Boosting the Individual Contribution Limit From $1,000 to $3,000 Would Put Federal Candidates in Pockets of Wealthy Individuals

February 7, 2001

Boosting the Individual Contribution Limit From $1,000 to $3,000 Would Put Federal Candidates in Pockets of Wealthy Individuals

Proportion of Contributions from Donors Giving At Least $1,000 Could Rise from 46 Percent to 63 Percent, Public Citizen Analysis Warns

WASHINGTON, D.C. Raising the limit on the amount of money individuals are permitted to contribute to congressional and presidential candidates would make them beholden primarily to the wealthy, according to a Public Citizen analysis of 1999-2000 campaign contributions.

The analysis focuses on the impact of a proposal likely to be presented during this year’s congressional debate on the McCain-Feingold-Cochran campaign finance reform bill, which would ban unlimited “soft money” contributions to political parties. The proposal calls for the current “hard money” limit on individual contributions to be raised from $1,000 to $3,000 per election.

In the 1999-2000 election cycle, nearly half — 46 percent — of individual contributions to federal candidates came from donors who gave at least $1,000. If the individual hard money limit were tripled, Public Citizen estimates this proportion would have risen to 63 percent — on the conservative assumption that half of the large donors would have tripled their giving and half would have remained the same. The amount of hard money received by all House, Senate and presidential candidates from $1,000+ donors would have doubled from $391 million to $782 million.

“Increasing this contribution limit is a terrible idea that would further corrupt our already corrupted system,” said Public Citizen President Joan Claybrook. “It would send a strong signal to large contributors that the price of access and influence has tripled, and they now must cough up more money to retain their status.”

Because donors may contribute to both primaries and general elections, increasing the contribution limit would allow one person to give $6,000 per election cycle and a couple to give $12,000. Moreover, fundraisers could assemble “bundles” of $3,000-$6,000 checks from employees of a company or lobbying firm.

Proponents of increasing the limit argue it is needed because of the rising cost of living and escalating campaign costs. But they are overlooking the fact that the limit was designed to prevent corruption and the appearance of corruption, Claybrook said. Last year, the U.S. Supreme Court upheld a $1,075 contribution limit for statewide races in Missouri on the grounds that state legislatures could determine that such limits were reasonable to combat corruption.

Public Citizen s analysis also found that:

  • Almost 232,000 people gave $1,000 or more to federal candidates in 1999-2000 just one-ninth of 1 percent of the voting-age population;
  • In 1999-2000, 47 percent of total individual contributions raised by Senate candidates came from donors who gave at least $1,000. If the contribution limit were raised to $3,000, the percentage would have risen to 64 percent — on the conservative assumption that half of the large donors would have tripled their giving and half would have given the same;
  • In 1999-2000, 38 percent of total individual contributions raised by House candidates came from donors who gave at least $1,000. If the contribution limit were raised to $3,000, this percentage would have risen to 55 percent;
  • In 1999-2000, 55 percent of total individual contributions raised by all presidential candidates came from donors who gave at least $1,000. At a $3,000 limit this percentage would have risen to 71 percent; and
  • The proposal to raise limits wouldn t clearly favor either of the two major political parties.

While soft money (those unlimited contributions from corporations, unions and wealthy individuals to political parties) is a huge problem in politics today, large hard money contributions are also of great concern on such issues as taxes and Social Security reform, the analysis noted. The current McCain-Feingold-Cochran bill banning soft money would have banned an estimated $500 million in national party soft money received in the 1999-2000 election cycle. But if the hard money contribution limit had been increased, it would have returned about $391 million of that, estimates show.

“We cannot overstate how greatly lawmakers in Congress are swayed by any kind of big money, whether it is hard or soft,” said Frank Clemente, director of Public Citizen s Congress Watch. “Tripling the hard money limit represents three steps back in the effort to stop the legalized bribery that goes on in Washington today. Boosting the contribution limit would undermine congressional reformers goal of cleaning up the system.”