The 5-4 ruling does not address the issue of unregulated ``soft money,'' which became a much greater target of congressional figures such as Sen. John McCain, R-Ariz., while this case moved through the courts.
The ruling is certain to have a quick impact in the House, where a vote is expected next month on legislation to curtail the role of money in politics.
``Clearly this decision demonstrates that McCain-Feingold restrictions on campaign contributions are constitutional,'' McCain said. The ruling increases the odds that the legislation will become law this year, he said.
The legislation, which has already cleared the Senate, would abolish soft money, the unlimited donations that unions, corporations and individuals may give to political parties. The Supreme Court's ruling has no direct impact on soft money.
Reps. Christopher Shays, R-Conn., and Martin Meehan, D-Mass., lead sponsors of the legislation in the House, cheered the ruling.
``The court clearly takes contribution limits seriously as a way to prevent corruption,'' they said in a written statement. ``We are even more confident today the court will uphold a soft-money ban _ which, like coordinated party spending limits, protects the integrity of contribution limits.''
Senate opponents of the soft-money ban argued during debate this year that it was unconstitutional. They also argued - erroneously, as the court's 5-4 ruling showed - that the justices would strike down the limits in the Colorado case and end all limits on cash raised under federal law that parties can use for direct help to candidates.
Ruling in a 15-year-old case concerning spending by Republicans during a Colorado Senate race, the court preserved caps on what are known as coordinated expenditures.
The term describes a political party's spending done in concert with a particular campaign. Such party money, which does not count as a contribution to the candidate, usually goes for mass mailings and ads promoting an individual candidate.
Largely eclipsed by unregulated soft money, coordinated expenditures are used less often now than when the case began.
The ruling applies to party spending on House and Senate candidates, a category that totaled $427 million for Republicans and $265 million for Democrats in the 2000 elections.
The court's moderate- to liberal wing won over center-right Justice Sandra Day O'Connor to prevail. O'Connor's fellow swing voter, Justice Anthony M. Kennedy, joined Chief Justice William H. Rehnquist and fellow conservative Justices Antonin Scalia and Clarence Thomas in dissent.
The ruling was not in line with an earlier Supreme Court ruling on the same case. In 1996, the court used another part of the Colorado dispute to strike down limits on party money spent independently of the candidate's campaign.
The kind of spending at issue in Monday's case is different, because the money is spent with such a specific intent to help candidates, Justice David Souter wrote for the majority.
Unlimited party spending would undermine the purpose of campaign finance regulation, Souter wrote.
``We hold that a party's coordinated expenditures, unlike expenditures truly independent, may be restricted to minimize circumvention of contribution limits,'' Souter wrote.
Unlike soft money, the party spending must be reported to the Federal Election Commission.
The FEC wanted to keep the caps as a check on possible corruption. Government lawyers argued that candidates could be beholden to party bigwigs.
Colorado Republicans argued that it is absurd to think a party could corrupt its own candidate, and in any event the political parties, not the federal government, should decide how to spend party money.
The Supreme Court case arose out of a $15,000 radio ad the Republicans aired during the 1986 Senate race eventually won by Democrat Tim Wirth.
Democrats and the FEC claimed the ad exceeded the cap on what the party could spend on a candidate.
The cap on political party spending was passed as part of broad campaign money laws in 1974.
The FEC limits national and state parties to spending $33,780 apiece to help elect a House candidate. Senate limits are based on population and range from $67,560 for races in the smallest states to $1.6 million for California.
A federal appeals court struck down the spending limits, and the FEC appealed to the Supreme Court.
The case is Federal Election Commission v. Colorado Republican Federal Campaign Committee, 00-191.
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