Contents

• Introduction
• How much could an individual contribute to party committees before the recent change?
• How much may an individual contribute to party committees under the new limits?
• How will PAC contributions to parties be affected?
• Which party committees would be affected?
• Would the proposed provisions affect other contributions or spending surrounding elections?

Summary

This report provides brief answers to frequently asked questions about increased campaign contribution limits in the Consolidated and Further Continuing Appropriations Act, 2015 (H.R. 83; P.L. 113-235), enacted and signed into law in December 2014. The relevant language increases certain contribution limits to national political party committees. This language changes the amounts the two major parties may solicit and collect.

Most notably, three units within each of the national Democratic and Republican parties could be affected. These include a headquarters committee (e.g., the Democratic National Committee), a House campaign committee (e.g., the National Republican Congressional Committee), and a Senate campaign committee (e.g., the National Republican Senatorial Committee). The language permits all six of these national party committees to establish additional accounts, with higher contribution limits than previously permitted. In practice, it appears that maximum individual contributions to a national party have increased from at least $97,200 (or $129,600 if following a recent Federal Election Commission (FEC) advisory opinion) annually to at least $777,600. Inflation adjustments announced in February 2015 bring the individual total to at least $801,600 for 2015. Other national parties, such as third parties, would also be eligible for larger contributions. Although this report emphasizes individual contribution limits, political action committees (PACs) may also increase their party contributions under the bill, to a total of $360,000 for multicandidate PACs—the most common form of PAC.

This updated report is based on information available as of this writing. The FEC has not yet issued regulations or definitive guidance about how the limits will be interpreted. Similarly, political parties have yet to adopt widespread fundraising practices under the new limits. This report will be updated as additional information becomes available.

Introduction

This report provides brief answers to frequently asked questions about selected campaign finance¹ provisions in the Consolidated and Further Continuing Appropriations Act, 2015 (H.R. 83; P.L. 113-235).² The House passed the measure (219 - 206) on December 11, 2014.³ The Senate did so (56-40) on December 13, 2014. The President signed the bill into law on December 16.⁴ Although other provisions address topics such as contractor disclosure,⁵ increased limits for contributions to national party committees have been the subject of most debate. Those increases, particularly for individual contributions, are the subject of this brief overview.

The relevant language in P.L. 113-235 increased contribution limits to national political party committees. Most prominently, these party committees include the Democratic National Committee (DNC), Democratic Congressional Campaign Committee (DCCC), Democratic Senatorial Campaign Committee (DSCC), Republican National Committee (RNC), National Republican Congressional Committee (NRCC), and the National Republican Senatorial Committee (NRSC). These committees may also establish new accounts, each with separate contribution limits, to support party conventions,⁶ facilities, and recounts or other legal matters. In practice, it appears that an individual's contributions to a national party could increase from at least $97,200 annually to at least $777,600. For a two-year election cycle, an individual could give twice that amount, or more than $1.5 million.⁷ Under inflation adjustments announced in February 2015, it appears that an individual may contribute at least $801,600 to a national party committee in 2015.⁸

Although this report emphasizes increases in individual contribution limits, political action committees (PACs) may also make larger contributions to parties. For multicandidate PACs—the most common type of PAC—contributions to a national party appear to have increased from $45,000 to at least $360,000 annually. Unlike limits for individual contributions, those for PACs are not adjusted for inflation.

Ultimately, the impact of the proposed language will depend on a combination of agency implementation and political practice. The Federal Election Commission (FEC) is responsible for administering the increased limits. The agency's rulemaking, advisory opinions, or enforcement activities could further clarify how the provisions will affect donors and elections. On December 17, 2014, the FEC briefly stated that it was "assessing" the language and would issue guidance "as soon as practicable."⁹ Similarly, donor and party decisions will determine how or whether fundraising practices change. In particular, it is unclear how many donors have the ability or desire to make the larger contributions now permitted. As of this writing, how the FEC intends to interpret the contribution limits and how the parties intend to alter fundraising practices, if at all, remains to be seen.

The report has been prepared in response to evolving questions concerning ongoing legislative debate. Some implications remain unclear at this time, and the analysis below could change with additional information. This report will be updated as additional information becomes available.

How much could an individual contribute to party committees before the recent change?

