The Spending Clause: Comparing the Chief’s Opinion and the Joint Dissent

Some conservatives are not big fans of the Chief Justice right now, since they view his opinion upholding the individual mandate “as a valid exercise of Congress’s taxing power [a]s a sell-out of constitutional principle of the first magnitude.” But if you set aside section III-C of his opinion—and I realize that’s a little like, “Other than that, Mrs. Lincoln, how was the show?”—there is much for conservatives to like about the opinion.

Indeed, at least with respect to the Spending Clause analysis (the part I know best), I suspect many litigants challenging federal programs on the ground that they exceed congressional authority will find themselves quoting the Chief’s opinion more than the joint dissent that provided votes necessary for the outcome. And I would be willing to bet that the Justice Department lawyers tasked with defending those programs will find themselves quoting the joint dissent with approval.

Why? The Chief’s opinion frames the inquiry in a way that suggests the bar for finding a Spending Clause violation is lower. Most notably, the Chief’s opinion for the Court focuses on the fact that “[f]ederal funds received through the Medicaid program have become a substantial part of state budgets, now constituting over 10 percent of most States’ total revenue.” Slip op. 10. The opinion focuses throughout on the ten percent figure, stating in conclusion that “[t]he threatened loss of over 10 percent of a State’s overall budget . . . is economic dragooning that leaves the States with no real option but to acquiesce in the Medicaid expansion.” Slip op. 52 (opinion of Roberts, C.J.). Even the loathed tax section—which is, of course, the opinion for the Court—refers to “10 percent” (there, of “a company’s net income”) as “an exceedingly heavy burden.” Slip op. 35.

The Chief’s focus on the burdensomeness of the “10 percent” figure marks something of a departure from how the state challengers themselves litigated the case; they sensibly focused on a figure that included state funds—a more alarming-sounding 20 percent. See State Br. at 39 (“The average State spends at least 20% of its entire budget on Medicaid, and federal funds cover no less than half (and oftentimes more) of each State’s costs.”). As the joint dissent notes, other federal programs don’t even hit the 10% mark, see Joint Dissent 41; but by saying 10% of a state’s budget is “surely beyond” the “outermost line where persuasion gives way to coercion,” (slip op. 55 (opinion of Roberts., C.J.)), it frames the issue in a way that I think challengers will find helpful in challenging programs that do not reach the ten percent mark. In this respect, it reminds me of the opinions of the man John Roberts replaced—his former employer, William H. Rehnquist.

While the Chief’s opinion focuses on the minimum federal share, the joint dissent collects figures that emphasize the great size of the program. It starts with a measure that emphasizes the size of the program—pre-expansion Medicaid “equals nearly 22% of all state expenditures combined,” Joint Dissent 39; id. at 42 (amount threatened for withholding “equal[s] 21.86% of all state expenditures combined”)—and then notes that many states, Medicaid spending exceeds even that measure. For example, Arizona stood to lose federal funding “equal to 33% of all state expenditures,” id. at 41, and South Dakota could have lost  “federal funding equaling 28.9% of its annual state expenditures.” Id. at 42.

The size of the pool of threatened funds is what it is, so the way it is framed  may principally be a rhetorical consideration for future challengers. But in addition, the joint dissent emphasizes the exceptionality of the Medicaid program:  It is “the largest federal program of grants to the States” (Joint Dissent at 39), representing “42.3% of all federal outlays to the States” (id. at 42). “After Medicaid, the next biggest federal funding item is aid to support elementary and secondary education, which . . . equals only 6.6% of all state expenditures combined.” Id. at 40-41. And here is the money quote that will certainly be appearing in government briefs: “The States are far less reliant on federal funding for any other program.” Id. at 40 (emphasis added).

Emphasizing the extraordinary nature of Medicaid is a great way of supporting the conclusion that the Medicaid expansion’s leveraging of pre-ACA Medicaid funds is unduly coercive. That is how the challengers could so effectively argue that if the Medicaid expansion did not run afoul of South Dakota v. Dole’s anti-coercion requirement, no law ever would. Compare State Brief 53 (“If the threatened loss of 100% of federal Medicaid funding . . . is not sufficient to pass the ‘point at which pressure turns into compulsion,’ then the coercion doctrine itself is ‘more rhetoric than fact.’”) (citations omitted); with Joint Dissent 38 (“If the anticoercion rule does not apply in this case, then there is no such rule.”). But it is not especially helpful to Spending Clause challenges down the road, which necessarily will involve programs that lack the dramatic impact of the Medicaid program.

Leaks suggest that that, far from joining any part of the Chief’s opinion, the Joint Dissenters “deliberately ignored Roberts’ decision, . . . as if they were no longer even willing to engage with him in debate.” I suspect those challenging federal legislation will wish the dissenters had joined the relevant portions of the Chief’s opinion to make its favorable framing of the issue the view of a majority of the Court.

As an aside, I was struck by how few references the joint dissent contains to the Chief—a single, parenethetical reference to his opinion in the course of observing that “[s]even Members of the Court agree that the Medicaid Expansion, as enacted by Congress, is unconstitutional.” Joint Dissent 46. The opinion has more references to Justice Roberts, the author of 1936’s United States v. Butler (three, one by name).