At Slate, Matt Yglesias writes:
Here’s something I was thinking about over the weekend. The Supreme Court’s decision that the federal government can’t threaten to cut off existing Medicaid payments to states that decline to expand their Medicaid programs is clearly conservative in its immediate result. This is going to encourage states to decline Medicaid expansion, and thus limit the scope of overall transfer payments to poor people. But is there anything conservative about the general principle?
Indeed, one element of Mitt Romney’s education plan (PDF) is to “require states to adopt open-enrollment policies for students receiving Title I and IDEA funds, and to eliminate caps on charter and digital schools.” That seems like a good idea to me, but it seems like a consistent application of the new spending power principles would render it unconstitutional. The Romney administration wouldn’t be allowed to coerce states into changing their charter-school laws by threatening their existing Title I and IDEA money; they’d have to rely on a carrot strategy as the Obama administration did with its Race to the Top grants.
First of all, Matt is terribly over-reading Roberts’ Medicaid decision. The Court did not hold that the federal government is forever forbidden from influencing state behavior by threatening existing funding. The holding is much more narrow than that. From Roberts opinion:
In South Dakota v. Dole, we considered a challenge to a federal law that threatened to withhold five percent of a State’s federal highway funds if the State did not raise its drinking age to 21. … We accordingly asked whether “the financial inducement offered by Congress” was “so coercive as to pass the point at which ‘pressure turns into compulsion.’” Id., at 211 (quoting Steward Machine, supra, at 590). By “financial inducement” the Court meant the threat of losing five percent of highway funds; no new money was offered to the States to raise their drinking ages. We found that the inducement was not impermissibly coercive, because Congress was offering only “relatively mild encouragement to the States.”
In fact, the federal funds at stake constituted less than half of one percent of South Dakota’s budget at the time. … Medicaid spending accounts for over 20 percent of the average State’s total budget, with federal funds covering 50 to 83 percent of those costs. … It is easy to see how the Dole Court could conclude that the threatened loss of less than half of one percent of South Dakota’s budget left that State with a “prerogative” to reject Congress’s desired policy, “not merely in theory but in fact.”
The threatened loss of over 10 percent of a State’s overall budget, in contrast, is economic dragooning that leaves the States with no real option but to acquiesce in the Medicaid expansion.
The relevant question is not new/old spending, but how much the federal government is spending. Roberts has ruled that Medicaid ($258 billion spent in 2012) crosses that line, but highway spending ($44 billion in 2012) does not. Title I and IDEA Funds ($37 billion in 2012) almost assuredly would not pass the new Roberts test. In fact, it is hard to think of a program other than Medicaid that would.
Yglesias has, however, stumbled on to a division between conservatives and Romney on the role of the federal government in education. After Romney released his plan earlier this year, The Heritage Foundation’s Lindsey Burke wrote:
Yes, school choice, digital learning, and charters are imperative to improving America’s education system. But the federal government should not be dictating what states must do in terms of education policy. Let’s not fall into the trap of becoming conservative technocrats — placing mandates on states to implement certain policies with which we agree. That’s the mistake some conservatives made with No Child Left Behind.
How this disagreement would play out in a Romney administration would not be pretty.