Chapman Law Review
Spending Clause Symposium
THE SPENDING POWER AND THE FEDERALIST REVIVAL
Copyright (c) 2001 Chapman Law Review; Lynn A. Baker
Amid all the attention afforded the Court’s recent federalism decisions, one important fact has gone largely unnoticed: The greatest threat to state autonomy is, and has long been, Congress’s spending power. No matter how narrowly the Court might read Congress’s powers under the Commerce Clause and section 5 of the Fourteenth Amendment, and no matter how absolute a prohibition the Court might impose on Congress’s “commandeering” of state and local officials, the states will be at the mercy of Congress so long as there are no meaningful limits on its spending power.
The Framers did not intend for Congress to have a near plenary power of the purse. As written, the Spending Clause limits Congress’s expenditures to providing “for the common Defence and general Welfare of the United States.” Since 1936, however, the Supreme Court has held this limitation to be effectively nonjusticiable and, with few exceptions, has historically declined to review Congress’s spending decisions. In addition, since 1923 the Court has crafted standing doctrine to severely restrict the ability of taxpayers to challenge Congress’s spending decisions in any federal court.
Today, Congress’s largely unfettered spending power undermines the Constitution’s protections for state autonomy and reduces aggregate social welfare in two major ways: through systematic fiscal redistribution among the states and conditional federal spending. This Article examines this important and long-standing, if largely undiscussed, problem. I conclude that state autonomy cannot be protected in this context through either of the means most frequently proposed: the inherent protections of the federal lawmaking process or the process of constitutional amendment. Thus, the only viable protection lies in judicial review under the existing Spending Clause. The interesting question then becomes why the modern Court has so steadfastly refused to play any role in this area.
Part I explains how the modern Congress regularly uses fiscal redistribution among the states and conditional federal spending to impinge, intentionally or unintentionally, on the autonomy that the Framers sought to guarantee the states. This Part also explains how and why these intrusions on state autonomy reduce aggregate social welfare. Thus one need not subscribe either to “originalist” schools of constitutional interpretation or to my reading of the Framers’ intent in this context in order to find the existing state of affairs unsatisfactory. One need only be persuaded that a reduction in aggregate social welfare is both likely and problematic.
Part II examines two commonly invoked means of limiting congressional power in the area of states’ rights and argues, contrary to the existing commentary, that neither of them can be successful in this context. I show, first, that the states cannot protect themselves through the federal political process against Congress’s exercise of its spending power, notwithstanding the fact that Congress is comprised of representatives of the states. Second, I demonstrate that an amendment to enhance the existing, unenforced constitutional constraints on Congress’s spending power will never be formally proposed, let alone ratified, because an identifiable group of states–numerous enough to block the proposal of such an amendment– systematically and unjustifiably benefits from the existing regime.
In light of these difficulties constraining Congress’s spending power through other means, the inexorable conclusion is that any solution rests with the Courts’ willingness to exercise judicial review under the Spending Clause. Part III discusses the importance of judicial review in this area, and concludes with speculation on why the modern Court nonetheless has so aggressively declined to play any meaningful role in limiting Congress’s spending power.
I. The Effects of the Modern Congress’s Spending Power on State Autonomy and Aggregate Social Welfare
The modern Congress’s exercise of its spending power regularly impinges in two general ways on the autonomy that the Framers sought to guarantee the states: through fiscal redistribution among the states and conditional federal spending. In this Part, I describe each of these intrusions on state autonomy and explain why each occurs. I also explain why each type of intrusion reduces aggregate social welfare.
A. Fiscal Redistribution Among the States
It is well known that the existing structure of representation in Congress, combined with the existing rules of majoritarian decision making, affords small population states disproportionately great representation relative to their shares of the nation’s population. It is much less well known that this allocation of representation significantly affects the distribution of gains from any legislation Congress enacts under the Spending Clause, ensuring small population states a disproportionately large slice, and large population states a disproportionately small slice, of the federal “pie.” This systematic wealth redistribution obviously infringes on the autonomy of the states that are burdened by the redistribution: In the absence of such redistribution, the burdened states would effectively have more money and, therefore, greater freedom of choice. In this section, I explain how and why, in the absence of any meaningful constitutional constraint, Congress’s exercise of its spending power can be expected to result in systematic wealth redistribution from the larger states to the smaller states.
Insofar as members of Congress are concerned with re-election, and therefore also with the welfare of their constituents, they will each seek to enact legislation whose expected benefits to his or her own constituents exceed its expected costs to them. Moreover, because legislators themselves are scarce resources and their choice of agenda necessarily entails opportunity costs, their first priority is likely to be legislation whose expected benefits to their constituents most greatly exceeds its expected costs to them. Thus, we would expect each legislator to be especially eager to enact “special legislation” whose benefits accrue uniquely to her own constituents but whose costs are spread among the constituents of all legislators. Certainly, each legislator should be relatively more interested in enacting such special legislation than in seeking legislation whose costs and benefits are both generally distributed or are both concentrated on her own constituents.
