Policy Documents

Loosening the Federal Straightjacket

Mario Loyola –
October 9, 2013

With the 2012 ObamaCare decision in NFIB v. Sebelius, the Court ruled that where large sources of federal funding for states are conditioned on state compliance with new programs, there may be impermissible coercion of state governments. The Court’s ruling has significant implications for other sources of federal funding in the Texas state budget. According to the February 2013 report of the Texas Legislative Budget Board there are more than 400 sources of federal funds in the Texas budget. Many of those programs have been conditioned on states’ acceptance of new programs. This paper examines several state programs that are likely vulnerable as a result of containing a penalty similar to the one struck down in NFIB. We make specific recommendations for pushing back against coercive federal funds.