Conditional Spending After NFIB v. Sebelius : The Example of Federal Education Law

In NFIB v. Sebelius, the Supreme Court's recent case addressing the constitutionality of the Affordable Care Act, the Court concluded that the Act's expansion of Medicaid was unconstitutionally coercive and therefore exceeded the scope of Congress's authority under the Spending Clause. This was the first time that the Court treated coercion as an issue of more than theoretical possibility under the Spending Clause. In the wake of the Court's decision, commentators have expressed either the concern or the hope that NFIB's coercion analysis may lead to the undoing of much of the federal regulatory state, which substantially relies on the spending power. This Article argues that both this concern and this hope are misplaced.Taking federal education law as a test case for future coercion analysis- since federal funding given to the states for elementary and secondary education is second only to federal funding given to the states for Medicaid- this Article concludes that NFIB's coercion inquiry is unlikely to lead to much else being found unconstitutional. The major federal education laws, and by implication other conditional spending laws, will not likely find their demise under the Court's analysis.Nonetheless, NFIB will likely have some effect on the future of federal education law and other laws that rely on Congress's spending powers. It should put a damper on calls to dramatically increase federal education funding; encourage the trend towards smaller grants of limited duration, especially those that bypass the states; result in some structural changes both in funding and enforcement; and, somewhat paradoxically for a decision that found the Medicaid enforcement regime coercive, may lead to greater federal enforcement of conditional spending laws.INTRODUCTIONThe sleeper issue in National Federation of Independent Business (NFIB) v. Sebelius,1 the Supreme Court's recent case considering the constitutionality of the Affordable Care Act, was the question of whether that Act's expansion of Medicaid violated the Spending Clause of the Constitution. It was a surprise that the Court agreed to hear this part of the case at all. While the lower courts had divided on the question of whether the Act's mandate that all individuals have health insurance exceeded the scope of Congress's authority under the Commerce Clause,2 the cases below had unanimously rejected the Spending Clause argument.3 Nor was there a circuit split on the extent of Congress's spending power.4 Commentators therefore surmised that at least one Justice was interested in examining, possibly narrowing, this power5-the last remaining congressional power that had survived, expansive and intact, through the Rehnquist Court's federalism revival.6As it happened, seven justices were apparently interested in revisiting Congress's spending power. A plurality of Chief Justice Roberts, joined by Justice Breyer and Justice Kagan,7 along with Justice Scalia, Justice Kennedy, Justice Thomas, and Justice Alito in a joint opinion with no identified author,8 concluded that the Medicaid expansion violated the Spending Clause by coercing the states into accepting its terms. As Justice Ginsburg, joined by Justice Sotomayor, noted in dissent on this point, this conclusion was of startling novelty.9 "[F]or the first time ever," Justice Ginsburg noted-italics hers-the Court "finds an exercise of Congress' spending power unconstitutionally coercive."10The Court's conclusion regarding the Spending Clause was largely lost in the initial hubbub over the Court's having upheld the individual mandate,11 but for those who noticed, the response was dramatic. From the left, scholars called the Court's ruling on the Medicaid expansion "a loaded gun" that should give "Americans who care about economic and social justice a reason to worry this Fourth of July";12 "a potential restructuring of federal-state relations" that could "come back in later cases to haunt the federal government";13 and "a really big deal" that "opens the door to challenging a bunch of very significant federal statutes that had not really been subject to effective challenge before. …