Federal   Spending  Power

Justice O'Connor in New York v. United States 505 US 144 (1992) discussed methods by which Congress could "encourage" a State to regulate according to its wishes. Along with "cooperative federalism," Congress may employ the "spending power" to achieve its aims:

"...the Constitution authorizes Congress "to pay the Debts and provide for the . . . general Welfare of the United States." Art. I, 8, cl. 1. As conventional notions of the proper objects of government spending have changed over the years, so has the ability of Congress to "fix the terms on which it shall disburse federal money to the States..."

"...'Congress may attach conditions on the receipt of federal funds.' South Dakota v. Dole, 483 U. S., at 206. Such conditions must (among other requirements) bear some relationship to the purpose of the federal spending, id., at 207-208, and n. 3; otherwise, of course, the spending power could render academic the Constitution's other grants and limits of federal authority. Where the recipient of federal funds is a State, as is not unusual today, the conditions attached to the funds by Congress may influence a State's legislative choices. See Kaden, Politics, Money, and State Sovereignty: The Judicial Role, 79 Colum. L. Rev. 847, 874-881 (1979). Dole was one such case: The Court found no constitutional flaw in a federal statute directing the Secretary of Transportation to withhold federal highway funds from States failing to adopt Congress' choice of a minimum drinking age. Similar examples abound. See, e. g., Fullilove v. Klutznick, 448 U.S. 448, 478-480 (1980); Massachusetts v. United States, 435 U.S. 444, 461-462 (1978); Lau v. Nichols, 414 U.S. 563, 568-569 (1974); Oklahoma v. Civil Service Comm'n, 330 U.S. 127, 142-144 (1947)."

.."if a State's citizens view federal policy as sufficiently contrary to local interests, they may elect to decline a federal grant..."

In South Dakota v. Dole, 483 U.S. 203 (1987), Chief Justice Rehnquist outlined the limitations upon Congressional conditions imposed upon State receipt of funds under the federal "spending power":

"...The breadth of this power was made clear in United States v. Butler, 297 U.S. 1, 66 (1936), where the Court, resolving a longstanding debate over the scope of the Spending Clause, determined that "the power of Congress to authorize expenditure of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution." Thus, objectives not thought to be within Article I's "enumerated legislative fields," id., at 65, may nevertheless be attained through the use of the spending power and the conditional grant of federal funds.

"The spending power is of course not unlimited, Pennhurst State School and Hospital v. Halderman, 451 U.S. 1, 17, and n. 13 (1981), but is instead subject to several general restrictions articulated in our cases. The first of these limitations is derived from the language of the Constitution itself: the exercise of the spending power must be in pursuit of "the general welfare." See Helvering v. Davis, 301 U.S. 619, 640-641 (1937); United States v. Butler, supra, at 65. In considering whether a particular expenditure is intended to serve general public purposes, courts should defer substantially to the judgment of Congress. Helvering v. Davis, supra, at 640, 645. Second, we have required that if Congress desires to condition the States' receipt of federal funds, it "must do so unambiguously . . ., enabl[ing] the States to exercise their choice knowingly, cognizant of the consequences of their participation." Pennhurst State School and Hospital v. Halderman, supra, at 17. Third, our cases have suggested (without significant elaboration) that conditions on federal grants might be illegitimate if they are unrelated "to the federal interest in particular national projects or programs." Massachusetts v. United States, 435 U.S. 444, 461 (1978) (plurality opinion). See also Ivanhoe Irrigation Dist. v. McCracken, supra, at 295, ("[T]he Federal Government may establish and impose reasonable conditions relevant to federal interest in the project and to the over-all objectives thereof"). Finally, we have noted that other constitutional provisions may provide an independent bar to the conditional grant of federal funds. Lawrence County v. Lead-Deadwood School Dist., 469 U.S. 256, 269-270 (1985); Buckley v. Valeo, 424 U.S. 1, 91 (1976) (per curiam); King v. Smith, 392 U.S. 309, 333, n. 34 (1968)."

..."These cases establish that the "independent constitutional bar" limitation on the spending power is not, as petitioner suggests, a prohibition on the indirect achievement of objectives which Congress is not empowered to achieve directly. Instead, we think that the language in our earlier opinions stands for the unexceptionable proposition that the power may not be used to induce the States to engage in activities that would themselves be unconstitutional. Thus, for example, a grant of federal funds conditioned on invidiously discriminatory state action or the infliction of cruel and unusual punishment would be an illegitimate exercise of the Congress' broad spending power...."

[Note: An example of such a program is CZMA (Coastal Zone Management Act) or CZARA. (Coastal Zone Reauthorization Amendment of 1990.) As explained in Secretary of Interior v. California, 464 U.S. 312 (1984):

"CZMA was enacted in 1972 to encourage the prudent management and conservation of natural resources in the coastal zone. Congress found that the 'increasing and competing demands upon the lands and waters of our coastal zone' had 'resulted in the loss of living marine resources, wildlife, nutrient-rich areas, permanent and adverse changes to ecological systems, decreasing open space for public use, and shoreline erosion.' 16 U.S.C. 1451(c) (1982 ed.). Accordingly, Congress declared a national policy to protect the coastal zone, to encourage the States to develop coastal zone management programs, to promote cooperation between federal and state agencies engaged in programs affecting the coastal zone, and to encourage broad participation in the development of coastal zone management programs. 16 U.S.C. 1452 (1982 ed.).

"Through a system of grants and other incentives, CZMA encourages each coastal State to develop a coastal management plan. Further grants and other benefits are made available to a coastal State after its management plan receives federal approval from the Secretary of Commerce. To obtain such approval a state plan must adequately consider the 'national interest' and 'the views of Federal agencies principally affected by such program.' 16 U.S.C. 1455(c)(8), 1456(b) (1982 ed.)."]