Unfortunately, special legislation is more likely to be expropriative, that is, to have aggregate costs that exceed its aggregate benefits, than legislation whose costs and benefits are both generally distributed or both concentrated on the same constituency. Each of these latter two types of legislation is likely to be enacted only if its aggregate benefits exceed its aggregate costs since no constituency is likely to seek the passage of legislation whose costs to itself exceed its benefits. Special legislation, however, may be enacted even if its aggregate costs exceed its aggregate benefits. Since vote trading is possible, Legislator A will often agree to support legislation that yields $10 million in benefits for Legislator’s B constituents even if it imposes aggregate costs of $11 million on the rest of the nation (including, but not concentrated on, Legislator A’s constituents). Legislator A will support this legislation in exchange for Legislator B’s vote on legislation that similarly benefits Legislator A’s constituents at the expense of the rest of the nation (including Legislator B’s constituents).
Notwithstanding the aggregate welfare loss, this type of vote trading would be attractive to representatives for at least two reasons. First, the terms of each representative’s trades, taken alone, might well provide her own constituents aggregate benefits that exceed the aggregate costs to them. That is, in order to obtain support sufficient to enact legislation that provides her constituents $10 million in special benefits, a representative may need to support legislation that provides other representative’s constituents special benefits at an aggregate cost to her own constituents of only $8 million. This is possible because the approval of only a simple majority of legislators is necessary for enactment. Thus, the constituents of representatives who were not a party to these particular bargains, and who may have even opposed the legislation, will nonetheless bear a portion of its total cost, a portion that the beneficiaries of the special legislation need not internalize.
Second, even if the terms of a particular set of trades do not provide a representatives’ constituents aggregate benefits that exceed its aggregate costs to them, the representative will be able to claim complete credit for the special legislation that benefits her constituents, but will share only diffuse blame for helping enact special legislation that benefits others at the partial expense of her own constituents. Because this blame is diffuse, it will be less salient to her own constituents and may also be less well publicized than the passage of the beneficial special legislation. Thus, the benefits to each representative of this sort of vote trading are likely to exceed the costs.
This is the tragedy of the legislative commons. Although each representative’s individually rational decision will necessarily contribute to a decline in social welfare, a representative can only hurt her own constituents (and therefore her own chances for re-election) if she does not seek special legislation. For in a majoritarian system in which vote trading is possible, a representative’s constituents nonetheless will bear part of the costs of other successful bargains resulting in special legislation for other representatives’ constituents, including bargains to which the representative was not a party and which she even may have opposed. Thus, only by joining the race to forge successful bargains that simultaneously benefit her constituents and exploit those who are not members of the winning coalition–a true “race to the bottom”–can an individual legislator maximize her constituents’, and therefore her own, welfare.
Of course, legislation must also receive the approval of the President before it becomes law, and such expropriative legislation seems a likely target for an executive veto. Because his constituency is the entire nation, a President might be expected to be guided by the preferences of a majority of the entire electorate. And, notwithstanding its passage by a majoritarian body, special legislation is unlikely to have the sincere support of a majority of voters. Nonetheless, special legislation is unlikely to be vetoed for the same sorts of reasons that legislators seek its enactment. Should he veto such legislation, the President will arouse the intense, well publicized, and not-soon-forgotten ire of the concentrated minority that would have benefited from the legislation, while simultaneously providing a diffuse and scarcely salient benefit to a substantial majority. Certainly, the benefits to a President of vetoing such legislation (particularly during his first term) will seldom exceed the costs.
Given this analysis, one would expect much of the legislation that Congress enacts pursuant to its spending power to be special legislation that reduces aggregate social welfare. These enactments would not impinge on state autonomy, however, if representation of the states in Congress were allocated solely on the basis of population, and each state’s coalition-building power (i.e., its power to enact legislation) in Congress were therefore substantially proportional to its share of the nation’s population. Under a scheme of proportional representation, one would expect the total dollar amount of each state’s benefits from all the special legislation enacted over time to be approximately proportional to its population, and the per capita benefits to each state would therefore be nearly the same. Thus, under a scheme of purely proportional representation, one would not expect Congress’s spending legislation to reveal systematic fiscal redistribution among the states with its attendant impingement on the autonomy of the states that systematically bear the costs of the redistribution.
In fact, of course, the representation of the states in the Senate is not proportional to their respective populations. Because each state receives two representatives, the Senate affords small-population states (“small” states) disproportionately great representation, and large-population states (“large” states) disproportionately little representation, relative to their shares of the nation’s population. This in turn means that the small states have disproportionately great “coalition-building power” in the Senate relative to their shares of the nation’s population.
