Reclaiming the Constitution: One State at a Time!

(Part 9 final in Series) Reclaiming the Constitution: One State at a Time

The practice of conditioning federal grants to the States on “compliance” with federal policy priorities is among the most insidious and dangerous practices to have developed over the past sixty years. Moreover, the federal stimulus bill in 2009 dramatically increased the federal share of state budgets, and imposed a myriad of requirements on the disbursement of funds. The practice of taxing citizens and returning the money to their States only on condition of state compliance with federal wishes subverts the structure of federalism by coercing States to give up their autonomy, and ignore the will of their citizens, under threat of an increasingly unbearable fiscal and economic penalty. Whether by interstate compact or federal legislation or constitutional amendment, the practice of conditional federal subsidies to state budgets has to be reined in if the States’ sovereign status within our Constitution’s framework is to be restored.


In the current Texas budget, federal funds make up 36 percent of all the funds in the budget, a dramatic increase over the 30 percent federal share in the previous state budget. More than half of this sum is devoted to health and human services, subject to a host of restrictions and regulations. Another 24 percent is devoted to education, again with a host of onerous restrictions and mandates, many of them unfunded mandates. Another 16 percent is devoted to business and economic development, again with strings attached. In all of these areas, the federal conditions and mandates are incrementally approaching a nationalization of state policy in the areas affected—health & human services, education, and economic development—areas that the Framers expressly intended to leave to the States.


This series of columns has tried to highlight major issues and problem areas at the vanishing boundary between the federal government’s domain and that of the States and individuals. There are some ways, however, that the State of Texas and other states can begin promptly redressing the intolerable imbalance of power that now exists, vis-à-vis the federal government:


Interstate Compact for Health Care Reform. Interstate compacts are an effective way to regulate areas of mutual concern among two or more States. In areas of overlapping state and federal jurisdiction, or where state legislation is preempted by an enumerated federal power, the Constitution requires congressional consent (Art. I, sec. 10). The Supreme Court has held that such congressional consent trumps prior federal law and may even subordinate federal agencies to agencies created by the interstate compact. Although Congress has generally consented to interstate compacts through regular legislation signed by the President, congressional consent does not necessarily require presidential signature; the Supreme Court has suggested that congressional consent may even be inferred from acquiescence. Interstate compacts have enormous unexplored potential as a way of shielding areas of traditional state authority from the concentration of power in Washington. We ought therefore to consider an interstate compact to create an alternative state-based regulation of health care.


The compact would provide that member States are free to choose their preferred model for healthcare policy; that they may opt out of Obamacare entirely; that they may choose to receive federal Medicaid funds as block grants without strings attached; and would otherwise accommodate maximum state flexibility. The compact could create a regional commission to allow the sharing of certain risks that require a larger pool than a single State to reach efficient scale. The compact would contain a “notwithstanding” clause providing that the operation of any federal law contrary to the provisions of the compact is suspended as to the signatory States. Congressional consent would be sought, and once obtained, would transform the compact into federal law.


Constitutional Amendment to Balance the Budget. Constitutional amendments aimed at controlling taxing and spending would respond to one of the issues that Americans today worry about most: runaway federal spending. Congress itself can propose the amendment, or States can petition Congress to call a constitutional convention under Article V. The call of the States could be limited to proposing amendments that will rein in the spending and taxing powers of the federal government. Amendments could include: a balanced-budget amendment, a line item veto, and the requirement of a super-majority to raise taxes.


Opting out of Federal Programs and Federal Funds. The problem of federal funding with conditions and mandates attached, is an increasingly serious threat to the constitutional balance of federalism. It is a problem that States must address in a concerted manner. States need to consider reciprocal legislation or an interstate compact, providing that in state budgets none of them will accept federal funds with mandates and conditions attached (but accommodating federal funds in the form of block grants for a specified purpose). The laws could be triggered to go into effect once a certain number of States have adopted them. This would alter the politics of federal appropriations significantly, and focus more attention on the way in which taxes paid into general federal revenue are diverted to States other than their States of origin, creating enormous economic penalties for those States that refuse to comply with federal policies that they are under no legal obligation to obey.


Federal Lawsuits. States have been fighting back against the federal government by suing in federal court. More than half the States have sued the federal government to escape the impositions of Obamacare. Texas has filed at least eight separate federal actions seeking relief from various Obama administration environmental actions. More States should join in existing lawsuits, and state legislatures can adopt laws requiring their attorney general to file suit in defense of specific rights. State legislation can help strengthen the state’s ability to use the federal courts. One way is to pass a law that requires the state attorney general to file suits when an independent commission determines that, e.g., state constitutional provisions are being violated by some federal action. Another is to pass a law providing that, e.g., individuals do not have to comply with the individual mandate in Obamacare. On its face, such a law is null and void under the Supremacy Clause of the Constitution—unless Obamacare is itself unconstitutional. In this way, the state’s attorney general will be able to establish standing to challenge the constitutionality of the federal statute in federal court.


Federal Legislation. Our representatives in Congress can have an important role in stopping federal overreach. A simple amendment to the Administrative Procedures Act could establish that the Supremacy Clause of the Constitution (Article VI) shall not apply to regulatory action, and that in cases of conflict between an administrative agency rulemaking and state law, state law prevails. Federal laws could modify entitlement programs to allow States to opt into “block grant” arrangements, either singly, or through interstate compacts. Other federal laws could modify canons of construction and rules of decision for federal courts, instructing them to construe statutory ambiguities in favor of Tenth Amendment rights, thereby establishing a legal presumption against federal power.


In conclusion, the steady expansion of the federal government since the early 20th century has arrived at a crisis point. The federal government is pushing further and further into areas of traditional state governance—and intruding deeper into our lives. The threat to liberty that Madison thought States would be strong enough to resist has now become apparent to millions of Americans. The federal courts are a necessary instrument of the solution, but the vital solution lies in self-governance itself, what John Locke might have called a “government properly so-called.” We the People have a responsibility to engage and understand the issues that affect the fate of our democratic republic. By elevating our understanding of the need to preserve the authority of the States, and ultimately the sovereignty of the people—the most contentious and important agreement reached at the Constitutional Convention in Philadelphia more than two centuries ago—we can continue to forge a more perfect Union. (See Parts 1-8 at link)