Conditional Federal Spending and States' Rights

Abstract

With its 1995 decision in United States v. Lopez, the Rehnquist Court made clear that the commerce clause does not grant Congress a plenary police power. Prevailing spending clause doctrine, however, permits Congress to use conditional offers of federal funds in order to circumvent seemingly any restrictions the Constitution might be found to impose on its authority to regulate the states directly. This article first explores three normative arguments in favor of the Court's abandoning the existing test, set forth in South Dakota v. Dole, in favor of one that would better safeguard state autonomy while simultaneously preserving for Congress a power to spend that is greater than its power directly to regulate the states. It then proposes a new test under which the courts would presume invalid that subset of conditional offers of federal funds to the states that, if accepted, would regulate them in ways that Congress could not directly mandate. The presumption would be rebutted, and the offer of funds permitted, by a determination that the offer of funds constitutes "reimbursement" spending rather than "regulatory" spending.