One measure of a state’s theoretical “coalition-building power” is the likelihood that it will be the swing vote on any proposed legislation. In the Senate, each state has the same 2-in-100 theoretical chance to be the swing vote on a given piece of proposed legislation. In the language of modern game theory, the Shapley-Shubik power index of every state is equal in the Senate. But this means that smaller states have a disproportionately greater likelihood, relative to their shares of the nation’s population, of being the swing vote on any proposed legislation. In the House, in contrast, where each state’s representation is substantially proportional to its population, the theoretical likelihood that a small state is the swing vote on any proposed legislation is roughly equal to its share of the population and therefore small. This means that smaller states are less likely than larger states to cast the deciding vote in the House. In sum, the Shapley-Shubik power index of a small state is larger in the Senate than in the House.
Of course, neither the House nor the Senate alone may enact legislation; the approval of at least a simple majority present in each body is required. Thus, one must determine each state’s theoretical coalition-building power in the Congress as a whole. In a previous Article, Samuel Dinkin and I presented the first computer calculations of each state’s Shapley-Shubik power index for Congress. These are set forth in Table 1.
TABLE 1 Shapley-Shubik Power Indices for the States Based on 1990 Census
Comparing any large and small state, these calculations reveal that the smaller state’s disproportionately great power in the Senate, relative to its share of the nation’s population, is only very slightly mitigated by the proportional representation that the House provides. Consider, for example, the following relationships between California and Rhode Island:
Counter-intuitively, the ratio of California’s and Rhode Island’s power in Congress (7.4 to 1) turns out not to be the midpoint between the ratio of their power in the House and the Senate (16.25 to 1), but much more nearly approximates the ratio of their power in the Senate (1 to 1) than the ratio of their power in the House (32.5 to 1).
Of course, theoretical measures of coalition-building power such as the Shapley-Shubik power index capture only part of the complex reality. The committee system, seniority, savvy, and charisma–to name just a few variables–all affect a particular legislator’s, and therefore a particular state’s, actual coalition-building power in the Senate. Happily, however, we need not attempt to quantify these myriad, often intangible, variables. For the equal apportionment of representation in the Senate also determines the likelihood that an especially powerful Senator–by any measure of influence–represents a particular state.
Thus, West Virginia, for example, has a 2-in-100 chance of having one of its representatives chair all of the important Senate committees and otherwise wield the influence that Senator Byrd historically has. To be sure, this is the same 2-in-100 chance that California or Texas has, but it is much larger than the 3-in-435 chance that West Virginia would have if representation in the Senate were apportioned as it is in the House. That is, relative to its share of the nation’s population, West Virginia has a disproportionately great chance of having an especially powerful representative in the Senate, while it has only a substantially proportional chance of having an especially powerful representative in the House.
Given the absence of any constitutional constraints on the modern Congress’s exercise of its spending power, the allocation of coalition-building power in the Senate will importantly affect the distribution of special legislation (“pork”) that Congress enacts under the spending clause. In the Senate, each state has the same likelihood over time of providing the swing vote on a given piece of proposed legislation, and each state’s Senators therefore have the same power to secure special legislation that benefits their constituents. Thus, if the Senate alone could enact legislation, and if all Senators were rationally self-interested, one would expect the total dollar amount of special legislation that each state receives over time to be equal. This means, however, that the per capita benefits of the special legislation received would be substantially greater in small population states than in large ones. When California and Wyoming each secure the equivalent of one billion dollars in special legislation from the federal government, for example, this amounts to $34 for each of California’s 29.8 million residents, but $2,203–sixty-five times as much–for each of Wyoming’s 454,000 residents. In the House, in contrast, representation is allocated on the basis of population, and each state’s coalition-building power within that body is substantially proportional to its share of the nation’s population. Thus, if the House alone could enact legislation, we would expect the total dollar amount of each state’s benefits from all the special legislation enacted over time to be approximately proportional to its population. And the per capita benefits to each state would therefore be nearly the same.
But, of course, neither the House nor the Senate acting alone can pass legislation. The approval of at least a simple majority present in each body is required. And, we would therefore expect the total dollar amount of each state’s benefits from all the special legislation enacted over time to be neither directly proportional to its share of the nation’s population (House), nor equal (Senate), but somewhere in between. More specifically, one might expect the percentage share of special legislation that each state will receive over time to approximate its Shapley-Shubik power index in Congress. The existing allocation of coalition-building power in the Senate is likely to affect the distribution of the “gains” from the special legislation that is enacted by ensuring small states a disproportionately large slice, and large states a disproportionately small slice, of the federal “pie.” The prediction, in short, is that the Senate’s current structure of representation ensures a systematic redistribution of wealth from the larger states to the smaller states.
