BCRA

The Bipartisan Campaign Reform Act of 2002 (BCRA) was enacted by the 107th Congress, 2nd Session and signed into law by President Bush on March 27, 2002 to amend the Federal Election Campaign Act of 1971 (now located at Title 52, Subtitle III of the U.S. Code) and other federal law. The BCRA is also known as the McCain-Feingold Campaign Finance Reform Act (after senators Russ Feingold and John McCain, two of the Act’s key sponsors) or the Campaign Finance Reform Act. The two primary campaign financing issues the Act addresses are:

• Restrictions on “soft money,” and
• Issue advocacy/advertising.

Background and Case Law

In 1971, Congress passed the Federal Election Campaign Act to more closely regulate federal elections. The law increased necessary disclosures of federal campaign contributions and created the Federal Elections Commission (FEC) to administer federal elections. Following the law's passage, the U.S. Supreme Court addressed the law's constitutionality in Buckley v. Valeo, 424 U.S. 1 (1976), a landmark decision concerning the interplay between campaign regulations and First Amendment rights. In Buckley, the Supreme Court ruled that the FEC could regulate and limit donations to campaigns but could not cap the amount of money that a political campaign could spend because doing so violates the First Amendment. Buckley also held that the FEC could not constitutionally regulate “soft money.” As a result, the FEC permitted political parties to spend unlimited amounts of “hard money” on certain activities, and “soft money” went unregulated by the FEC. 

“Hard money” is funding donated directly to a campaign or political party, whereas “soft money” is funding contributed to organizations, often known as “527s” (because they are tax exempt under 26 U.S.C. § 527), that advocate issues and indirectly advocate candidates, without specifically advocating for the election or defeat of a particular candidate. 

In 2002, Congress passed the BCRA, seeking to close the soft money loophole by putting an end to soft money contributions in federal elections. The BCRA amended the Federal Election Campaign Act (FECA), the Communications Act of 1934 (now located at 47 U.S.C. § 151 et seq.), and other provisions of the U.S. Code to prohibit federal candidates from using corporate and union funding to launch television ads on satellite or cable within 30 days of a primary and 60 days of a general election (also known as the “electioneering communication” provision in Section 441b of the BCRA, now located at 52 U.S.C. § 30118). Additionally, another provision prohibited candidates and political parties at both the national and state levels from spending soft money on federal elections.

Immediately after the President signed the law, members of Congress challenged the law's constitutionality under the First Amendment. In McConnell v. FEC, 540 U.S. 93 (2003), the Supreme Court initially upheld the Act's “electioneering communication” provision in Section 441b as facially constitutional, “insofar as it restricted speech that was the functional equivalent of express advocacy.” Then in 2007 the Supreme Court handed down a landmark decision in FEC v. Wisconsin Right to Life, Inc., 551 U.S. 449 (2007). As it applied to Wisconsin Right to Life, and speech that was not “express advocacy or its functional equivalent,” the Court struck down the “electioneering communication” provision in Section 441b of the BCRA because the provision restricted political speech and therefore violated the First Amendment rights of the organization.

The Supreme Court expounded on the BCRA's provision known as "the Millionaire's Amendment" in the 2008 case of Davis v. FEC, 554 U.S. 724 (2008). The Millionaire's Amendment only affected candidates who had spent in excess of $350,000 in personal funds on their own campaign. The BCRA permitted the opponents of these candidates to receive triple the amount of personal contributions typically allowed and also permitted the opponents to accept coordinated party contributions without limit. Yet the BCRA held self-financing candidates to the normal limit. Finding that the provision burdened free speech and associational rights, the Supreme Court struck down that provision as well.

In 2010, the Supreme Court handed down yet another landmark decision in Citizens United v. FEC, 558 U.S. 310 (2010). (For the more detailed Wex entry about the case, see Citizens United v. Federal Election Commission (2010).) In Citizens United, the Court held that the Free Speech Clause of the First Amendment prohibits the government from limiting independent expenditures on political campaigns by groups such as corporations and labor unions. As a result, the Court held Section 441b of the BCRA facially unconstitutional and overruled portions of McConnell. However, the Court upheld the BCRA’s disclaimer and disclosure provisions.

More recently, the Supreme Court addressed the constitutionality of yet another provision of the BCRA in FEC v. Ted Cruz for Senate, 596 U.S. 289 (2022). Section 304 of the BCRA (now located at 52 U.S.C. § 30116(j)), prohibits political campaigns from using more than $250,000 in post-election contributions to repay candidates for pre-election loans the candidates made to their campaigns. The Court held that Section 304 unconstitutionally burdens political speech because, in deterring candidates from making personal loans to their campaigns, it “raises a barrier to entry.”

Related Cases

• Buckley v. Valeo (1976)
• McConnell v. Federal Election Commission (2003)
• Federal Election Commission v. Wisconsin Right to Life (2007)
• Citizens United v. FEC (2010)
• McCutcheon v. Federal Election Commission (2014)
• FEC v. Ted Cruz for Senate (2022)

[Last updated in September of 2024 by the Wex Definitions Team]