Jonah Patel
Political campaigns are often reliant on contributions to get off the ground, but should the government limit how much can be donated? The Federal Election Commission (FEC) enforces the Federal Election Campaign Act of 1971 (FECA), which limits the amount of money individuals and political organizations can give to a candidate running for federal office. These limits are adjusted for inflation every two years, with the current limit for contributions by persons to candidates being $3,300 per election, per candidate. However, independent-expenditure-only political committees, or Super PACs, can accept unlimited contributions, even from corporations. With such varying limits, and some entities not limited at all, the question of whether the government should step in to further limit contributions to political campaigns is an important one.
| Characteristics | Values |
|---|---|
| Who can contribute | Individuals, partnerships, PACs, minors, corporations, labor organizations, federal government contractors, foreign nationals, and more |
| Who cannot contribute | Federal government contractors, foreign nationals, charitable organizations, and unincorporated tribal entities |
| Limits on contributions | Indexed for inflation every two years; $3,300 per election per candidate, $41,300 per calendar year for national party committees, $57,800 for contributions by certain political party committees to Senate candidates |
| Rules for contributions | Must be deposited within 10 days, designated for specific elections, and reported with the name of the donor |
| Rules for expenditures | Cannot be retained if they exceed limits; must follow special procedures for handling such funds |
| State-level variations | New York State has its own contribution limits for state and local elections, including limits for family members and sole proprietors |
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What You'll Learn
The Federal Election Campaign Act (FECA) of 1971
FECA was not the first piece of legislation to address campaign finance reform. The Tillman Act of 1907 banned corporate contributions in federal elections, and the Publicity Act of 1910, as amended in 1911, required disclosure by campaign committees and limited campaign spending. The Federal Corrupt Practices Act of 1925 imposed additional disclosure requirements, and amendments to the Hatch Act of 1939 in 1940 limited contributions to candidates and national party committees while imposing spending limits on party committees. The Taft-Hartley Act of 1947 outlawed labor union contributions and restricted corporate and labor spending on federal elections.
Despite these earlier efforts, the spending limits imposed were largely ineffective, and the disclosure requirements were often ignored due to a lack of enforcement. FECA built upon these earlier laws and served as the framework for regulating the financing of federal elections. It limited the amount that candidates could contribute to their own campaigns and the amount that federal campaigns could spend.
FECA has been amended several times since its enactment. In 1974, following the Watergate scandal, Congress approved significant amendments that created the Federal Election Commission (FEC) and imposed additional contribution and spending limits. These amendments limited the amount an individual could contribute to any federal campaign, political party, or political committee, and the amount a political committee could contribute to a candidate. They also imposed limits on independent spending by individuals or groups relative to a clearly identified candidate. The FEC was established as an independent federal agency to enforce the regulatory regime, with the authority to make rules and impose civil penalties for violations.
Further amendments were made to FECA in 1976 after the Supreme Court struck down several provisions as unconstitutional in Buckley v. Valeo, and in 2002 with the passage of the Bipartisan Campaign Reform Act (BCRA). In 2010, the Supreme Court's decision in Citizens United v. Federal Election Commission invalidated the BCRA's restrictions on corporate and union spending on independent political advertising. Finally, in 2014, the Supreme Court struck down FECA amendments that imposed aggregate limits on individual contributions to multiple federal candidates, political parties, and political action committees (PACs).
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The role of the Federal Election Commission (FEC)
The Federal Election Commission (FEC) is an independent regulatory agency established in 1975 to administer and enforce the Federal Election Campaign Act of 1971 (FECA), as amended. The FEC has jurisdiction over the financing of campaigns for the U.S. House, Senate, Presidency, and Vice Presidency. Its mission is to protect the integrity of the federal campaign finance process by providing transparency and fairly enforcing and administering federal campaign finance laws.
The FEC enforces federal campaign finance laws, including monitoring donation prohibitions, setting contribution limits for individuals and groups, and overseeing public funding for presidential campaigns. The Act and Commission regulations require federal political committees to file periodic campaign finance reports disclosing their receipts and disbursements. These reports must include the names, addresses, occupations, and employers of individual contributors who give more than a certain amount (typically $200) during an election cycle.
The FEC's role in setting contribution limits is particularly important. The contribution limits apply to both individuals and groups, such as political committees. For example, a campaign is prohibited from retaining contributions that exceed the limits, and must follow special procedures for handling excessive funds. The FEC also recommends that campaigns encourage contributors to designate their contributions for specific elections, ensuring the contributor's intent is clear.
The FEC's enforcement of these laws is crucial for maintaining transparency and integrity in the campaign finance process. Enforcement cases can arise from audits, complaints, referrals from other government agencies, or self-submissions, with the Office of General Counsel handling most cases as Matters Under Review (MURs). The FEC also has exclusive jurisdiction over the civil enforcement of federal campaign finance law, demonstrating its central role in regulating campaign contributions.
