[Congressional Record Volume 147, Number 99 (Tuesday, July 17, 2001)]
[House]
[Pages H4103-H4104]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




CONGRESSIONAL BUDGET OFFICE COST ESTIMATE FOR H.R. 2356, THE BIPARTISAN 
                      CAMPAIGN REFORM ACT OF 2001

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Ohio (Mr. Ney) is recognized for 5 minutes.
  Mr. NEY. Mr. Speaker, House Rule XIII 3(c)(2) requires that a cost 
estimate prepared by the Congressional Budget Office be filed with a 
committee report. When the committee report for H.R. 2356 was filed, 
this cost estimate was not yet available.
  Attached for inclusion in the Record is the completed cost estimate.
                                                    U.S. Congress,


                                  Congressional Budget Office,

                                    Washington, DC, July 11, 2001.
     Hon. Robert W. Ney,
     Chairman, Committee on House Administration,
     House of Representatives, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for H.R. 2356, the 
     Bipartisan Campaign Reform Act of 2001.
       If you wish further details on this estimate, we will be 
     pleased to provide them. The CBO staff contacts are Mark 
     Grabowicz (for federal costs) and Paige Piper/Bach (for the 
     private-sector impact).
           Sincerely,
                                                Barry B. Anderson,
                                   (For Dan L. Crippen, Director).
       Enclosure.


               congressional budget office cost estimate

     H.R. 2356--Bipartisan Campaign Reform Act of 2001
       Summary: H.R. 2356 would make numerous amendments to the 
     Federal Election Campaign Act of 1971. In particular, the 
     bill would:
       Raise the amounts that individuals can contribute to 
     federal campaign each year;
       Prohibit national committees of political parties from 
     soliciting, receiving, directing, transferring, or spending 
     so-called ``soft money'';
       Require numerous additional filings and disclosures by 
     political committees with the Federal Election Commission 
     (FEC) for certain expenditures;
       Strengthen the prohibition on foreign contributions to 
     federal campaigns, and increase fines for violations of 
     election laws.
       Direct the General Accounting Office (GAO) to conduct a 
     study of recently publicly financed campaigns in Arizona and 
     Maine; and
       Restrict the advertising rates charged by television 
     broadcasters to candidates for public office.
       CBO estimates that implementing H.R. 2356 would cost about 
     $5 million in fiscal year 2002 and about $3 million a year 
     thereafter, subject to appropriation of the necessary funds. 
     Those amounts include administrative and compliance costs for 
     the FEC, as well as costs for GAO to prepare the required 
     report.
       Enacting the bill also could increase collections of fines, 
     but CBO estimates that any increase would not be significant. 
     Because the bill would affect direct spending and receipts, 
     pay-as-you-go procedures would apply.
       H.R. 2356 contains no intergovernmental mandates as defined 
     in the Unfunded Mandates Reform Act (UMRA) and would not 
     affect the budgets of state, local, or tribal governments.
       H.R. 2356 would impose several private-sector mandates as 
     defined in UMRA. CBO estimates that the direct costs to the 
     private sector of complying with those mandates would exceed 
     the annual statutory threshold in UMRA ($113 million in 2001, 
     adjusted annually for inflation) primarily as a result of new 
     mandates on national political party committees and 
     television, cable, and satellite broadcasters. Moreover, CBO 
     estimates that they net direct costs to the private sector 
     could exceed $300 million in a Presidential election year.
       Estimated cost to the Federal Government: The estimated 
     budgetary impact of H.R. 2356 is shown in the following 
     table. The costs of this legislation fall within budget 
     function 800 (general government).

