Tuesday, March 17, 2009

Further Issues Regarding the Constitutionality of the Bailout

It appears that a specific provision of the new stimulus legislation is causing a constitutional stir.  Con Law Professor Ronald Rotunda wrote an article for the Chicago Tribune criticizing the portion of the legislation that allows state legislators to bypass a governor's decision to reject stimulus funds.   The most relevant portion of the article states:

The two main sources of power that might justify subsection (b) are Congress' power over interstate commerce and its power to tax and spend. The commerce power does not support this law. The commerce power is very broad indeed, but there are limits. One important one is that Congress can only use the commerce power to subject the states to "generally applicable" law. For example, if Congress sets the minimum wage at $7 an hour for all workers in interstate commerce, that law can include state workers in interstate commerce. But subsection (b) is not "generally applicable." By its very nature it only governs states.

The second main source of federal power is the spending power, allowing Congress to bribe the states to take certain actions. For example, years ago Congress told states that it would reduce federal highway funds to any state that did not increase its legal drinking age to 21. The court upheld that law, with Justices William Brennan and Sandra Day O'Connor dissenting.

The spending clause does not work here. Congress is not telling a state, "You must change your state constitution before we will give you a dime." Instead, Congress is simply telling the state, "We have changed your state constitution so that we give more power to the state legislature, without any pesky interference from the governor."

Over at Balkinization, Jack Balkin agrees, and further states:

I think this provision may not be constitutional. Unless you can demonstrate that under South Carolina law, the South Carolina Legislature, acting alone, speaks for the State, it would seem to me that the governor's consent is necessary.

Spending Clause jurisprudence requires that the state freely consent to conditional grants by the federal government. But not just any state official may give consent. The question of who is authorized to give consent to accept federal funding is a question of South Carolina state law, not federal law. Federal law can offer the states money to enforce federal mandates and even to pass legislation, but what it may not do is decide which state official is authorized to consent to federal grants that bind the state and its operations.

Professor Balkin's linked post discusses South Dakota v. Dole's edict that the federal government not coerce the states into action and how it applies in this scenario as well.

As this story develops, it will be interesting to watch.  At present, the legislature has introduced measures to bypass the governor and seek the funds.  We'll see where this leads.

(h/t to the VC, as always on top of things).

NLS

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