingold Act, is a US federal law that regulates the financing of political campaigns. The Act was designed to address the increased role of soft money in campaign financing, by prohibiting national political party committees from raising or spending funds outside the limits set by federal law. The Act also regulates electioneering communications and has been subject to several legal challenges and amendments since its enactment. The Bipartisan Campaign Reform Act has had a significant impact on political donations, with the primary purpose of eliminating the use of soft money by political parties and limiting the amount individuals and select political committees can contribute to federal candidates.
| Characteristics | Values |
|---|---|
| Purpose | To eliminate the use of soft money in campaign financing and to regulate electioneering communications |
| Definition of Soft Money | Money raised outside the limits and prohibitions of federal campaign finance law |
| Soft Money Ban | Prohibits national political party committees from receiving or using soft money in federal elections |
| State and Local Parties | Prohibits state, district, and local political parties from receiving or using soft money for federal election activities |
| Federal Candidates and Officeholders | Prohibits federal candidates and officeholders from raising or using soft money for federal election activities |
| State and Local Candidates and Officers | Bans state and local candidates and officers from raising and spending non-federal funds for public communications about federal candidates |
| Electioneering Communications | Defines and regulates electioneering communications, including those that refer to a federal candidate and promote, attack, support, or oppose that candidate |
| 527 Organizations | Prohibits solicitations and donations by national, state, and local party committees for 527 organizations, which claim tax exemption as "political organizations" |
| Hard Money | Funding donated directly to a campaign or political party |
| Contribution Limits | Raised contribution limits for individuals and select political committees to federal candidates, with some limits indexed to inflation |
| Millionaire's Amendment | Allowed candidates whose opponents spent a significant amount of personal wealth to accept contributions exceeding FECA limits |
| Constitutional Challenges | Some provisions have been challenged and struck down by the Supreme Court on First Amendment grounds |
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What You'll Learn
The Bipartisan Campaign Act's impact on soft money donations
The Bipartisan Campaign Reform Act of 2002 (BCRA) was designed to address the increased role of soft money in campaign financing. Soft money refers to funds raised outside the limits and prohibitions of federal campaign finance law. Prior to the BCRA, soft money was a major component of national party fundraising, with corporations and unions donating large, sometimes unlimited, amounts to state parties and candidates. This allowed donors to circumvent the Federal Election Campaign Act (FECA) limits on contributions to federal candidates and national party committees.
The BCRA sought to end the use of soft money in federal elections by prohibiting national political party committees from receiving or using soft money. It also banned federal candidates and officeholders from raising or using soft money for federal election activities. These provisions were upheld by the Supreme Court in McConnell v. FEC, which recognised the importance of preventing the "actual or apparent corruption" of federal candidates and officeholders.
The BCRA also raised contribution limits for individuals and select political committees to federal candidates, with some limits indexed to inflation. However, the aggregate individual contribution limits were struck down by the Supreme Court in 2014.
The Act's regulation of soft money has been controversial, with critics arguing that it restricts political speech and damages American democracy. However, supporters of the BCRA maintain that it is necessary to prevent corruption and ensure transparency in campaign financing.
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How the Act affects political donations from corporations
The Bipartisan Campaign Reform Act of 2002 (BCRA), also known as the McCain-Feingold Act, was a significant amendment to the Federal Election Campaign Act of 1971. The primary objective of the BCRA was to address the growing use of "soft money" in campaign financing and prohibit national political party committees from raising or spending funds not subject to federal limits.
Soft money refers to funding contributed to organizations, often known as "527s", that advocate for issues and indirectly support candidates without explicitly backing their election or defeat. These 527 organizations claim tax exemption as political organizations under Section 527 of the Internal Revenue Code but are not registered as "political committees" under the Federal Election Campaign Act.
The BCRA banned national party committees and their agents from soliciting, receiving, or spending any funds not subject to the limits, prohibitions, and reporting requirements of the Federal Election Campaign Act (FECA). This restriction applied to both federal and state elections. The Act also prohibited federal candidates and officeholders from soliciting, receiving, or spending soft money in connection with federal elections and limited their ability to do so in state elections.
The impact of the BCRA on political donations from corporations is significant. Before the Act, corporations and unions were prohibited from contributing directly to federal candidates or committees. However, they could donate substantial, sometimes unlimited, amounts to state parties and candidates. These soft-money contributions could then be channelled to federal candidates and national party committees, circumventing the FECA limits.
The BCRA closed this loophole by prohibiting federal candidates from using corporate and union funding for television advertisements within specific time frames before elections. Additionally, the Act raised contribution limits for individuals and select political committees to federal candidates, with some limits indexed to inflation.
In summary, the Bipartisan Campaign Reform Act of 2002 significantly affected political donations from corporations by eliminating the use of soft money, closing loopholes, and increasing transparency in campaign financing. The Act's provisions aimed to reduce the influence of corporate and union funding in federal elections and ensure compliance with contribution limits.
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Changes to individual contribution limits
The Bipartisan Campaign Reform Act (BCRA) of 2002, also known as the McCain-Feingold Act, was a significant amendment to the Federal Election Campaign Act (FECA) of 1971. The primary objective of the BCRA was to address the increasing use of "soft money" in political campaign financing and to regulate electioneering communications.
The BCRA made several changes to individual contribution limits, which are detailed below:
- Prior to the BCRA, individual contributions were limited to $1,000 per federal candidate (or candidate committee) per election. However, state campaign finance rules differed, with some states allowing corporations and unions to donate unlimited amounts to state parties and candidates.
- The BCRA prohibited national political party committees from receiving or using soft money in federal elections. Soft money refers to funds raised outside the limits and prohibitions of federal campaign finance laws.
