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Sanctuary 101, Part III: Can Trump Condition Federal Funds This Way?

Jane Chong
Wednesday, March 15, 2017, 9:30 AM

[This is Part III in a four-part series that addresses the confusion around sanctuary cities. See Part I and Part II.]

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[This is Part III in a four-part series that addresses the confusion around sanctuary cities. See Part I and Part II.]

Whether Trump’s sanctuary cities executive order is constitutional actually breaks down into two separate inquiries. First, can Trump condition federal grants in this manner—that is, on compliance with a single, substantively narrow statutory provision like § 1373? Second, is § 1373 itself lawful?

In this post, I tackle the first question.

Some commentators have not clearly distinguished Trump’s authority to restrict federal funds from Congress’s authority to do so, instead conflating the two under the “federal government” umbrella (see Noah Feldman’s argument for the order’s unconstitutionality and David Rivkin and Elizabeth Price Foley’s argument to the contrary). But congressional and presidential power to condition federal funding are not the same.

We start with what Congress can and cannot do when conditioning federal funding because we have Supreme Court precedent on that. Under the Spending Clause, Congress has a lot of latitude when it comes to conditioning federal funds on whether the states agree to act in accordance with desired federal policy, but there are limits to that power: the Supreme Court has long drawn a theoretical line between the permissible conditioning of funds and financial inducement that is "so coercive as to pass the point at which ‘pressure turns into compulsion.’” There is uncertainty about where that line now lies. The Court was extremely deferential to Congress’s conditional spending forays until 2012, when it ruled in Sebelius that the Affordable Care Act unconstitutional to the extent it required states to participate in the dramatic expansion of Medicaid (by almost 40 percent of the existing federal Medicaid budget) as a condition of staying eligible to receive any federal Medicaid funds.

Most famously, all fifty states make 21 the legal drinking age because in the most important pre-Sebelius conditional funding case, South Dakota v. Dole, 483 U.S. 203 (1987), the Supreme Court used a five-part rule to uphold the constitutionality of a federal statute that threatened to withhold a percentage of federal highway funds from states that set a lower drinking age. One part of that rule (a carryover from an older case) holds that if Congress wants to condition funds, it must do so "unambiguously." So, as the Washington Post’s Ilya Somin has argued, Trump’s attempt to condition federal grants on compliance with § 1373 is unconstitutional because this new condition is not “unambiguously” stated in the text of the laws doling out the grants in question.

But let’s put aside the unambiguous statement requirement and the rest of the five-part rule for a minute. Somin is right in going further and clarifying that “[a]ny such [additional funding] condition must be passed by Congress . . . .” This point is key and hasn’t been highlighted enough in the meandering discussions floating around online on everything from Dole to Pennhurst State School & Hospital v. Halderman to Sebelius. None of these Supreme Court cases is really about the federal government’s ability to condition funds; they specifically describe limits on Congress’s authority to condition funds pursuant to its concededly expansive Article I Spending Clause power. In other words, when citing the above cases to make their argument for the constitutionality of Trump’s order, commentators are, in essence, going an extra mile and arguing that even a congressional statute that read exactly like Trump’s order would be constitutional or unconstitutional. We don’t have to stretch that far: the president does not have Congress’s ability to condition federal spending on state cooperation with federal policy. To the extent the President tries to stymy funding already approved or allocated by Congress—that is, by imposing an extra condition on all federal funding to states and localities, irrespective of Congress’s decisions about that funding—he is creating both federalism and separation-of-powers issues.

Defunding bills consistent with Trump's order have indeed been introduced in the Senate and House, but they are unlikely to overcome Democratic opposition, and in any case Trump’s order is, by itself, on weaker legal footing.

How much power Trump has by himself to direct and cut off federal funds turns in great part on the type of funds we are talking about—among other things, the authorities by which and purpose for which they have been allocated. This is presumably exactly what Trump is looking into; his executive order directs the Director of the Office of Management and Budget "to obtain and provide relevant and responsive information on all Federal grant money that currently is received by any sanctuary jurisdiction."

But this much we know: federal grants account for about a third of state government funding, and contrary to some suggestive media reports, far from all of it is in danger. For example, Trump won’t (and couldn’t) go after “mandatory” funding for entitlements programs like Medicaid—which is administered by state governments, for which spending is prescribed by statutory eligibility not annual appropriations, and which in 2016 constituted about 65 percent of total federal grant funding (here a citation to the Sebelius case and the limits it placed on Congress’s power to do this very thing—pull federal support for Medicaid from uncooperative states—is appropriate).