Empirical evidence supports this theoretical claim. A December 1999 statistical study conducted by researchers at Harvard’s Kennedy School of Government calculates the “balance of payments” that each state had with the federal government in fiscal year 1998. Each state’s contribution to the federal fisc (i.e., individual and corporate income taxes, social insurance taxes, excise taxes, estate and gift taxes, and customs duties) is measured against the federal outlays it received (e.g., Medicare, Social Security, public assistance including Unemployment Insurance, defense spending, including veterans’ benefits, and non-defense discretionary spending including federal programs in agriculture, education, national parks, and transportation).
The results are consistent with the prediction. A regression analysis of the data for all fifty states reveals that the Per Capita Shapley-Shubik Index is a statistically significant (p < 0.05) explanator of the Per Capita Balance of Payments between the states and the federal government for Fiscal Year 1998. As Tables 2 and 3 reveal, the 1998 Fiscal Year balance of payments with the federal government was negative in seven of the ten largest states, but positive in eight of the ten smallest states. The result is an average per capita income transfer of -$542 for residents of the ten largest states, compared to an average per capita income transfer of +$657 for residents of the ten smallest states.
Such systematic redistribution is not problematic if there is a principled justification for it. Unfortunately, however, there does not appear to be one. The most obvious justification, poverty, does not fully explain this systematic difference. The rate of poverty in the ten largest states is higher on average than in the ten smallest states, yet the direction of the average federal income transfer is from the larger to the smaller states. A statistical analysis confirms that even after controlling for each state’s poverty rate as determined by the Census Bureau, the Shapley-Shubik index is still a statistically significant explanator of the individual states’ balance of payments with the federal government.
That a state has a small population does not make it, or its residents, obviously more virtuous, needy, beneficial to the larger society, or otherwise deserving of a disproportionately large share of the federal fisc relative to large-population states and their residents. Neither moral nor economic theory appears to offer any justification for the type of redistribution ensured by the existing allocation of representation in the Senate. Thus, whatever one’s conception of the “general Welfare” constraint of Article I, Section 8 might be, it is unlikely to encompass such redistribution.
B. Conditional Federal Spending
Conditional federal spending is a second way in which the modern Congress’s exercise of its spending power both infringes on state autonomy and reduces aggregate social welfare. A conditional offer of federal funds to the states implicitly divides them into two groups: (1) states that already comply, or would happily comply, with the funding condition(s) without financial inducement and for which the offer of federal money therefore poses no real choice; and, (2) states that find the funding condition(s) unattractive and therefore face the choice of foregoing the federal funds in order to avoid complying with the condition(s), or submitting to undesirable federal regulation in order to receive the offered funds.
When the federal government makes a conditional offer of funds, states in the second group are severely constrained in their decision-making by the lack of equivalent, alternative sources of revenue. There is no competitor to the federal government to which these states might turn for substitute financial assistance. Although each state has the power to raise funds by taxing income, purchases, and property within its borders, this power, too, is subject to indirect federal control. Since the adoption in 1913 of the Sixteenth Amendment, which granted Congress the power to tax income “from whatever source derived, [and] without apportionment among the several States,” the states implicitly have been able to tax only the income and property remaining to their residents and property owners after the federal government has taken its yearly share.
This means, in addition, that when the federal government offers a state money subject to unattractive conditions, it is often offering funds that the state readily could have obtained without those conditions through direct taxation– if the federal government did not also have the power to tax income directly. Moreover, should a state decline proffered federal funds because it finds a condition intolerable, it receives no rebate of any tax dollars that its residents have paid into the federal fisc. In these cases, the state (through its residents) contributes a proportional share of federal revenue only to receive less than a proportional share of federal spending. Thus, when the federal government offers the states money, it can be understood as simply offering to return the states’ money to them, often with unattractive conditions attached.
Through the enactment of conditional federal spending legislation, a simple majority of states is able to harness the federal lawmaking power to restrict the competition for residents and tax dollars that would otherwise exist among them. In the usual course of affairs, each of the fifty states chooses the package of taxes and services, including state constitutional rights and other laws, that it will offer its residents and potential residents. In this way, the states compete for both individual and corporate residents and their tax dollars. As part of its unique package, a state might choose, for example, to prohibit the use of “affirmative action” in the admission of students to its public universities, to prohibit the death penalty, to provide a constitutional or statutory right to same-sex “civil unions,” or to prohibit the purchase or public possession of alcoholic beverages by any person who is less than eighteen years of age. The resulting choices can be understood as a state’s determination that, for it, the benefits of a particular provision of state statutory or constitutional law exceeds the costs.
