PACs vs. Super PACs

So what exactly is a PAC? According to Michael Beckel of the Washington, D.C.-based Center for Responsive Politics, a non-profit and non-partisan organization that tracks money in politics, traditional PACs represent businesses, labor unions or ideological interests: examples would be the Microsoft PAC, the Teamsters PAC and the National Rifle Association PAC. "An organization's PAC will solicit money from the group's employees or members and make contributions in the name of the PAC to candidates and political parties," Beckel says.

PACS have been influencing elections and campaigns since they first appeared in the 1940s, but there are limits to what they can donate in campaign and party contributions. The amount of money PACs can give per election -- meaning a primary, general or special election -- is capped at $5,000 per candidate. Additionally, PACs can give no more than $15,000 each year to a national party.

And when it comes to actually raising the money they can use to contribute to candidates or political parties, PACs also face limitations: Individuals can give no more than $5,000 per year to a PAC [source: Beckel].

Citizens can contribute money directly to parties and candidates, as well, but those donations also have limits. Every calendar year, individuals can give a maximum of $30,800 to a national political party committee, such as the Republican National Committee, and the ceiling for individual contributions to a candidate is $2,500 per election [source: Center for Responsive Politics].

Things have changed though. Now the emergence of Super PACs has the potential to fundamentally alter the landscape of money in politics, and also represents a sharp departure from previous restrictions on financial contributions. That's because as of July 22, 2010, the FEC green-lighted Super PACs all but eliminating the previous financial donation limitations. Thanks to the FEC ruling, individuals, corporations and unions can now contribute unlimited cash to Super PACs, which essentially means there is no ceiling to how much money is injected into elections.

The main prohibition placed on Super PACs, aside from having to report their expenditures and contributors to the FEC, is that they cannot coordinate directly with the campaign staff of individual candidates. (Regular PACs have to abide by these same mandates as well) [source: Beckel]. There is another key difference. Super PACs can't contribute directly to candidates the way PACs do. The money Super PACs raise can only be used for such things as creating TV or radio ads supporting or excoriating particular candidates.

Read on to learn about the Supreme Court decision that made Super PACs possible.