By Thomas Ferraro

WASHINGTON (Reuters) - Congress returns next week from its President's Day recess, ready to take on a campaign financing bill that has bedeviled legislators for years but now may actually become law.

The legislation to ban unlimited donations to national political parties along with a second bill to overhaul much of the nation's election system could drastically change the face of American politics.

Sen. Mitch McConnell, a Kentucky Republican, will be a leading force on both measures -- pushing for defeat of the first and enactment of the second. Each has strong public support a good chance of becoming law.

"They are completely different issues -- and very important ones," said McConnell.

McConnell cites the Constitution in support of the election-reform bill, which he says will help protect the right to vote. He helped craft the bipartisan measure in an effort to avoid a repeat of the disputed 2000 White House election. The measure would upgrade voting equipment and registration and implement new national election standards.

But McConnell also invokes the Constitution in arguing against the campaign finance measure, which would ban unlimited "soft money" donations to national political parties as well as restrict broadcast ads shortly before an election.

SEES FREE SPEECH VIOLATIONS

McConnell argues that measure would violate freedom of speech. Supporters say it would restrict the impact of large amounts of money that overwhelm the electoral system.

"Sen. McConnell is a very effective senator -- one I would not want to be on the other side from," said Ed Gillespie, a Republican political consultant.

"But I think campaign finance reform will become law, along with some form of election reform," Gillespie said. "That's been the drumbeat and it has drowned out everything else."

The campaign financing bill has had a rocky history. A bill was passed several times by the House when it was clear the Senate would block passage. But after the Senate passed legislation last year, the bill stalled in the House until earlier this month when its supporters finally got it through on a close floor vote.

The bill moved a big step forward this week when Sen. Gordon Smith, an Oregon Republican, announced he was "strongly inclined" to oppose a possible procedural stall. Smith could be the needed 60th vote in the 100-member Senate to end debate and move to final passage.

His spokesman, Joe Sheffo, said Smith worried the bill restricted the First Amendment right to free speech and intends to vote against it.

"But he believes there should be a fair and open debate and vote," Sheffo said.

The Senate is expected to approve the election reform bill next week. It will work to reconcile differences with a similar House-passed measure before sending a final bill to President Bush to sign into law.

In addition to election and campaign finance reform, Congress will face a number of other measures when its returns from its weeklong President's Day recess.

ENERGY BILL COMES UP

On a matter that helps define Republicans and Democrats this congressional election year, the Senate will resume consideration of legislation to implement a sweeping energy policy designed to make the nation more energy independent, which took on new importance after the Sept. 11 attacks.

Republicans want to open the Arctic National Wildlife Refuge to oil drilling while Democrats favor promoting renewable energy sources and conservation.

It is an open question if they can craft a bipartisan bill that could be sent to Bush to sign into law.

Same is true of an embattled measure set to finally come before the Republican-led House next week. It would allow local telephone giants to offer long-distance data services without first opening its networks to rivals.

Next week, Charles Pickering, now a U.S. district judge in Mississippi, may become the first Bush judicial nominee to be rejected by the Democratic-led Senate Judiciary Committee.

The panel tentatively plans to vote on Thursday on Pickering, whose record on civil rights and abortion rights have come under heavy fire from liberal groups and lawmakers.

Pickering's backers note he had enough courage of conviction to oppose the Ku Klux Klan in the 1960s and argue he should be confirmed to the 5th U.S. Circuit Court of Appeals.

Congress's return means resumption of hearings into the collapse of Enron Corp., the one-time energy giant that went down as executives cashed out and workers lost life savings.

The scandal gave a birth to efforts to tighten regulatory enforcement and retirement security. But those reforms are not expected to be enacted until after Congress's Easter's break.