For attack ads, the bill enables its intended victim to purchase air time at the lowest possible rate to respond.
Government contractors, TARP beneficiaries and foreign nationals are prevented from contributing to campaign under the bill.
Rep. Chris Van Hollen (D-Md.) will introduce a similar bill in the House later today.
Schumer said the two bills are "very, very, very similar."
The bills are a legislative response to the Supreme Court's ruling on the Citizens United case.
The court decision removed some of the restrictions on campaign spending by corporations and unions, allowing them to spend unlimited funds on election activities to expressly advocate for or against a candidate's election.