Before P.L. 113-235was enacted, the Federal Election Campaign Act (FECA)¹⁰ permitted an individual to contribute $32,400 annually to national party committees (reflecting 2014 limits, subsequently increased for inflation, as discussed below).¹¹ P.L. 113-235 increased the limits as discussed below. These limits apply separately to the six political committees around which the two major parties are organized. For both parties, these include a headquarters committee (e.g., the Democratic National Committee), a House campaign committee (e.g., the National Republican Congressional Committee), and a Senate campaign committee (e.g., the National Republican Senatorial Committee). Previously, an individual could contribute no more than $97,200 annually to a typically organized national party.¹²

In addition, an October 2014 FEC advisory opinion¹³ (AO) determined that, following the recent repeal of public funding for presidential nominating conventions, separate contribution limits apply to convention funds.¹⁴ Therefore, it appears that a "maxed out" donor could have contributed $129,600 to a national party when counting all three traditional committees plus a convention committee.¹⁵

How much may an individual contribute to party committees under the new limits?

Division N, Section 101 of P.L. 113-235 increased limits for individuals making contributions to national party committees. These provisions, which are effective "on or after" the enactment date, permitted parties to establish new, segregated accounts and accept additional funds to support party conventions, facilities, and recounts or other legal matters. Specifically, the language permitted the national parties to establish up to three additional accounts for each purpose. Overall, it appears that maximum individual contributions increased from $97,200 (or $129,600 if following the FEC AO noted above) for a typical party with three major committees to $777,600. During a two-year election cycle, it appears that an individual could, therefore, contribute up to $1,555,200 to a national party's typical committees.¹⁶

These limits were annual amounts for 2014—when the law was enacted. The original versions of this report showed those amounts in Table 1 below. The current version of the table reflects inflation adjustments announced in February 2015. As the table shows, the 2015 base limit for individual contributions increased to $33,400 (from $32,400 in 2014).

How will PAC contributions to parties be affected?

Although this report emphasizes proposed changes to the individual contribution limits, the language also increases limits for political action committees (PACs) as shown in Table 2 and Table 3 below.

Although there are differences between the increased limits for multicandidate PACs and non-multicandidate PACs, it is unclear how consequential they might be in practice. Given the higher limits for non-multicandidate PACs, it appears that there could be an advantage to a PAC not achieving multicandidate status, although such PACs are rare and it is perhaps unlikely that a committee could practically prevent itself from achieving multicandidate status.¹⁷ In practice, therefore, it appears that the increased limits in Table 3 will be more consequential than those in Table 2.¹⁸ FECA does not permit inflation adjustments for multicandidate PAC contributions (Table 3).

Which party committees would be affected?

Six committees appear to be most relevant. The two major parties each have three main national political committees that perform similar functions and are organized similarly. On the Democratic side, these include the DNC, DCCC, and DSCC. Republican counterpart committees include the RNC, NRCC, and NRSC.¹⁹ The new law appears to be relevant for all national party committees, including third parties.

Would the proposed provisions affect other contributions or spending surrounding elections?

The provisions do not appear to affect other fundraising or spending provisions in elections per se.²⁰ It is possible that with additional freedom to make comparatively large contributions to political parties, some donors who would have previously given money to super PACs or other "outside" groups would instead redirect those funds to parties. It is also possible that increased party-funding limits will provide another outlet for donors but not necessarily redirect existing funds. As of this writing, the FEC has not yet announced regulations or formal guidance surrounding how it plans to interpret the new limits—including how the "base" contribution amounts might interact with the limits for the three new accounts, if at all. Similarly, the parties have yet to make widespread use of the new limits.

Those supporting the increased limits have reportedly suggested that the proposed contributions would be more transparent than those given to groups such as politically active tax-exempt organizations (e.g., 501(c)(4) social welfare groups), and would provide parties with more funds to compete in an environment increasingly dominated by nonparty groups. Opponents counter that the proposed changes have not been subject to substantial consideration and would represent a return to the "soft money" era that existed before Congress enacted the Bipartisan Campaign Reform Act (BCRA), when parties could accept unlimited contributions for generic "party-building" activities.²¹ The precise implications of the proposed new limits remain to be seen.

Footnotes