A state’s statutory or constitutional recognition of same-sex “civil unions,” for example, could be understood as its determination that, for it, the benefits of formally recognizing intimate relationships that some consider morally repugnant outweigh the costs. In the absence of a federal government, a state that formally recognizes only marriages between a man and a woman would have only two ways to compete with a state, such as Vermont, that chooses also to formally recognize same-sex unions. The former state could continue to offer its current package of taxes and services, including the formal recognition of marriages involving only two persons of different sexes, and seek to attract (and retain) those individuals and corporations who prefer this package. Or, the state could make some adjustment(s) to its package, which may include adopting a statutory or constitutional provision formally recognizing same-sex unions.
Conditional federal spending, however, provides the majority of states, which do not formally recognize same-sex civil unions, a third, competition-impeding option whenever a state might choose to formally recognize such relationships: The majority’s congressional representatives could simply enact an appropriately conditioned offer of federal funds in order to divest the outlier state of any competitive gains from its action. By supporting legislation that offers the states federal funds on the condition that they not formally recognize same-sex marriages or civil unions, a coalition of the states that are unwilling to formally recognize such relationships can put any state that does to an unattractive choice: either abandon the competitive advantage that its formal recognition of same-sex unions presumably affords, or forego the offered federal funds and accept an obvious financial disadvantage relative to each state that accepts the federal money. In this way, conditional offers of federal funds necessarily make the states that without financial inducement would not willingly comply with the funding condition relatively worse off than they would have been in the absence of the offer, while making all other states, by implication, relatively better off.
Through the enactment of conditional federal spending legislation, a simple majority of states is able to harness the federal lawmaking power to force some states to pay more than others (including themselves) for their preferred package of laws. This is especially problematic when the funding condition seeks to reduce–to the minimums mandated by the U.S. Constitution and federal statutes–the heightened statutory or constitutional protection that a small number of outlier states currently provide certain minorities. In these cases, one might expect the increased cost of the protection, measured in terms of foregone federal funds, to cause an outlier state readily to relinquish it. After all, the greatest and most direct benefits of such heightened protection will typically accrue to a relatively small and powerless segment of the state’s voters, while the proffered federal funds may well be of direct benefit to a substantial majority.
By providing a competition-impeding alternative to interstate competition, conditional offers of federal funds reduce the diversity among the states in the package of taxes and services, including state constitutional rights and other laws, which each offers. Thus, some individuals and corporations may no longer find any state that provides a package (including the formal recognition of same-sex civil unions, for example) that suits their preferences, while other individuals and corporations may confront a surfeit of states offering a package (including a prohibition against legally recognized same-sex unions) that they find attractive. The net result is likely to be a decrease in aggregate social welfare, since the loss in welfare to opponents of same-sex unions is unlikely under these circumstances to yield a comparable gain in welfare for those who favor it.
II. The Ineffectiveness of Traditional Means of Limiting Congress’s Spending Power
The discussion in Part I makes clear that formalists and functionalists alike should favor the restoration of limits on Congress’s spending power. A less plenary conception of the spending power would not only be more consistent with the Framers’ intent, it would also increase aggregate social welfare. But how do we get from here to there? How might limits once again be imposed on Congress’s spending power?
In this Part, I consider two promising possibilities. First, if one’s concern is protecting state autonomy, perhaps no constitutional limits on Congress’s spending power are necessary. Perhaps the state-based nature of representation in Congress affords the states adequate protection against autonomy-infringing exercises of the congressional spending power. Second, a constraint on Congress’s spending power could, in theory, be explicitly reimposed via the Constitution’s amendment process. Examples proposed in recent years include the Balanced Budget Amendment and supermajority rules for the passage of certain spending legislation. Notwithstanding the plausibility of each of these means of limiting Congress’s spending power, the analysis in this Part shows, perhaps surprisingly, that each is doomed to failure.
A. Protections of the Political Process
When concerns are expressed about the scant protections afforded the states under modern readings of the Constitution, a now-classic response is to invoke the nature of the federal political process. The political process argument contends that there is no need for the federal courts to invalidate federal legislation that may encroach on the autonomy of the states because of the role that the states themselves play in the enactment of federal legislation. That is, the states are arguably fully capable of protecting themselves against federal oppression through the federal political process, so there is simply no need for further, external limits on Congress’s spending power.
Consider the reasoning of Professor Herbert Wechsler who, along with Professor Jesse Choper, is the scholar with whom this argument is commonly associated. Wechsler has observed that the Senate, in which all states are equally represented, “cannot fail to function as the guardian of state interests as such,” and that “[f]ederalist considerations . . . play an important part even in the selection of the President.” He has therefore concluded that “the Court is on weakest ground when it opposes its interpretation of the Constitution to that of Congress in the interest of the states, whose representatives control the legislative process and, by hypothesis, have broadly acquiesced in sanctioning the challenged Act of Congress.”
