Because it limits how the federal government can require states to do its bidding in exchange for taxpayer dollars, the Supreme Court’s recent healthcare ruling could have consequences for education policy.
The U.S. Supreme Court upheld the Patient Protection and Affordable Care Act’s individual health insurance mandate under Congress’ taxing power by a 5-4 ruling. By 7-2, the Court found its Medicaid expansion violates the U.S. Constitution by threatening states with the loss of their existing Medicaid funding if they choose not to comply.
“Congress may use its spending power to create incentives for states to act in accordance with federal policies,” wrote Chief Justice John Roberts Jr. in the majority opinion. “But when pressure turns into compulsion, the legislation runs contrary to our system of federalism.” In other words, he wrote, Congress cannot put “a gun to the [states’] head.”
In her dissent on the Medicaid expansion, Justice Ruth Bader Ginsburg said the ruling “for the first time ever finds an exercise of Congress’ spending power unconstitutionally coercive.”
The new “constitutionally coercive” standard has education policy wonks taking notice.
The Obama administration has made federal education funding in many programs conditional upon states adopting various policies. For states to be eligible for $4.35 billion in federal Race to the Top stimulus, they had to agree to adopt what are now national standards and tests. The president’s budget also proposes making federal Title I dollars for poorer schools contingent on states having adopted the standards, “a policy that, unlike Race to the Top, would make the standards anything but voluntary,” said Lindsey Burke, the Heritage Foundation’s education policy fellow.
No Child Left Behind, the largest federal education law adopted in 2001 with bipartisan support under President George W. Bush, also required states to adopt annual testing regimes in exchange for federal dollars.
“[The Medicaid ruling] promises to serve as a useful, overdue constraint on Congress’s ability to use bait-and-switch tactics to dictate ed policy to states,” said Rick Hess, American Enterprise Institute Education Policy Studies Director. “The big question, though, is how significant the Court’s ruling will prove in practice.”
Once federal funds enter states’ budgets, it’s hard for states to let them go, he explained.
The federal government can still make increased future funds conditional, but cannot threaten existing levels of federal funding, the ruling said.
“What if Congress decides to end-run this restriction by zeroing out one grant program and then immediately launch a new, similar program with the new conditions?” Hess asked. “Are policymakers then free to attach conditions to their hearts’ content? Such questions will only be answered in the fullness of time.”
University of Michigan law professor Samuel Bagenstos said he foresees future legal challenges to federal education spending based on the ruling, “particularly depending on what changes ultimately get made to No Child Left Behind and what kind of regulations get imposed on states for federal education funds.”
Education in Oral Arguments
During oral arguments on the healthcare law in March, Justice Samuel Alito likened the Obama administration’s arguments for the Medicaid expansion to a federal education tax.
“If [states] take it,” Alito hypothesized, “It’s going to have some conditions because we are going to set rules on teacher tenure, on collective bargaining, on curriculum, on textbooks, class size, school calendar, and many other things. So take it or leave it.”
States could say no, but their citizens would have to pay federal education taxes, plus come up with more state money to replace the federal dollars they declined, the justice added.
“Would that be the point where financial inducement turns into coercion?” Alito asked.
Image by Adam Fagen.