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FEC Adjusts Contribution Limits for Inflation

Beginning today, Members of Congress will be able to raise even more campaign cash than they ever have before. On Thursday, the Federal Election Commission, for the first time ever, made inflation adjustments to federal contribution limits.

Individual donors can now write checks to their favorite Congressional candidates for a maximum of $4,200 per two-year election cycle — $2,100 for the primary and $2,100 for the general election. Donors can also give as much as $26,700 per calendar year to the national party committees.

By contrast, donations were capped at $2,000 and $25,000, respectively, during the 2004 election cycle.

The higher contribution limits are a consequence of the Bipartisan Campaign Reform Act, which required for the first time that the FEC adjust donation limits for inflation every two years.

Specifically, BCRA mandates that the limit for contributions by individuals and other persons under the law be increased every odd-numbered year by the percentage difference in the consumer price index between the current year and the base year of 2001.

“Welcome to election law for math majors,” remarked Michael Toner, a Republican who sits on the FEC.

Calling the changes a product of “sound legislative judgment,” Toner expects the indexing to help ameliorate a long-standing problem of rigid contribution limits that were eroded each year by inflation.

In addition to increasing the limits on what individuals can give to federal candidates, the FEC also increased the overall amount an individual can give to all federal-level recipients — candidates, parties and party affiliates — from $95,000 per two-year cycle to $101,400. This number comes from the new $40,000 limit on donations to candidates (which was just raised from $37,500) and the new $61,400 limit on gifts to parties and other committees (which was just raised from $57,500).

In the meantime, national parties may now give $37,300 directly to Senate campaigns per six-year cycle — a six-and-a-half-percent increase from the $35,000 allowed previously.

The campaign watchdog agency also issued new limits on coordinated expenditures that party committee may make on behalf of their candidate running for general election.

The limit for House races in 2005 will be $38,300, with a separate limit applied to national and state and local party committees.

Parties can now spend up to a total of $76,600 on behalf of House candidates in general elections this year while coordinating those expenditures with the candidate.

The current limit on PAC contributions — PACs can raise and donate money in $5,000 chunks — remains untouched.

Though the sponsors of BCRA chose to double individual contribution limits and index them for inflation, PACs were left out of the equation altogether. Similarly, the law did not call for increases in the amounts that the national party committees directly donate to House candidates and presidential candidates. Those contributions are set at $5,000.

The next adjustment for inflation will occur in February 2007 — shortly before the 2008 presidential race heats up.

It doesn’t appear that candidates have had any trouble raising funds as it is, according to 2004 fundraising figures.

According to an FEC analysis of the financial activity in 2004, spending on presidential candidates and national conventions totaled more than $1 billion — a 56-percent increase over comparable activity during the 2000 campaign.

The FEC data shows that candidates in the primaries raised $673.9 million seeking the nomination. The campaigns of President Bush and Sen. John Kerry (D-Mass.) each received $74.6 million each in public funds to conduct their general election campaigns, and raised an additional $21 million for legal and accounting costs associated with the general election race.

For their nominating conventions, the two parties received $14.9 million each from the U.S. Treasury, while host committees from the two convention cities raised a total of $142.5 million in support of convention activities, the FEC reported.

FEC Chairman Scott Thomas praised the increases for inflation in a press release issued today.

“We’re particularly pleased that, with the help of the Department of Commerce and Labor, we were able to get these numbers out so quickly and so early in the election cycle,” he said.

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