The central problem with Wechsler’s analysis is that he misidentifies the problem. While the state-based apportionment of representation within the federal government may well ensure that “state interests as such” are protected against federal oppression, federal oppression is not the problem. The problem, rather, lies in the ability of some states to harness the federal lawmaking power to oppress other states. Not only can the state-based allocation of congressional representation not protect states against this use of the federal lawmaking power, it facilitates it.
Wechsler’s observation about the Senate’s role in protecting state autonomy is especially ironic in the context of fiscal redistribution among the states. The analysis in Part I.A. showed that under a scheme of purely proportional representation, such as the House provides, one would not expect Congress’s spending legislation to reveal systematic fiscal redistribution from the larger states to the smaller states. This redistribution, with its attendant impingement on the autonomy of the large states that systematically bear its costs, occurs solely because of the disproportionately great (because “equal”) representation that the Senate affords small-population states.
As a theoretical matter, it is therefore clear that the state-based allocation of Congressional representation cannot protect the large states against autonomy-infringing (and aggregate-welfare reducing) fiscal redistribution. As an empirical matter, the discussion in Part I.A. also makes clear that the state-based allocation of Congressional representation does not protect the large states against this encroachment on their autonomy.
Conditional federal spending legislation is no different. The state-based apportionment of representation in Congress does not prevent, and in fact facilitates, the ability of some states to harness the federal lawmaking power to encroach on the autonomy of other states to their own advantage. Recall that a conditional offer of federal funds to the states implicitly divides them into two groups. One would therefore expect such conditional funding legislation to be enacted only if a (substantial) majority of states fall within the first group: that is, if they already willingly comply with, or favor, the stated condition, and the conditional offer of funds is therefore no less attractive to them than a similar unconditional offer. Few congressional representatives, after all, should be eager to support legislation that gives the states money only if they comply with a condition that a majority of their own constituents would independently find unattractive.
The conditional offer of federal funds to the states suggested by President Clinton in response to United States v. Lopez directly supports this theory. At the time the President spoke, more than forty states had already enacted prohibitions on the possession of guns in or near schools. Thus, only a (small) minority of states would be posed a choice by the President’s suggested offer of federal funds, and the representatives of those states would likely have scant ability within the political process to prevent the legislation’s passage. Their best hope would be to trade votes with the requisite number of members of the majority coalition, exchanging their support on a matter of greater concern to those states for help in opposing the condition on federal funds. Of course, the likelihood of success of such a vote trading effort is positively correlated with the number and size of states in the minority coalition.
One question remains: Why would a state’s congressional representatives ever prefer to enact a conditional rather than an unconditional offer of federal funds to the states, including their own? Several possibilities merit discussion. To begin, legislators might support a conditional offer of funds in order to “entice” outlier states into amending or adopting some provision(s) of state constitutional or statutory law. To the extent that Congress, at least after New York and Lopez, cannot always directly regulate the states in the ways it might prefer, an offer of appropriately conditioned federal funds may be the only means to certain regulatory ends. By proposing or supporting legislation to lure outlier states into adopting these regulations, individual legislators may garner the approval of “single issue” voters and interest groups who may provide re-election votes as well as nationwide financial and other support for their next campaign.
In addition, legislators might thus win the votes of rationally self-interested constituents who believe that certain activities in another state impose negative externalities on them. Consider, for example, the federal regulation at issue in South Dakota v. Dole. Voters in a state that, consistent with the regulation, already prohibited “the purchase or public possession . . . of any alcoholic beverage by a person who is less than twenty-one years of age” might reasonably believe that there would be fewer alcohol-related accidents on their own state’s highways if their young residents no longer had an incentive to commute to border states where the drinking age is lower and, therefore, were less likely “to combine their desire to drink with their ability to drive.”
Sometimes members of Congress might support conditional funding legislation not in order to encourage interstate conformity in some area, but in the hope that some state(s) might decline the offer of federal funds. States that forego the conditional federal revenue enable the other states to profit at their expense. By not receiving their proportionate share of the funds offered under the conditional grant, such states leave more money in the federal fisc for other purposes, and thus may well receive a smaller share of the total federal pie in a given year than they would have if they had accepted the conditional offer.
Whatever a particular legislator’s motivation might be, supporting a conditional grant of federal funds to the states is likely to make her state (and therefore herself) better off, and should only rarely make it (and herself) worse off, if her state already complies, or without financial inducement would happily comply, with the funding condition. For these states and their congressional representatives, a vote in favor of the conditional grant is nearly always a vote to impose a burden solely on other states. Whether a state that is not already in compliance chooses to decline the offer of federal funds or to acquiesce in the stated condition, those states already in compliance may well improve, and will only rarely worsen, their competitive position relative to that state.
