Corporations and unions would have to identify themselves on political ads they bankroll, and the CEO or top official would have to make "I approve this message" statements under legislation being introduced in Congress Wednesday.
The measures being introduced in both the House and Senate are a direct response to a 5-4 ruling by the Supreme Court in January that upheld the First Amendment rights of such groups to spend money on campaign ads. The decision greatly enhances their ability to influence federal elections.
"I welcome the introduction of this strong bipartisan legislation to control the flood of special interest money into America
"Powerful special interests and their lobbyists should not be able to drown out the voices of the American people," he said. "Yet they work ceaselessly toward that goal: they claim the protection of the Constitution in extending this power, and they exploit every loophole in the law to escape limits on their activities."
Senate Democrats, including Charles Schumer of New York and campaign finance legislation veteran Russ Feingold of Wisconsin, are appearing on the steps of the Supreme Court to outline how they plan to counteract a court ruling they say overturned more than a century of established law. They complain that it dangerously tilted the power balance away from individual candidates and voters and in the direction of deep-pocketed corporations and unions.
A House group led by Rep. Chris Van Hollen of Maryland, a member of the Democratic leadership, and several Republicans, will hold a similar news conference later in the day.
The proposed bill would also bar foreign-controlled corporations and government contractors from spending money on elections, and prohibit political spending by companies that received government bailout money.
The top financier of an ad would be required to record a stand-by-your-ad disclaimer message to prevent organizations from funneling money through shell groups to hide their identity. Corporations and unions must also disclose campaign-related spending on their websites and report that spending to shareholders and members.
Obama, who criticized the decision as members of the court sat in the House for his State of the Union address, said in Thursday's statement that the legislation "would establish the toughest-ever disclosure requirements for election-related spending by big oil corporations, Wall Street and other special interests."
The lawmakers say their goal is to have the legislation enacted by July 4, in time for it to be put into effect before the November election.
"We expect a major battle," said Fred Wertheimer, president of the campaign finance watchdog group Democracy 21.
The U.S. Chamber of Commerce has said it will "fight any and all attempts to muzzle and or demonize independent voices from the election discussion," and the Republican leader of the Senate, Mitch McConnell of Kentucky, has long been a fierce opponent of putting limits on campaign spending.
But Wertheimer said the Supreme Court was clear that laws requiring greater disclosure are constitutional. "We think we have a powerful case," he said.