Erin Ryan

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University of Colorado Law Review

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U. Colo. L. Rev.



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This article analyzes the Supreme Court’s new spending power doctrine and its impact on state-federal bargaining in programs of cooperative federalism, using the laboratory of environmental law. (It expands on the legal analysis in an Issue Brief originally published by the American Constitution Society on Oct. 1, 2013.) After the Supreme Court ruled in the highly charged Affordable Care Act case of 2012, National Federation of Independent Business vs. Sebelius, the political arena erupted in debate over the implications for the health reform initiative and, more generally, the reach of federal law. Analysts fixated on the decision’s dueling Commerce Clause theories, but an arguably more important element involved neither the commerce power nor the tax power directly, but its flip side: Congress’s authority to spend tax revenue to advance the general welfare. For even as one plurality concluded that the Act’s expanded Medicaid program was itself constitutional, a different plurality held that plans to condition a state’s continued receipt of Medicaid funds on assent to the new expansion would exceed federal authority under the Spending Clause. With that holding, Sebelius became the first Supreme Court decision since the New Deal to limit an act of Congress on spending power grounds, rounding out the “New Federalism” limits on federal power first initiated by the Rehnquist Court in the 1990s. The new Sebelius doctrine constrains the federal spending power in contexts involving changes to ongoing intergovernmental partnerships with very large federal grants. However, the decision gives little direction for evaluating when the amount of funding reaches the threshold of spending power coercion, or when changes to an existing program (like Medicaid) amount to an independent program vulnerable to the new doctrine (as Chief Justice Roberts characterized the Medicaid expansion). Sebelius thus leaves open important unanswered questions about the contours of the new spending power limit and how it will impact intergovernmental bargaining. This Article assesses the Sebelius doctrine by testing its application in a legal realm in which spending power bargaining features prominently: environmental law. Methodically applying the new limit to the major federal environmental programs of cooperative federalism, the analysis concludes that most (if not all) will withstand legal challenge — even a vulnerable provision of the Clean Air Act. The review sheds light not only on environmental law after Sebelius, but also the many other realms of American governance that engage spending power bargaining, such as public education, civil rights law, social service programs, and civic infrastructure. The Article concludes that the impacts of the doctrine will be most palpable not in litigation but in the dynamics of intergovernmental bargaining. States will have more leverage when negotiating design and enforcement terms within spending-power partnerships. However, the federal government may adapt by relying on spending power bargaining less often and with less at stake, even in contexts where states may prefer spending partnerships to the alternative.

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