- State, district, and local political parties were also prohibited from receiving or using soft money for specified federal election activities, such as voter registration drives and get-out-the-vote efforts. For these activities, non-federal funds, known as Levin funds, could be used.
- Federal candidates and officeholders were banned from raising or using soft money for federal election activities.
- The BCRA included a provision known as the "millionaire's amendment," which attempted to equalize campaigns by increasing the legal limit on contributions for a candidate who was significantly outspent by an opponent using personal wealth. This provision was later overturned by the Supreme Court in 2008.
- The BCRA raised the aggregate individual contribution limits from $25,000 per year to $95,000 every two years. However, these aggregate limits were struck down by the Supreme Court in 2014.
- The law also allowed state and local party organizations to raise contributions of up to $10,000 under state law rules to support certain grassroots political activities affecting both state and federal elections.
These changes to individual contribution limits under the BCRA aimed to reduce the influence of soft money in political campaigns and promote transparency in campaign financing.
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The Act's influence on state and local party committees
The Bipartisan Campaign Reform Act of 2002 (BCRA), also known as the McCain-Feingold Act, was a significant amendment to the Federal Election Campaign Act of 1971. The primary purpose of the BCRA was to address the increased use of "soft money" in campaign financing and to regulate electioneering communications. Soft money refers to funds raised outside the limits and prohibitions of federal campaign finance laws, often contributed to tax-exempt organisations that indirectly advocate for candidates without specifically calling for their election or defeat.
The BCRA had a significant influence on state and local party committees by restricting their use of soft money and limiting their fundraising and spending activities. Firstly, the Act prohibited state, district, and local political parties from receiving or using soft money for federal election activities. This included voter registration drives and get-out-the-vote activities, which these parties could now only fund using non-federal funds, also known as Levin funds. The BCRA also limited the ability of state and local candidates and officers to raise and spend non-federal funds for public communications that promote, attack, support, or oppose a federal candidate.
Additionally, the BCRA allowed state and local party organisations to raise contributions of up to $10,000 under state law rules to support grassroots political activities affecting both state and federal elections. This provision aimed to reduce the incentive for political parties to misrepresent their fundraising and campaigning activities and encourage long-term strategies for building electoral strength.
The Act also addressed the role of state committees in influencing federal elections. It required that certain activities, such as voter identification, get-out-the-vote efforts, and generic campaign activity connected to a federal election, be financed with federal funds or a combination of federal and Levin funds. This provision recognised that state committees could be used as an avenue for the same corrupting forces influencing national party committees.
While the BCRA primarily focused on national political committees, its provisions regarding soft money and electioneering communications had a substantial impact on state and local party committees. These provisions aimed to increase transparency and reduce the influence of soft money on political campaigns at all levels.
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The role of 527 organizations in political donations
The Bipartisan Campaign Reform Act of 2002, also known as the McCain-Feingold Act, amended the Federal Election Campaign Act of 1971 to address the increased role of soft money in campaign financing. Soft money refers to funds raised outside the limits and prohibitions of federal campaign finance law.
The Act prohibits national political party committees from raising or spending any funds not subject to federal limits and bans state and local party committees from using such funds for activities affecting federal elections. This includes prohibiting solicitations and donations by national, state, and local party committees for 527 organizations that are not federal political committees or candidates' committees.
Now, what exactly are 527 organizations, and what role do they play in political donations?
527 organizations are political committees that are identified by their tax filings with the Internal Revenue Service (IRS) under Section 527 of the Internal Revenue Code. This section grants tax-exempt status to political committees at the national, state, and local levels. These organizations are typically formed to influence an issue, policy, appointment, or election at any level of government. They can raise unlimited funds from various sources, including individuals, corporations, labor unions, and even other non-profits, without any upper limits on contributions or spending.
While 527s cannot coordinate with or contribute directly to federal candidates, they can establish federal political action committees to raise funds for those candidates. They are, however, allowed to give money directly to state and local candidates. Additionally, 527s are permitted to buy political ads, but they must file additional disclosure information with the FEC, especially if the ads mention or reference a federal candidate within 60 days of the general election.
In summary, 527 organizations play a significant role in political donations by providing a flexible structure for political committees to raise and spend funds without many of the restrictions that apply to other types of political organizations. They operate in a somewhat grey area of the law, influencing elections and policy debates without explicitly advocating for or against specific candidates.
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Frequently asked questions
The Bipartisan Campaign Reform Act of 2002, also known as the McCain-Feingold Act, is a United States federal law that amended the Federal Election Campaign Act of 1971. The Act was designed to address the increased role of soft money in campaign financing and the proliferation of issue ads that undermined contribution limitations.
Soft money refers to funding contributed to organizations, often known as "527s", that advocate for issues and indirectly advocate for candidates without specifically advocating for their election or defeat. Soft money is not subject to federal limits and prohibitions.
The Act prohibits national political party committees from receiving or using soft money in federal elections. It also prohibits federal candidates and officeholders from raising or using soft money for federal election activities. Additionally, the Act raised contribution limits for individuals and select political committees to federal candidates, with some limits indexed to inflation.
Yes, the Act upholds the prohibition against direct contributions by corporations to candidates. It also includes provisions that regulate "electioneering communications", which are defined as public communications that refer to a clearly identified federal candidate and promote, attack, support, or oppose that candidate.
Yes, the Act has been subject to several legal challenges. In 2003, the Supreme Court upheld the Act's constitutionality in McConnell v. FEC, specifically regarding the control of soft money and the regulation of electioneering communications. However, the Court found the ban on contributions from minors and the "choice provision" to be unconstitutional. In 2008, the "millionaire's amendment" of the Act was overturned by the Supreme Court in Davis v. Federal Election Commission.