It is also worth noting that insofar as conditional federal spending legislation is simply a particular form of special legislation or “pork,” the allocation of representation (and therefore also coalition-building power) in the Senate will affect its distribution as well. As in the case of other fiscal legislation, one would expect the small states to benefit disproportionately–and the large states to be disadvantaged disproportionately–by conditional offers of federal funds to the states. Thus, it seems clear that the state-based allocation of congressional representation can neither protect the large states against autonomy-infringing, conditional federal spending nor prevent the concomitant reduction in aggregate social welfare.
B. Amending the Constitution
A second possible way to restore limits on Congress’s spending power is by the adoption of a constitutional amendment. In recent years, scholars interested to curtail the rise of the special interest state have in fact proposed amendments that, for example, would require the consent of a supermajority to pass certain spending legislation. In addition, Congress itself has considered amendments, such as the Balanced Budget Amendment, that would impose limits on its spending power.
The analysis provided in Part I above, however, suggests that all these amendment possibilities are highly likely to remain no more than that. In that Part, I demonstrated that the existing rules governing the enactment of conditional and all other federal spending legislation have a clearly identifiable group of systematic beneficiaries–the small population states that are afforded disproportionately great (because equal) representation in the Senate, and therefore also in Congress, relative to their shares of the nation’s population. Based on the 1990 Census, thirty-two states currently are over-represented in the Senate. Each might be expected to oppose the adoption of a constitutional amendment that would adversely affect its continued ability to obtain a disproportionately large share of the federal “pie.” Under Article V, the consent of two-thirds of the Senate (or a convention called by two-thirds of the state legislatures) is necessary even to propose an amendment, and ratification by three-fourths of the states is required for adoption. Thus, if the senators (or legislatures) from as few as seventeen of these thirty-two over-represented states opposed the proposal of an amendment, or as few as thirteen states opposed ratification, the continuation of the existing regime would be ensured.
In order for an amendment limiting Congress’s spending power to have any chance at adoption, therefore, its proponents would need to persuade a substantial number of the states that clearly benefit from the existing regime that they would do even better under the proposed regime. This would require the amendment’s proponents to demonstrate not only that aggregate social welfare would increase if the amendment were adopted, but also that at least twenty of the thirty-two states that disproportionately benefit from the existing regime would each experience an increase in aggregate welfare notwithstanding the anticipated loss of federal redistribution in their favor. Moreover, to the extent that particular interest groups might have disproportionately great power within particular states (e.g., farmers in Iowa and Nebraska, the dairy industry in Wisconsin), the amendment’s proponents similarly would need to persuade these interest groups that they would each experience an increase in aggregate welfare notwithstanding the anticipated loss of federal redistribution in their favor if the amendment were adopted. I am far from sanguine that proponents of such an amendment could provide the relevant states and interest groups persuasive evidence on this score.
III. Why Has the Modern Court Declined to Play a Role?
The Framers did not intend for Congress’s spending power to be unlimited and, as we have seen above, imposing the proper constraint on the spending power will increase aggregate social welfare in any case. The analysis in Part II makes clear that neither the protections of the federal political process nor the constitutional amendment process is likely to yield effective limits on the congressional spending power. And one is left to conclude that the only meaningful solution lies in judicial review under the existing Spending Clause.
In this regard, the Court could simply consider justiciable the “general Welfare” limitation in the text of the Spending Clause, and could invalidate any challenged spending legislation that it concluded did not “provide for the common Defence and general Welfare of the United States.” Since 1936, however, the Court has proclaimed, increasingly emphatically, that it does not believe it can or should undertake this task, and that “[i]t is for Congress to decide which expenditures will promote the general welfare.”
Thus, the interesting question becomes why the Court has taken this position. The question merits discussion not only as an academic matter, but also because understanding the Court’s view is a necessary step in persuading the Court that it should change it. Three possibilities seem especially worthy of further consideration: (1) that the Court’s unwillingness to constrain Congress’s power in this area is simply a vestige of the New Deal era that has outlived any arguable usefulness; (2) that the Court believes that the exercise of the spending power is better left to the politically accountable branches of the federal government; or (3) that the federal appropriations process does not readily lend itself to traditional judicial review.
It is possible that the Court’s unwillingness to review Congress’s spending decisions continues today largely as a matter of unfortunate habit formed during the New Deal era. To the extent that a major reason for constraining the spending power is to protect state autonomy, the latter was the very antithesis of the New Deal agenda. Having set out down the road of nonjusticiability, the Court today may simply find this the path of least resistance (or, at least, the path of least work). Of course, the same might have been said of the Court’s treatment of the commerce power prior to Lopez. The spending power seems no less worthy of re-examination by the Rehnquist Court. And one might therefore hope that the current Court will soon undertake this task or, at least, explain why it believes the spending power is different.
