Conditional Spending

Author:Thomas R. Mccoy, Barry Friedman

Page 485

The United States Constitution allocates legislative authority between a federal Congress and state governments. Congress may legislate or regulate only pursuant to specific powers expressly delegated in the Constitution; excepting IMPLIED POWERS, all powers not delegated to the national government are retained by the state governments. The power to spend money for the common defense or the GENERAL WELFARE, however, is a power separate from, and in addition to, all of Congress's other ENUMERATED POWERS. Thus, Congress may spend federal funds for any purpose that can be thought to contribute to the general welfare, even though none of Congress's enumerated powers encompasses the subject of the expenditure. Congress may not impose regulatory requirements, however, even though admittedly in the interest of the common defense and general welfare, unless the area regulated is one over which regulatory control is delegated to Congress.

The power to spend carries with it the power to attach certain conditions to the expenditure. Those conditions in effect specify how federal grants will be used. For example, if Congress grants the states funds to build highways, Congress has the concomitant power to specify where the highways should run or how they should be built. This power to impose conditions permits Congress to ensure that its money is actually spent as Congress intends.

The conditional spending problem is presented when Congress seeks to purchase, not the usual goods and services, but compliance with a legislative objective that normally would be pursued by a simple regulation backed by a regulatory penalty such as a fine. When Congress uses its spending power to offer a financial inducement?a reward?for conduct that it could not directly require or regulate under any of its other enumerated powers, the core constitutional conception of specifically delegated powers is threatened. The problem posed by conditional spending is the extent to which federally induced state reliance on federal moneys gives Congress effective regulatory authority over the states beyond the powers delegated to Congress in the Constitution.

The question is of central importance to the basic constitutional scheme of FEDERALISM. Over the course of the last several decades, the federal tax burden on individuals

Page 486

has increased substantially, making it increasingly difficult as a political matter for state legislatures to raise state taxes. At the same time that the federal tax burden has deterred states from raising their own revenue, national grant programs for general welfare purposes, such as highways, education, and health, have induced states to rely increasingly on national funds to finance state services. Substantial state reliance on the distribution of money raised by national taxation is now a fact of political life in the federal system. This financial dependence of the states on Congress's beneficence invites Congress to extract concessions from the states, to require the states to accept "conditions" in return for the revenues now under Congress's control. If there are no constitutional limitations on the conditions Congress can attach to federal grants, Congress may extract tax revenue from the citizens of the several states, pursuant to the taxing power, and then return that revenue to the states, under the spending power, on the condition that the states impose on themselves or their citizens some regulation that Congress constitutionally could not have imposed under its other enumerated powers.


To continue reading