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Who can and can't contribute
In the United States, the Federal Election Commission (FEC) enforces the Federal Election Campaign Act of 1971 (FECA), which limits the amount of money individuals and political organizations can give to a candidate running for federal office. These limits are indexed for inflation every two years, based on the change in the cost of living since 2001. For 2023-2024, the contribution limits are $3,300 per election, per candidate, and $41,300 per calendar year for national party committees.
There are also restrictions on who can contribute to political campaigns. For example, incorporated charitable organizations and federal government contractors are prohibited from making contributions in connection with federal elections. Foreign nationals are also prohibited from making contributions to any federal, state, or local election. Additionally, contributions from minors and corporations are prohibited, while labour organizations and political action committees (PACs) face limitations.
At the state level, contribution limits vary. For example, in New York, there are limits on the amount of money that can be contributed to candidates for state offices, such as Governor, Lieutenant Governor, and State Supreme Court Justice. These limits apply to individuals, corporations, LLCs, and other entities.
It is worth noting that independent-expenditure-only political committees, often referred to as "Super PACs", can accept unlimited contributions, including from corporations and labour organizations.
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Designated vs undesignated contributions
The Federal Election Commission (FEC) enforces the Federal Election Campaign Act of 1971 (FECA), which limits the amount of money individuals and political organizations can give to a candidate running for federal office. These limits apply to contributions made to a federal candidate's campaign for the U.S. House, U.S. Senate, or U.S. President.
Designated contributions are those that are earmarked by the contributor for a specific election. This ensures that the contributor's intent is conveyed to the candidate's campaign. Written designations are particularly important for contributions from political committees, as they promote consistency in reporting and avoid the appearance of excessive contributions. Designated contributions count against the donor's contribution limits for the named election.
Undesignated contributions, on the other hand, are not specified for a particular election. These count against the donor's contribution limits for the candidate's next election. For example, an undesignated contribution made after a candidate has won the primary but before the general election would apply toward the contribution limit for the general election.
The date a contribution is made and the date it is received are both significant for contribution limits and reporting purposes. The date of receipt is the date the campaign or a representative of the campaign actually receives the contribution. This date is used for reporting and can affect the application of the net debts outstanding rule.
It is important to note that campaigns are prohibited from retaining contributions that exceed the limits. In the case of excessive contributions, special procedures must be followed. Additionally, the contribution limits are adjusted for inflation every two years, based on the change in the cost of living since 2001.
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Limits on contributions to candidates
The Federal Election Commission (FEC) enforces the Federal Election Campaign Act of 1971 (FECA), which limits the amount of money individuals and political organisations can give to a candidate running for federal office. The FEC also sets campaign contribution limits for individuals and groups.
The FEC recommends that campaigns encourage contributors to designate their contributions for specific elections. This ensures that the contributor's intent is conveyed to the campaign, and it also promotes consistency in reporting, avoiding the appearance of excessive contributions. Campaigns are prohibited from retaining contributions that exceed the limits, and they must follow special procedures for handling such funds.
There are also rules about who can and cannot contribute to a federal candidate. For example, charitable organisations are prohibited from making contributions in connection with federal elections, and campaigns may not accept or solicit contributions from federal government contractors. Federal law also prohibits contributions from foreign nationals.
In addition, there are rules regarding contributions from trusts. Campaigns can accept contributions from an individual's estate made through a testamentary trust, subject to the same limitations as the decedent during their lifetime. Contributions from living trusts are also allowed, as long as the trust's beneficial owner has control over the use of the funds.
At the state level, there are also contribution limits in place, such as in New York, where the State Board of Elections sets limits for various offices, including Governor, Lieutenant Governor, and State Supreme Court.
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Frequently asked questions
The Federal Election Commission (FEC) enforces the Federal Election Campaign Act of 1971 (FECA) which limits the amount of money individuals and political organizations can give to a candidate running for federal office. The contribution limits are adjusted for inflation every two years and the current limits for 2023-2024 are $3,300 per election, per candidate, and $41,300 per calendar year for national party committees.
Contributors can be individuals, corporations, LLCs, labor unions, political action committees (PACs), and other entities. However, federal law prohibits contributions from foreign nationals, federal government contractors, and incorporated charitable organizations.
Yes, there are rules in place regarding the designation of contributions. Campaigns are encouraged to have contributors designate their contributions for specific elections to ensure the contributor's intent is clear. Undesignated contributions are counted against the donor's limit for the next election. Additionally, contributions from trusts are subject to specific requirements and restrictions.
Yes, independent-expenditure-only political committees, also known as "Super PACs", can accept unlimited contributions, including from corporations and labor organizations. Additionally, local-level candidates and state-level candidates not participating in public financing programs are not subject to contribution limits.
