Also known as:spending powers · congressional spending power · spending clause
Written by attorneys — see sources below.
A constitutional power granted to Congress under Article I Section 8 to lay and collect taxes to pay the debts and provide for the common defense and general welfare of the United States.
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How its tested
Common Examples
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Highway Funds Tied to Drinking Age
Sofia Stern's home state receives federal highway construction grants only after it raises the minimum drinking age to twenty-one. The state legislature enacts the change to keep the money flowing. Without the funds the state would have delayed several road projects for years.
Conditional Grants After Legislative Veto
Sarah Sullivan's state accepts federal education grants that require compliance with a federal reporting rule. Congress later attempts to override an agency waiver through a one-house resolution. The state continues to receive the funds because the resolution cannot alter the spending conditions.
Immigration & Naturalization Service v. Jagdish Rai Chadha462 U.S. 919, 954 n. 16, 103 S.Ct. 2764, 2785 n. 16, 77 L.Ed.2d 317
In 1966 Jagdish Rai Chadha, an East Indian born in Kenya who held a British passport, was lawfully admitted to the United States on a nonimmigrant student visa that expired on June 30, 1972. In October 1973, the District Director of the Immigration and Naturalization Service informed Chadha that he had remained longer than permitted and was therefore deportable. Chadha conceded deportability but applied for suspension under section 244(a)(1) of the Immigration and Nationality Act of 1952.
On June 25, 1974, an Immigration Judge acting on behalf of the Attorney General suspended Chadha's deportation and adjusted his status to permanent resident after finding that he satisfied the statutory criteria of seven years' continuous presence, good moral character, and extreme hardship. A report of the suspension was transmitted to Congress as required by the Act.
On December 16, 1975, the House of Representatives passed a resolution disapproving the suspension for Chadha and five other aliens on the ground that they did not meet the statutory requirements, particularly as to hardship.
Pursuant to the House resolution, the Immigration Judge reopened the deportation proceedings. Chadha moved to terminate them on constitutional grounds, but the Immigration Judge ruled that he lacked authority to declare the resolution unconstitutional and ordered Chadha deported. Chadha appealed to the Board of Immigration Appeals, which likewise held that it had no authority to pass on the constitutionality of the resolution and dismissed the appeal.
Chadha then filed a petition for review in the United States Court of Appeals for the Ninth Circuit. The Immigration and Naturalization Service appeared and urged the court to hold the House resolution unconstitutional. After inviting briefs from the Senate and House as amici curiae, the Court of Appeals held the resolution unconstitutional because it was a legislative act that failed to satisfy the requirements of Article I, sections 1 and 7, and set aside the deportation order.
The Supreme Court granted certiorari in the consolidated cases to address the constitutional question.
Scott Summers manages a city transit system that receives federal operating subsidies. The subsidies require the city to follow federal wage and hour rules for its employees. The city adopts the rules to avoid losing the annual allocation.
Garcia v. San Antonio Metropolitan Transit Authority469 U.S. 528 (1985)
The history of public transportation in San Antonio began with private operators. In 1959 the City of San Antonio purchased the privately owned San Antonio Transit Company and replaced it with the publicly owned San Antonio Transit System.
In 1978 the city transferred its facilities and equipment to appellee San Antonio Metropolitan Transit Authority, a public mass-transit authority organized on a countywide basis. SAMTA became the major provider of transportation in the San Antonio metropolitan area. Between 1978 and 1980 its vehicles traveled over 26 million route miles and carried over 63 million passengers.
San Antonio began receiving federal subsidies under the Urban Mass Transportation Act of 1964. SATS and SAMTA received over $51 million in UMTA grants from December 1970 through February 1980. This total included $12.5 million in operating grants during SAMTA's first two fiscal years.
The Fair Labor Standards Act was enacted in 1938 without applying to local mass-transit employees. Congress amended the statute in 1961 to extend minimum-wage coverage to private mass-transit carriers with annual gross revenue of at least $1 million. In 1966 Congress withdrew exemptions from public hospitals, schools, and mass-transit carriers whose rates and services were subject to state regulation. The 1974 amendments provided for the progressive repeal of the surviving overtime exemption for mass-transit employees while extending FLSA coverage to virtually all state and local government employees.