----------------------------------------------------------------------------------------------------------------
                                                      By fiscal year, in millions of dollars--
                                   -----------------------------------------------------------------------------
                                        2001         2002         2003         2004         2005         2006
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION
 
Spending for FEC under current
 law:
    Estimated authorization                  40           42           43           45           47           48
     level\1\.....................
    Estimated outlays.............           41           42           43           45           47           48
Proposed changes:
    Estimated authorization level.            0            5            3            3            3            3
    Estimated outlays.............            0            5            3            3            3            3
Spending under H.R. 2356:
    Estimated authorization level.           40           47           46           48           50           51
    Estimated outlays.............           41           47           46           48           50           51
----------------------------------------------------------------------------------------------------------------
\1\ The 2001 level is the amount appropriated for that year. The estimated authorization levels for 2002 through
  2006 reflect CBO baseline estimates, assuming adjustments for anticipated inflation.

       Basis of Estimate: Based on information from the FEC, CBO 
     estimates that the agency would spend about $2 million in 
     fiscal year 2002 to reconfigure its information systems to 
     handle the increased workload from accepting and processing 
     more reports, to write new regulations implementing the 
     bill's provisions, and to print and mail information to 
     candidates and election committees about the new 
     requirements.
       In addition, the FEC would need to ensure compliance with 
     the bill's provisions and investigate possible violations. 
     CBO estimates that conducting those compliance activities 
     would cost $2 million to $3 million a year, mainly for 
     additional enforcement and litigation staff.
       CBO estimates it would cost GAO less than $500,000 in 
     fiscal year 2002 to complete the report required by the bill.
       Enacting H.R. 2356 could increase collections of fines for 
     violations of campaign finance law. CBO estimates that any 
     additional collections would not be significant. Civil fines 
     are classified as governmental receipts (revenues). Criminal 
     fines are recorded

[[Page H4104]]

