ASHINGTON - While reformers are seeking new limits on campaign spending, the Supreme Court announced yesterday that it will consider striking down the 26-year-old limit on how much political parties spend to promote their candidates.
At issue is a rather obscure Watergate-era rule that puts a cap on how national and state parties use money that has been raised legally in donations of less than $5,000.
Critics of the limit say it no longer makes sense.
In the 1976 case of Buckley v. Valeo, the Supreme Court threw out most campaign spending limits. That case upheld limits on contributions to candidates, however. At that time, the limits on party spending went unchallenged.
Meanwhile, GOP lawyers have gone to court insisting that the outdated party spending rules should be dismissed on free-speech grounds. Four years ago, the court overturned limits on party spending that was independent of the candidates. The new case tests whether limits on spending that is coordinated with the candidates should also be abolished.
The case grew out of the 1986 Senate race in Colorado, during which the state Republican Party bought radio ads attacking Democratic candidate Tim Wirth. The FEC sued, arguing that the expenditure on these ads exceeded the legal limits.
For the past 14 years, Colorado Republicans have contended that the limits violate the First Amendment's guarantee of free political speech, noting that it is illogical to suppose that support from a candidates' own party could corrupt him or her.
''This is about spending good, clean money. And the limits directly impinge on the speech of political parties,'' said Washington lawyer Jan W. Baran, who represented the Colorado Republican Party in challenging the rules.
In 1996, a divided Supreme Court held that any limits on party expenditures that were not coordinated with candidates would be unconstitutional, but it sent the issue of coordinated expenditures back to lower courts.
This year, a Denver-based federal appeals court agreed with the Colorado GOP and, in a political season during which Democratic candidates are trying to attract swing voters by making campaign finance a signature issue, the Clinton administration appealed to the Supreme Court.
In its appeal, the Federal Election Commission argued that parties should not have too much financial power over their candidates. ''A federal elected official should not be unduly beholden to a single source of financial support,'' the FEC said.
The Colorado case addresses only expenditures of ''hard money,'' the cash parties raise under rules that limit individual contributions and require public disclosure of donors. For the 2000 race, the limits are $13.7 million for the presidential nominees, about $67,000 for House races and between $135,000 and $3.3 million for Senate races, depending on state population.
The case does not involve the ''soft money'' loophole that allows parties to raise unlimited quantities of money from individuals, corporations and labor unions and spend it freely on ''party-building'' activities - but not on direct support for candidates. As this distinction has collapsed in practice, the importance of soft money in the parties' plans has grown in comparison to that of hard money.
Nevertheless, the Colorado case is important. It will provide the first definitive holding by the Supreme Court on whether political parties enjoy a different constitutional status than individuals, corporations and political action committees. The Supreme Court's view in this case also could shape the debate over soft money.
''If the court finds that parties and candidates are so closely intertwined, that only strengthens the argument that we need regulation of all contributions to parties,'' including soft money, said Nancy Northup, director of the Democracy Program at the Brennan Center for Justice at New York University Law School.
The White House's case against the Colorado Republicans hinges largely on the assertion that removing the limits on coordinated expenditures of hard money would magnify the role and influence of soft money and soft-money donors by giving party leaders and financiers the prospect of unlimited hard-money support.
The Colorado Republicans' attorney, Jan Baran, counters that a victory for his client would actually help clean up the system by increasing the importance of hard money vis-a-vis soft money.
Material from the Washington Post was used in this report.