The funds we are seriously talking about are non-defense discretionary (NDD) funds, which is allocated to domestic and international programs at levels set through the annual congressional appropriations process. In 2015, 32 percent of the $585 billion in NDD spending went to grants to states and localities, for things like public transit projects and K-12 education.

As for the president’s ability to attach conditions on these funds, there are really two ways to look at the problem.

Let’s start with the legal stuff. As Somin explains, any conditions Trump would seek to formally impose on states as a condition of funding “would need to be newly enacted by Congress, would apply only to future grants, would have to be unambiguously clear, and not be so severe as to be ‘coercive.’ They would also have to be related to the purpose of the grant.” Put differently, Trump's ability to condition discretionary funds is, at the very least, technically limited by the rest of the five-part rule restricting Congress’s ability to condition funds. Two of the most important of these requirements is that the funding condition must relate "to the federal interest in particular national projects or programs" (as flagged by Somin) and must itself be constitutional.

Perhaps recognizing the first restriction, DHS Secretary John Kelly himself has suggested that the funds that might be revoked are those provided to states for immigration-related purposes. He told New York Magazine last month, “If we are specifically giving grants for cooperation on the removal of illegal aliens and the department or city is no longer doing that, it seems irresponsible to me to continue giving them the money, but it will be case by case.” Or Trump might more broadly attempt to withhold law enforcement funds from states, with a carve-out for funds “deemed necessary for law enforcement purposes” (emphasis added).

Now let's consider pragmatic points. As a constitutional matter, Trump can’t simply create extra conditions to preclude the distribution of all sorts of discretionary funds in contravention of Congress's will. But the Miami-Dade County Attorney is correct in pointing out that certain executive branch departments and agencies tasked with administering the grants “wield considerable sway over their allocation” by the terms of the authorizing legislation. For example, the American Recovery and Reinvestment Act of 2009 allows the Secretary of Education to condition the award of “Race to the Top” grants on “such other criteria as the Secretary determines appropriate.” Further, it would be difficult for the County to demonstrate that its immigration policies outside of § 1373, such as its detainer policy, were a dispositive factor in a denial of discretionary grant funding even if this could form a basis for challenge.

So states that displease Trump put themselves at potential disadvantage when it comes to the administration’s veiled, retaliatory, difficult-to-trace funding allocation biases. But that’s not particular to this order, to immigration policy or even to Trump; no less than Congress, the president always has reason and opportunity to direct federal funds in accordance with his electoral interests and presidential policy preferences. This is why, for example, swing states are regularly allocated more funds than other states. (On this general subject, I recommend Presidential Pork: White House Influence Over the Distribution of Federal Grants, by Brookings senior fellow John Hudak).

It would be a shame if, over the next four years, states and localities decided to go the way of Miami-Dade in hopes of currying general, hard-to-measure funding favor. That’s an endless game, one that extends way beyond this order, and it amounts to underappreciating the states’ constitutionally-ordained capacity to push back against the federal government on policies that negatively impact their constituents and local interests.

Our federalist system divides power between our national government and state governments, and, as the Supreme Court declared in Bond v. United States, "[b]y denying any one government complete jurisdiction over all the concerns of public life, federalism protects the liberty of the individual from arbitrary power." Though we tend to think of the federal government as a force for rights-enforcement among the states—a key recent example being the Obama-era Justice Department lawsuit against the city of Ferguson for law enforcement practices that violate individual constitutional rights and federal civil rights laws—states, too, have significant power to resist oppressive national policies in the interest of protecting individual liberties, should they so choose.

Marginal executive funding allocations aside, their ability to make that choice is well protected. It’s precisely why § 1373 is so narrow. That provision doesn’t even require states and localities to provide ICE agents information; it more humbly prohibits them from enacting certain prohibitions. This is because, under the Tenth Amendment, the federal government may not unconstitutionally “commandeer” state and local officials to administer or enforce a federal regulatory program. Commandeering infringes on state sovereignty by allowing the federal government to shift the financial burdens of its policies to the states and also to escape political accountability by confusing voters about where to lay the blame or credit for those policies.

This brings me to the second big constitutional question: whether the funding condition at issue here—as embodied in § 1373—is itself a violation of anti-commandeering principles. Stay tuned.

Jane Chong is former deputy managing editor of Lawfare. She served as a law clerk on the U.S. Court of Appeals for the Third Circuit and is a graduate of Yale Law School and Duke University.

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