Coordinated Party Expenditures in Federal Elections: An Overview
Released: 2016-08-15T00:00:00

What Are Coordinated Party Expenditures?

Federal campaign finance law provides political parties with three major options for providing financial support to House, Senate, and presidential candidates: (1) direct contributions, (2) coordinated expenditures, and (3) independent expenditures. With direct contributions , parties give money (or in the case of in-kind contributions, financially valuable services) to individual campaigns, but such contributions are subject to strict limits; most party committees are limited to direct contributions of $5,000 per candidate, per election. Since the 1996 Colorado I Supreme Court ruling (discussed below), parties may make independent expenditures , which are not limited, on anything allowable by law, but may not coordinate those expenses with candidates. Coordinated expenditures allow parties (notwithstanding other provisions in the law regulating contributions to campaigns) to buy goods or services on behalf of a campaign, and to discuss those expenditures with the campaign. Candidates may request that parties make coordinated expenditures, and may request specific purchases, but parties may not give this money directly to campaigns. Because parties are the spending agents, they (not candidates) report their coordinated expenditures to the Federal Election Commission (FEC).

Coordinated party expenditures are subject to limits based on office sought, state, and voting-age population (VAP). Exact amounts are determined by formula and updated annually by the FEC. Limits for Senate candidates in 2016, adjusted for inflation, ranged from $96,100 in states with the smallest VAPs to approximately $2.9 million in California. In 2016, parties may make up to $48,100 in coordinated expenditures in support of each House candidate in multi-district states, and $96,100 in support of House candidates in single-district states. State party committees may authorize their nat ional counterparts to make coordinated party expenditures on their behalf (or vice versa). If such agreements exist, one party could essentially assume the spending limit for another in particular states, in which case the designated party could spend up to its own limit and up to the other party's limit. Parties may also make coordinated expenditures on behalf of presidential candidates. For 2016, the presidential limit is $23.8 million.

Overview of Relevant Supreme Court Precedent8

Independent Spending Limits Found Unconstitutional and Contribution Limits Upheld: Buckley v. Valeo

In its 1976 decision, Buckley v. Valeo , the Supreme Court considered the constitutionality of the Federal Election Campaign Act (FECA), and determined that limits on independent expenditures were unconstitutional, while it upheld reasonable limits on contributions. FECA defines an "independent expenditure" to include spending for a communication that expressly advocates the election or defeat of a clearly identified candidate, and is not made in concert or cooperation with or at the request or suggestion of a candidate or a political party. In contrast, a "contribution" is generally given to a candidate or party, and is defined to include any gift of money or anything of value made by any person for the purpose of influencing a federal election.

Most notably, the Buckley Court determined that the spending of money, whether in the form of contributions or expenditures, is a form of "speech" protected by the First Amendment. However, according to the Court, contributions and expenditures invoke different degrees of First Amendment protection. Recognizing contribution limitations as one of FECA's "primary weapons against the reality or appearance of improper influence" on candidates by contributors, the Court found that these limits "serve the basic governmental interest in safeguarding the integrity of the electoral process." On the other hand, the Court determined that FECA's expenditure limits on individuals, political action committees (PACs), and candidates impose "direct and substantial restraints on the quantity of political speech" and are not justified by an overriding governmental interest.

Independent Party Spending Limits Found Unconstitutional and Coordinated Party Expenditure Limits Upheld: Colorado I and II

In Colorado Republican Federal Campaign Committee v. Federal Election Commission (FEC) (Colorado I ( 1996 ) ) , the Supreme Court found that political parties have a constitutional right to make unlimited independent expenditures. The Court determined that FECA's coordinated party expenditure limit was unconstitutionally enforced against a party's funding of radio advertisements directed against a likely opponent.

