Wednesday, December 10, 2014

In Defense of Cutting Off Federal Funds by Eloise Pasachoff

Should the Education Department withhold federal funds from states and school districts that are failing to comply with the conditions on the funds?  As the Supreme Court noted in NFIB v. Sebelius, the 2012 case about the Affordable Care Act, federal funding for education is second only to federal funding for Medicaid.  It's therefore critical to understand this important enforcement mechanism.  Although funding cut-offs are a powerful tool -- think desegregating southern schools in the 1960s through the combination of Title VI and the Elementary and Secondary Education Act -- they are a controversial one.  In my forthcoming article in Yale Law Journal, Agency Enforcement of Spending Clause Statutes: A Defense of the Funding Cut-Off , I unpack the controversy, focusing on federal grants more generally, not just education grants, but I use a lot of education examples throughout, given the importance of federal funding to federal education law.  

The abstract explains:

[F]ederal agencies ought more frequently to use the threat of cutting off funds to state and local grantees that are not adequately complying with the terms of a grant statute. Scholars tend to offer four arguments to explain — and often to justify — agencies’ longstanding reluctance to engage in funding cut-offs: first, that funding cut-offs will hurt the grant program’s beneficiaries and so will undermine the agency’s ultimate goals; second, that federalism concerns counsel against federal agencies’ taking funds away from state and local grantees; third, that agencies are neither designed nor motivated to pursue funding cut-offs; and fourth, that political dynamics among state governments, Congress, the White House, and the agencies themselves make funding cut-offs difficult to achieve. This article argues that these critiques are deeply flawed. Among other problems, the critiques fail to account for the variety of types of grants, grant conditions, and rationales for grantee noncompliance; reflect lack of a nuanced understanding of the ways in which distinct federalism concerns play different roles at different times in the development and implementation of grant programs; and unrealistically assume static and unified agency incentives and political relationships. After debunking these critiques, the Article offers a new conception of the potential benefit of funding cut-offs in the enforcement of federal grant programs: the threat of a funding cut-off may be appropriate when it can promote change by the noncompliant grantee and when it can signal to other grantees that the agency is serious about enforcement, thereby increasing grantees’ compliance. The article concludes by assessing the implications of this argument for administrative regime design and judicial review. This work opens up new avenues for research in administrative law on the distinct features of the federal grants regime.

https://lawprofessors.typepad.com/education_law/2014/12/in-defense-of-cutting-off-federal-funds-by-.html

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