     as receipts and deposited in the Crime victims Fund, then 
     later spent.
       Pay-as-you-go considerations: The Balanced Budget and 
     Emergency Deficit Control Act specifies pay-as-you-go 
     procedures for legislation affecting direct spending and 
     receipts. These procedures would apply to H.R. 2356 because 
     it would affect both direct spending and receipts, but CBO 
     estimates that the annual amount of such changes would not be 
     significant.
       Estimated impact on State, local, and tribal governments: 
     H.R. 2356 contains no intergovernmental mandates as defined 
     in UMRA and would not affect the budgets of state, local, or 
     tribal governments.
       Estimated impact on the private sector: H.R. 2356 would 
     make changes to federal campaign finance laws that govern 
     activities in elections for federal office. The bill would 
     amend the Federal Election Campaign Act of 1971 by revising 
     current-law restrictions on contributions and expenditures in 
     federal elections. H.R. 2356 would impose mandates on many 
     private-sector entities, including: national party 
     committees, state and local party committees, candidates 
     for federal office, federal officeholders, television, 
     cable and satellite broadcasters, persons who pay for 
     election-related communications, labor unions, 
     corporations, persons who contribute to political 
     campaigns for federal office, and Presidential inaugural 
     committees. The two most costly mandates in the bill would 
     prohibit the use of soft money by national political party 
     committees, and change the rules that television, cable 
     and satellite broadcasters apply to set rates for 
     political advertisements. At the same time, the bill would 
     reduce existing requirements governing election-related 
     contributions and expenditures.
       The mandate on national political party committees 
     prohibiting the use of soft money would impose direct costs 
     that equal the forgone amount of soft-money contributions 
     offset by savings in the bill. According to the FEC, national 
     party committees raised approximately $400 million in 2000, 
     $95 million in 1999, $150 million in 1998, and 475 million in 
     1997 in soft money. Historically, soft-money contributions 
     increase significantly in Presidential election years. During 
     the 2000 election cycle, for example, soft-money 
     contributions for national political parties totaled 
     approximately $495 million, which represented an increase in 
     soft-money contributions of 475 percent over the 1992 
     election cycle. CBO, therefore, estimate that the losses as a 
     result of prohibiting soft money would be at least $400 
     million in a presidential election year and at least $75 
     million in an other election years.
       H.R. 2356 also would provide savings as defined in UMRA. 
     The bill would reduce some existing mandates by allowing 
     higher contributions by individuals and thus offset some of 
     the losses resulting from the soft-money prohibition. The 
     bill would increase the following annual limits:
       Individual contributions to Senatorial and Presidential 
     candidates from $1,000 to $2,000,
       Individual contributions to national political parties from 
     $20,000 to $25,000,
       Individual contributions to state parties from $5,000 to 
     $10,000,
       Aggregate limit on all individual contributions from 
     $25,000 to $37,500, and
       National party committee contributions to Senatorial 
     candidates from $17,500 to $35,000 in an election year.
       Further, the bill would provide for future indexing for 
     inflation of certain limitations on annual contributions. The 
     bill would also raise limits on individual and party support 
     for Senate candidates whose opponents exceed designated level 
     of personal campaign funding.
       The increased contributions limits would allow candidates 
     and national and state party committees to accept larger 
     campaign contributions. Based on information from the FEC and 
     other experts, CBO expects that the increment in such 
     contributions could be as much as $200 million in a 
     Presidential election year. Thus, such savings would only 
     partially offset the losses from the ban on soft-money 
     contributions.
       Additional mandates in H.R. 2356 would impose costs on 
     television, cable, and satellite broadcasters by requiring 
     the lowest unit rate broadcast time to be nonpreemptible for 
     candidates (with rates based on comparison to prior 180 days) 
     and requiring the rates to be available to national party 
     committees. The bill also would also require broadcasters to 
     maintain records of requests of broadcast time purchases. 
     Based on the latest figures from the National Association of 
     Broadcasters and the FCC, affected political advertising 
     would bring in revenues of $400 million to $500 million in 
     Presidential election years and $200 million to $250 million 
     in other election years. CBO does not have enough information 
     to accurately estimate the effects of the requirements in the 
     bill on those revenues. Based on information from industry 
     experts, however, CBO concludes that such losses could exceed 
     $100 million in a Presidential election year.
       H.R. 2356 would also impose private-sector mandates in 
     several additional areas. These areas include: restricting 
     the use of soft money by candidates and state political 
     parties; additional requirements to report information to the 
     FEC about political contributions and expenditures by 
     individuals and political parties; restricting contributions 
     from minors and foreign nationals; restricting disbursements 
     for election-related communications by individuals, labor 
     unions, corporations, and political parties; and prohibiting 
     certain campaign fundraising.
       The direct costs associated with additional reporting 
     requirements would not be significant. In general, most 
     entities involved in federal elections must submit reports to 
     the FEC under current law. New requirements in H.R. 2356 also 
     would impose some costs for individuals and organizations who 
     pay for certain election-related communications associated 
     directly and indirectly with federal elections. Finally, 
     mandates that restrict the ability of individuals and 
     organizations to make certain contributions or expenditures 
     would impose additional administrative costs.
       Previous estimate: On July 9, 2001, CBO transmitted a cost 
     estimate for H.R. 2360, the Campaign Finance Reform and 
     Grassroots Citizen Participation Act of 2001, as ordered 
     reported by the Committee on House Administration on June 28, 
     2001. That bill contained some of the provisions in H.R. 2356 
     and CBO estimated that it would cost the federal 
     government $2 million annually, subject to the 
     availability of appropriated funds. Neither bill contains 
     intergovernmental mandates.
       Both bills would impose private-sector mandates by placing 
     new restrictions on contributions and expenditures related to 
     federal elections. The mandates in H.R. 2360 would not impose 
     costs above the statutory threshold. The primary mandate in 
     H.R. 2360 would limit the use of soft-money contributions in 
     certain federal election activities. The primary mandates in 
     H.R. 2356 would impose costs above the threshold by banning 
     the use of soft money for national committees and changing 
     the rules that apply to broadcast rates for political 
     advertisements.
       Estimates prepared by: Federal costs: Mark Grabowicz, 
     impact on State, local and tribal governments: Susan Seig 
     Thompkins; impact on the private sector: Paige Piper/Bach.
       Estimate approved by: Peter H. Fontaine, Deputy Assistant 
     Director for Budget Analysis.

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