CRS Issue Statement on Campaign Finance

R. Sam Garrett, Coordinator
Analyst in American National Government

For decades, public disclosure of information about campaign spending, and restrictions on funding sources, have been seen as hallmarks of fair and transparent elections. Like previous Congresses, the 111th Congress has faced questions about how and whether to regulate political money and how to enforce federal campaign finance law. No changes to campaign finance law were enacted during the first session of the 111th Congress, but the issue of whether, or how, federal campaign finance policy should be revisited ahead of the 2010 elections remains relevant for the House and Senate. Policy solutions could affect, and be constrained by, existing law and regulation, constitutional considerations, and campaign practices. 

The Supreme Court's consideration of Citizens United v. Federal Election Commission has been the most prominent campaign finance issue facing the second session of the 111th Congress. In Citizens United, a tax-exempt 501(c)(4) organization challenged FECA regulation of "electioneering communications," arguing that its advertisements were constitutionally protected issue advocacy and, therefore, should be exempt from regulation. Dozens of bills were introduced responding to the decision, but the legislative response receiving the most attention to date is the DISCLOSE ("Democracy is Strengthened by Casting Light on Spending in Elections") Act, H.R. 5175 and S. 3295 sponsored by Representative Van Hollen and Senator Schumer. H.R. 5175 was reported, as amended, by the Committee on House Administration on May 25, 2010. The House of Representatives passed the bill, with additional amendments, on June 24, 2010, by a 219-206 vote. The Senate has, thus far, taken no major action on either measure. 

Various other policy and legal issues could also be addressed during the second session of the 111th Congress, either in response or in addition to action surrounding Citizens United. Questions related to public campaign financing are among the most contentious and complex issues that Congress could face. Proposed public financing of congressional campaigns was the subject of a Committee on House Administration hearing during the first session of the 111th Congress. In addition to potential additional action on congressional public financing, Congress is expected to consider whether to revamp the presidential public financing system. Although the presidential public financing program has suffered from financial difficulties and decreased candidate participation since 2000, the 2008 elections were widely viewed as the last in which the current program could continue to be attractive to major candidates. If Congress chooses to revise the program, as has been widely advocated, it will have to consider whether existing benefits and spending limits should be modernized or whether an entirely new system should be created. The role of small donors and competing views of their significance for public financing is likely to shape that debate. 

Other major questions include to what extent the Federal Election Campaign Act (FECA) should regulate political organizations. This is especially true for entities currently regulated primarily by Sections 527 and 501(c) of the Internal Revenue Code (IRC), but not necessarily by FECA. Although 527s were not as actively engaged in the 2008 elections as they were in 2004, the groups' activities and regulatory status continue to be controversial. Some would-be 527s also appear to be organizing instead as various 501(c) entities, suggesting another avenue of potential legislative and regulatory concern.


Date of Report: July 20, 2010
Number of Pages: 3
Order Number: IS40277
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