Following the 1976 decision in National League of Cities v. Usery, SATS informed its employees that the decision relieved it of overtime obligations under the FLSA. On September 17, 1979, the Wage and Hour Administration of the Department of Labor issued an opinion that SAMTA's operations were not constitutionally immune from the FLSA. On November 21, 1979, SAMTA filed suit against the Secretary of Labor in the United States District Court for the Western District of Texas seeking declaratory relief. On the same day appellant Garcia and other SAMTA employees sued SAMTA in the same court for overtime pay under the FLSA.
On November 17, 1981, the District Court granted SAMTA's motion for summary judgment. The court held that local public mass-transit systems constitute integral operations in areas of traditional governmental functions. After the Supreme Court decided Transportation Union v. Long Island R. Co. in 1982, the District Court's judgment was vacated and remanded. On remand the District Court adhered to its original view and again entered judgment for SAMTA in 1983. The Secretary and Garcia took direct appeals. The Supreme Court noted probable jurisdiction, restored the cases for reargument after initial argument, and requested briefing on whether the principles of the Tenth Amendment as set forth in National League of Cities v. Usery should be reconsidered.
Sabrina Shah edits a student newspaper at a public university that receives federal research grants. The university extends the same grant eligibility to all student groups including religious publications. The policy keeps the university in compliance with the funding conditions.
Rosenberger v. Rector and Visitors of the University of Virginia515 U.S. 819 (1995)
The University of Virginia, an instrumentality of the Commonwealth of Virginia, maintains a Student Activities Fund financed by a mandatory $14 per semester fee assessed to each full-time student. The fund supports extracurricular student activities related to the University's educational purpose through payments to third-party contractors for approved groups that qualify as Contracted Independent Organizations.
To obtain CIO status, a student group must be composed primarily of University students, file its constitution, pledge nondiscrimination, and agree to a disclaimer stating that it is independent of the University. CIO publications are eligible for printing-cost reimbursement if their content is related to the University's educational purpose, but the Guidelines expressly exclude funding for any activity that primarily promotes or manifests a particular belief in or about a deity or an ultimate reality.
In 1990, University of Virginia undergraduates formed Wide Awake Productions as a CIO and began publishing Wide Awake: A Christian Perspective at the University of Virginia. The first issue contained articles on racism, crisis pregnancy, prayer, C. S. Lewis, and reviews of religious music, each marked by a cross; subsequent issues addressed homosexuality, missionary work, eating disorders, and Christian theology, with advertisements from churches and Christian bookstores.
In 1991, Wide Awake Productions requested $5,862 from the Student Activities Fund to cover printing costs for one issue. The Appropriations Committee of the Student Council denied the request on the ground that the publication constituted a religious activity under the Guidelines. Wide Awake Productions appealed the denial through the Student Council and the Student Activities Committee, which upheld the decision.
The group and three of its student editors and members then filed suit in the United States District Court for the Western District of Virginia under 42 U.S.C. § 1983, alleging that the refusal to pay printing costs violated their rights under the First Amendment Speech, Press, and Free Exercise Clauses and the Equal Protection Clause. On cross-motions for summary judgment, the District Court ruled for the University. The United States Court of Appeals for the Fourth Circuit affirmed, and the Supreme Court granted certiorari.
Stella Shapiro operates a farm that receives federal crop-support payments. A later statute attempts to reopen final payment determinations from prior years. The payments remain final because Congress cannot retroactively alter completed spending obligations.
Plaut v. Spendthrift Farm, Inc.514 U.S. 211, 228 (1995)
In 1987 petitioners filed a civil action in the United States District Court for the Eastern District of Kentucky against respondents. The complaint alleged that respondents had committed fraud and deceit in the sale of stock in 1983 and 1984 in violation of section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.
The District Court dismissed the action as time barred under the then-applicable Kentucky statute of limitations. While petitioners' appeal was pending in the Court of Appeals for the Sixth Circuit, the Supreme Court decided Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson on June 20, 1991. The next day the Court applied that decision to dismiss another pending appeal.
