Federal Election Comm'n v. Ted Cruz
The Supreme Court struck down a campaign finance law that limited how much of their personal campaign loans candidates could recoup using donations collected after election day, ruling the restriction burdened political speech without adequate justification.
The decision removes a longstanding cap that had deterred candidates — especially self-funded political newcomers — from lending large sums to their own campaigns, and it makes clear that the government must show concrete evidence of actual corruption risk, not just theoretical concern, before restricting campaign-related speech.
How it got here: A three-judge federal district court ruled for Cruz and struck down Section 304; the FEC appealed directly to the Supreme Court, which agreed to hear it.
The Case in Depth
What happened
Ted Cruz loaned $260,000 to his 2018 Senate reelection campaign. After winning, his campaign began repaying the loan but missed a narrow 20-day window that allowed repayment above $250,000. A federal law — Section 304 of the Bipartisan Campaign Reform Act — capped how much post-election money campaigns could use to repay candidate loans at $250,000, leaving $10,000 of Cruz's loan permanently unrecoverable. Cruz and his campaign committee sued, arguing the cap violated the First Amendment by discouraging candidates from loaning money to their own campaigns.
The question before the Court
Does a federal law capping the amount a winning candidate can recover from post-election donations to repay personal campaign loans at $250,000 violate the First Amendment?
The Court's answer
Yes — the Court struck down Section 304, ruling it unconstitutionally burdens candidates' political speech without sufficient justification. By capping post-election loan repayments at $250,000, the law increases the risk that large candidate loans will go unrepaid, which in turn deters candidates from making those loans in the first place. Data showed loans clustering at exactly the $250,000 threshold after the law took effect — direct evidence of a chilling effect on campaign funding.
The government's only permissible basis for restricting political speech is preventing quid pro quo corruption — an actual exchange of money for official acts. But the government could not point to a single documented instance of such corruption in this context. Its evidence (an academic study, a poll, and a handful of congressional floor statements) described only general "influence" and "access," which the Court has consistently held cannot justify speech restrictions. The argument that loan repayments are like "gifts" to candidates also failed, because winning candidates typically expect full repayment, so recovering a loan simply restores the candidate to where they started.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Federal candidates can now loan their campaigns any amount and face no legal ceiling on recovering those loans through post-election donations (up to the standard per-donor cap). This especially benefits self-funded challengers who rely on personal loans to launch campaigns. Donors who contribute to retiring a winning candidate's loan remain subject to the existing $2,900 per-election limit and disclosure rules.
What changes now
Section 304's repayment cap is now unenforceable. Cruz's campaign can seek repayment of the remaining $10,000 loan balance, and future federal candidates face no ceiling (beyond the standard $2,900 per-donor contribution limit) on using post-election donations to retire personal campaign loans. The FEC's implementing regulation, which depended entirely on Section 304 for its authority, also falls. The existing contribution caps and disclosure requirements for post-election donations remain fully in force.
What this does not decide
The Court expressly declined to decide which level of First Amendment scrutiny — strict or "closely drawn" — applies to campaign finance laws, since Section 304 failed under either. The ruling does not affect the standard $2,900 per-election contribution cap, public disclosure requirements for donations, or other provisions of campaign finance law.
Concurrences and dissents
Dissent — Justice Kagan
Justice Kagan argued the majority mischaracterizes what Section 304 actually restricts. Because the law regulates only third-party contributions — not the candidate's own spending — it imposes only a minimal First Amendment burden under the Court's own precedents. She also contended the majority badly underestimates the corruption risk: post-election donations that go straight into a winning candidate's pocket, made by donors who know he can now return favors with official acts, present exactly the quid pro quo danger Congress can constitutionally address. Real-world examples from states without similar laws showed the law was working as intended.
How the Court got there
The legal reasoning, step by step
- The Court first resolved whether Cruz and his campaign had legal standing — the right to bring this lawsuit at all. It rejected the government's argument that the injury was 'self-inflicted' because Cruz deliberately structured the loan to create a test case. The Court has never recognized an exception to standing's traceability requirement for intentionally incurred injuries; prior cases confirm that willingly subjecting oneself to an allegedly unlawful law still counts as a traceable harm.
- The government also argued that standing existed only to challenge the FEC's implementing regulation, not Section 304 of BCRA itself — a distinction that mattered for which court had authority to hear the case. The Court rejected this, reasoning that a regulation cannot exist independently of the statute that authorized it; if Section 304 is unconstitutional, its implementing rule falls with it, so the injury traces back to the statute.
- Turning to the First Amendment merits, the Court found that Section 304 clearly burdens political speech. By capping post-election repayments at $250,000, the law raises the risk that large loans won't be repaid — which deters candidates from making them. The deterrent effect was confirmed by data showing a tenfold increase in Senate candidates loaning exactly $250,000 (no more, no less) after the law took effect.
- Under the Court's campaign finance precedents — especially McCutcheon v. Federal Election Commission (2014) — the only permissible reason to restrict political speech is preventing quid pro quo corruption: a direct exchange of money for official acts. General donor 'influence' or 'access' to elected officials is not enough and cannot be regulated consistent with the First Amendment.
- The government offered three types of evidence to show a corruption risk: an academic article, a poll, and congressional floor statements. The Court found all three fell short. The study acknowledged it couldn't distinguish illicit quid pro quo arrangements from legitimate donor influence. The poll never defined 'political favor' and didn't account for existing contribution limits. The floor statements were 'stray' remarks, not formal legislative findings.
- The government's backup argument — that repaying loans is like giving a 'gift' to the candidate — also failed. Winning candidates typically expect full repayment, so loan recovery just restores the status quo, not a financial windfall. The Court also rejected a call for deference to Congress, noting the law appeared partly designed to protect incumbents from wealthy challengers — an impermissible purpose — not to stop corruption.
Doctrinal impact
Cases affected by this decision
Reaffirms McCutcheon v. Federal Election Comm'n (572 U. S. 185)
Reaffirmed that preventing quid pro quo corruption is the only permissible basis for restricting political speech.
Distinguishes Clapper v. Amnesty Int'l USA (568 U. S. 398)
Distinguished on standing: unlike Clapper, Cruz's injury was directly caused by the law he challenged, not manufactured independently.
Reaffirms Davis v. Federal Election Comm'n (554 U. S. 724)
Reaffirmed that laws penalizing candidates for robustly exercising the right to self-fund their campaigns are constitutionally suspect.