Specifically, this case concerned the constitutionality of the coordinated party expenditure limit as applied to expenditures for radio ads by the Colorado Republican Party (CRP) that criticized the likely Democratic Party candidate in the 1986 U.S. Senate election. The Court's ruling turned on whether CRP's ad purchase was an "independent expenditure," a "campaign contribution," or a "coordinated expenditure." The Court found that the CRP's ad purchase was an independent expenditure deserving constitutional protection, emphasizing that the "constitutionally significant fact" of an independent expenditure is the absence of coordination between the candidate and the source of the expenditure. Independent expenditures, the Court held, do not raise heightened governmental interests in regulation because the money is deployed to advance a political point of view separate from a candidate's viewpoint and, therefore, cannot be limited.

The Court's opinion in Colorado I was limited to the constitutionality of the application of FECA's coordinated party expenditure limit to an independent expenditure by the CRP. Later, in FEC v. Colorado Republican Federal Campaign Committee (Colorado II) , the Court considered a facial challenge to the constitutionality of the limit on coordinated party spending. In Colorado II, the Supreme Court ruled that a political party's coordinated expenditures—unlike genuine independent expenditures—may be constitutionally limited in order to minimize circumvention of FECA contribution limits. As the Court explained, coordinated party expenditures have no "significant functional difference" from direct party candidate contributions.

Relying on its holding in Colorado I , in a case evaluating the constitutionality of the Bipartisan Campaign Reform Act of 2002 (BCRA), the Court invalidated a statutory provision that essentially required political parties to choose between making coordinated or independent expenditures after nominating a candidate. In McConnell v. FEC , the Court determined that the statute burdened the right of parties to make unlimited independent expenditures and therefore, was unconstitutional.

In Citizens United v. FEC , the Court overruled a separate portion of McConnell and invalidated BCRA's restriction on corporate and union spending for electioneering communications, as well as the long-standing ban on such spending for independent expenditures. As the U.S. Court of Appeals for the Fifth Circuit has found, it does not appear that Citizens United affected the Supreme Court's holding in Colorado II . In contrast to the coordinated party expenditure limit addressed in Colorado II , Citizens United evaluated the constitutionality of limits on independent —not coordinated—spending. Reiterating its holding in Buckley , the Court in Citizens United found that while large campaign contributions create a risk of quid pro quo candidate corruption, large independent expenditures do not. Therefore, in Buckley , the Citizens United Court observed, it determined that limiting independent expenditures fails to serve any substantial government interest in stemming either the reality or the appearance of such corruption.

Recent Legislative Activity

Reconsidering coordinated party expenditure limits is a consistent part of the debate over the role of political parties compared with other political committees and "outside groups." However, bills devoted specifically to altering the limits have not been considered recently. Perhaps most notably, H.R. 6286 (Cole) during the 111 th Congress, and S. 1091 (Corker) and H.R. 3792 (Wamp) during the 110 th Congress, would have eliminated existing caps on coordinated party expenditures. On April 18, 2007, the Senate Committee on Rules and Administration held a hearing on S. 1091 ; it was not subject to additional legislative action. H.R. 3792 was introduced on October 10, 2007; it did not receive additional action.

Since that time, legislative activity concerning coordinated party expenditures has been limited. During this period, most proposals to alter coordinated party expenditure limits have been components of other bills. As Table 1 below shows, public financing and appropriations legislation considered during the 114 th Congress would increase or eliminate limits on coordinated party expenditures in some cases. As of this writing, only one such bill, S. 1910 , has advanced beyond introduction, but this appropriations bill was superseded by another measure that excluded the coordinated party expenditure language.

Financial Overview and Analysis34

Although coordinated expenditures played a large role in party financial activity throughout the 1970s and 1980s, recent elections suggest that party reliance on coordinated expenditures is changing. As Table 2 and Figure 1 (below) show, although the Colorado I decision permitted parties to make unlimited independent expenditures during and after the 1996 cycle, those expenditures remained relatively modest through 2002. From 1996 to 2002, total party coordinated expenditures outpaced independent expenditures—often by large amounts.