The Sixth Circuit remanded petitioners' case to the District Court for further proceedings in light of Lampf. On August 13, 1991, the District Court dismissed the action with prejudice under the Lampf statute of limitations. Petitioners filed no appeal, and the judgment became final thirty days later on December 18, 1991.
On December 19, 1991, the President signed the Federal Deposit Insurance Corporation Improvement Act of 1991. Section 476 of that Act added section 27A to the Securities Exchange Act of 1934. Subsection (b) provides that any private civil action under section 10(b) commenced on or before June 19, 1991, which was dismissed as time barred after that date and which would have been timely under the limitation period provided by the laws applicable in the jurisdiction as such laws existed on June 19, 1991, shall be reinstated on motion by the plaintiff not later than sixty days after December 19, 1991.
Petitioners promptly filed a motion under section 27A(b) to reinstate their action. The District Court denied the motion. The Court of Appeals for the Sixth Circuit reversed, and the Supreme Court granted certiorari.
Sierra Solutions manages a waste facility in a state offered federal funds to accept out-of-state radioactive waste. The state accepts the funds and enacts the required siting rules. The program proceeds because the state voluntarily agreed to the spending conditions.
New York v. United States505 U.S. 144, 168 (1992)
Low-level radioactive waste is generated by many sources and must be isolated from humans for long periods. Historically the Nation relied on a small number of disposal sites. Concern about declining disposal capacity prompted Congress initially to adopt the Low-Level Radioactive Waste Policy Act of 1980. That statute declared a federal policy that each State is responsible for providing for disposal of waste generated within its borders. It authorized States to enter into regional compacts. That Act contained no penalties for nonparticipation.
By 1985, with few operational sites and a looming crisis, Congress enacted the 1985 Amendments. The amendments were based largely on proposals of the National Governors' Association. They embodied a compromise among sited and unsited States. The 1985 Act directs each State to be responsible for disposal of low-level radioactive waste generated within the State. It authorizes States to enter into interstate compacts. For an additional seven years the three existing disposal sites were required to make capacity available for waste from any source. Sited States were permitted to exact graduated surcharges on out-of-region waste. After the transition period approved compacts could exclude out-of-region waste.
The Act provides three types of incentives to encourage States to comply with its requirements. The monetary incentives authorize sited States to impose surcharges on out-of-state waste. They require the Secretary of Energy to collect a portion of the surcharge into an escrow account. They permit distribution of that fund to States that achieve the statutory milestones. The access incentives authorize sited States and regional compacts to increase and ultimately deny access to their sites to waste from States that do not meet federal deadlines. The take title provision requires a State that fails to provide for disposal by January 1, 1996. Upon request of the generator or owner of waste, the State must take title to and possession of the waste and be liable for damages suffered by the generator or owner as a result of the State's failure to take possession.
The petitioners, New York and two of its counties, sought a declaratory judgment that the three incentives are inconsistent with the Tenth Amendment and with the Guarantee Clause of Article IV, § 4. The District Court dismissed the complaint. The Court of Appeals affirmed.
What limits apply when Congress attaches conditions to federal grants to states?
Congress may attach conditions that promote the general welfare, are stated unambiguously, relate to the federal interest in the program, and do not induce states to violate other constitutional provisions. Financial pressure must not rise to the level of coercion.
Supporting sources
Can Congress use the spending power to influence state alcohol policies?
Yes. Congress may condition federal funds on state adoption of alcohol-related policies such as minimum drinking ages when the conditions relate to the federal interest in the funded program. The Twenty-First Amendment does not bar this indirect approach.
Supporting sources
Does the spending power allow Congress to achieve objectives it could not reach through direct regulation?
Yes. Congress may spend for any public purpose and attach conditions even in areas of traditional state concern so long as the conditions satisfy the relatedness and non-coercion requirements.
462 U.S. 919, 954 n. 16, 103 S.Ct. 2764, 2785 n. 16, 77 L.Ed.2d 317
…one House of Congress to have been guilty. : When Congress grants particular individuals relief or benefits under its spending power, the danger of oppressive action that the separation of powers was designed to avoid is not implicated. Similarly, Congress may authorize the admission of individual aliens by special Acts,…