The limited success of the authors of the FECA, stemming from the ineffectiveness of its various provisions, mainly those referring to the public disclosure of financial documents from election campaigns, stimulated legislators to search for a quick revision of the document and insert necessary amendments. Such an approach was especially characteristic after the lack of pre-election disclosure of expenditures by President Richard Nixon in the 1972 campaign, when the public found out that the Republican candidate collected more than $11 million from various sources. Apart from the disclosure failure, even more decisive for congressional action was the outbreak of the Watergate scandal, which revealed the illegal activities of the Committee to Re-Elect the President, putting the whole problem of money and politics at the center of social concern.

The authors of the amendment opted for strengthening the disclosure system, furthering limits to campaign contributions and spending, and creating a comprehensive system of public funding for presidential elections, based on the earlier provisions of the 1971 laws. The most significant aspect of the 1974 legislation, however, was the creation of an independent administrative agency, the Federal Election Commission (FEC), which would be responsible for administering and enforcing campaign finance laws, including oversight of the presidential election public fund. Prior to this the system had lacked such an institution; this was one of the major reasons for its ineffectiveness. Therefore, the creation of the Commission was aimed at enhancing the disclosure procedures, implementing further regulations on campaign finance, and investigating alleged violations of the laws concerning campaign finance by both contributors and candidates. Another important innovation was a limit on so-called independent expenditures. These were all the expenses made on behalf of the candidates by the political parties or the outside groups without the coordination with them, their campaign committees or political parties. Before the new law took effect, however, it was challenged in court, leading to the milestone Supreme Court decision on the scope of campaign finance regulations, Buckley v. Valeo.