Beginning in 2004, however, party spending shifted dramatically, with far more total independent expenditures than coordinated expenditures. In 2004, the two major parties made more than four times in independent expenditures what they did in coordinated expenditures. That allocation of resources continued thereafter, albeit in some cases less dramatically than in 2004. In 2014, the two major parties spent more than eight times on independent expenditures what they did in coordinated party expenditures (approximately $229 million versus about $28 million). These data do not establish why independent expenditures were so heavily favored compared with coordinated party expenditures in 2014. However, some disparity would be expected because spending would be naturally lower without a presidential race on which to make coordinated expenditures. It also is possible that parties are relying on "outside" spending, such as by super PACs, and are instead focusing their efforts on other activities (including their own independent expenditures). The decrease also could reflect party decisions about whether to support particular House or Senate campaigns. As the table also shows, at various points since 1996, each major party has outspent the other in coordinated expenditures. Despite some exceptions, Democrats and Republicans generally have allocated similar amounts to coordinated party expenditures.

One potential concern about lifting the caps on party coordinated expenditures could be that one party would have an inherent advantage over the other. Recent fundraising totals suggest that the historic fundraising gap between Democrats and Republicans has narrowed, although disparities between the two parties still exist. As Table 3 and Figure 2 show, since 1996, local, state, and national Republican Party committees have accumulated more receipts than their Democratic counterparts, as has generally occurred since at least the 1970s. Although Republicans raised approximately 88% more than Democrats in 1996 ($416.5 million versus $221.6 million), beginning in 2004, the two parties began to raise roughly similar amounts. Despite a 24% Republican advantage in 2006 ($599 million versus $483.1 million), differences between the parties have been smaller since 2008. In 2012, the Democratic and Republican parties both raised about $800 million. In 2014, however, Democrats raised 16% more than Republicans ($657.2 million versus $565.7 million). On their own, these data do not suggest particular outcomes if caps on party coordinated expenditures were lifted, but they do indicate that one party might not necessarily have a major total financial advantage over the other if the caps are lifted in the near future. Although the parties would not choose to spend all those funds on coordinated party expenditures, the data suggest that they would likely be working with roughly equal resources.

For those who support lifting the caps on coordinated party expenditures, current limits impinge on parties' abilities to orchestrate unified campaigns with their candidates after the limits are reached. Unrestricted coordinated party expenditures could shift party spending away from independent expenditures, although each option would retain unique characteristics. Parties might continue to choose independent expenditures if they wish to distance campaigns from what many political professionals and some candidates view as necessary, but politically unpopular, purchases (e.g., for political advertising attacking opponents). On the other hand, coordinated expenditures would be more attractive for parties wishing to communicate freely with campaigns about campaign-related spending. Raising or eliminating coordinated party expenditure limits might also provide parties with additional resources to compete against independent expenditures from super PACs or other "outside" groups. Additional coordinated expenditures could, therefore, strengthen arguably weakening ties between parties and campaigns.

Proponents of limits on party coordinated expenditures contend that the caps reduce the amount of money in politics. They also potentially prevent circumvention of individual contribution limits by donors who may seek to indirectly support campaigns by making contributions to political parties. (However, it should be noted that FECA already restricts "earmarked" contributions.) For those who generally support regulating political money, lifting or raising the caps on party-coordinated expenditures would likely be objectionable on principle, could appear to undercut similar regulatory efforts adopted since the 1970s, and could go against public sentiment generally favoring limiting the amount of money in politics.

Finally, revisiting coordinated party expenditure limits might also be relevant following a 2014 U.S. Supreme Court decision, McCutcheon v. FEC . The McCutcheon case, which concerned now-invalidated aggregate limits on contributions to political parties, is not centrally related to coordinated party expenditures. However, post- McCutcheon , some might argue that providing parties with increased limits (or none) on coordinated party expenditures is a logical extension of their newfound ability to solicit donors who previously would have been unable to contribute to as many party committees as they wished. Additional discussion of McCutcheon and potential party fundraising implications appears in other CRS products.