Conditional Spending

Conditional Spending

Description

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 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. There are two competing views on the constitutionality of conditions attached by Congress to federal grants. The first view holds that offering a government benefit as a reward for compliance with some congressional objective is in effect identical to regulatory coercion by imposition of a fine to obtain the same end. Under this view, if achievement of an end is beyond Congress's delegated regulatory powers, it also should be constitutionally invalid when pursued through a conditional spending scheme. The second view is that the use of the spending power to offer a reward for compliance with some congressional objective is distinguishable from regulatory coercion in the form of a fine for noncompliance because the latter removes the freedom of choice while the former does not. According to this view, a state or individual confronted with the offer of a conditional grant may refuse the reward and persist in noncompliance, while one confronting a regulatory fine has no freedom of choice. Moreover, a fine takes money but a spending scheme awards it; refusing takes no money. Under this view, then, direct congressional regulation is confined to the enumerated powers, but Congress's purchase of compliance through a scheme of conditional spending is not similarly restrained.

Source Publication

Encyclopedia of the American Constitution

Source Editors/Authors

Leonard W. Levy, Kenneth L. Karst

Publication Date

2000

Edition

2

Volume Number

2

Conditional Spending

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