A second possibility is that the Court simply believes that the exercise of the spending power is best left solely to the politically accountable branches of the federal government. If the voter-taxpayer is unhappy with Congress’s spending decisions she can simply “vote the bums out.” As the discussion in Part I above showed, however, political accountability does not play the role one might hope in increasing aggregate social welfare under the spending clause. On election day, each voter faces a prisoner’s dilemma in which the individually rational strategy is not to vote out one’s representatives if they are successful in obtaining rent-seeking legislation that benefits their home district and constituents, but rather to vote them out if they do not obtain such legislation. Such legislation, unfortunately, is highly likely to be aggregate-welfare reducing. Thus, political “accountability” in this context has the utterly perverse effect of exacerbating the problem rather than mitigating it. It is precisely because the Court is not politically accountable in the same way that it alone can stop the otherwise inevitable “race to the bottom.” Why, then, does the Court refuse to seize this uniquely important opportunity?
A third possibility is that the Court considers judicial review of Congress’s spending decisions to be unworkable because of the nature of the federal appropriations process. It is undoubtedly true that the special nature and importance of appropriations legislation raises a host of unique issues. For example, should a lawsuit be limited to challenging a single “line item” of an appropriations bill? What should the status of the challenged appropriation be while the challenge proceeds through the courts? And should such challenges be heard on an expedited basis?
The fact that judicial review of such legislation raises unique and possibly difficult issues, however, would not seem alone to be a legitimate reason for the courts to abrogate their constitutional duty. In permitting taxpayers to have standing to challenge congressional expenditures as violations of the Establishment Clause of the First Amendment, the Court in Flast v. Cohen was unperturbed by such practical concerns: “we feel confident that the questions will be framed with the necessary specificity, that the issues will be contested with the necessary adverseness and that the litigation will be pursued with the necessary vigor to assure that the constitutional challenge will be made in a form traditionally thought to be capable of judicial resolution.” In addition, one wonders whether critics of judicial review in the spending context would as readily embrace a declaration by the Court that the “free speech” clause of the First Amendment will henceforth be nonjusticiable because of the difficult and novel practical and jurisprudential issues posed by the Internet and cyberspace.
Finally, it is significant that in recent decades the federal courts have been willing to take on enormously complex institutional reform litigation ranging from school desegregation to prison overcrowding. The role of the courts in these cases has been at least as innovative and potentially rife with practical difficulties as those likely to be encountered in judicial review of federal spending legislation. All of this suggests that the issue ultimately may be the Court’s willingness, rather than ability, to limit Congress’s spending power.
Since 1936, the Supreme Court has increasingly emphatically declared that it considers nonjusticiable any limitation on congressional power that the Spending Clause may contain. During this same period, federal spending has undergone a transformation “from a modest budget devoted to public interest goods into a vast engine for the production of private interest goods.” Commentators and members of Congress alike have decried “the rise and rise” of the special interest state, yet the rise continues unabated.
In this Article, I have sought to explain both the mechanism that powers the special interest state to the detriment of state autonomy and why neither the protections of the federal political process nor the constitutional amendment process is today likely to yield effective limits on the congressional spending power. This analysis leads to the inescapable conclusion that the only meaningful solution lies in judicial review under the existing Spending Clause, yet the modern Court has aggressively resisted playing any role in this area. I have speculated on three plausible reasons for the Court’s reluctance to enforce the Constitution’s limits on Congress’s spending power, and have found none to be especially persuasive.
Perhaps, then, the Court simply has not appreciated either the threat posed to state autonomy by an unfettered congressional spending power or the uniquely beneficial role that judicial review might play in this area. If so, then by enlightening the Court this Article may also, and more importantly, rouse it to action.
My thanks to Professor John Eastman for inviting me to participate, to the Chapman faculty and students for their gracious hospitality, and to the conference panelists and participants for a day of stimulating intellectual exchange. I am grateful to the Editors of the Chapman Law Review, especially Richard Tilley and Yvonne Dalton, for their hard work and good cheer throughout the editorial process. University of Texas Law Librarian, Keith Stiverson, went well beyond the call of duty in expeditiously locating various source materials. An earlier version of portions of this Article was presented at the Annual Meeting of the American Political Science Association, Cornell Law School, the University of Iowa College of Law, the University of Virginia School of Law, and the Vanderbilt University Law School; I am grateful for the helpful comments received on each of those occasions.
Special thanks to Sam Dinkin, Ph.D., for assistance both with statistical analysis and with our two-year-old daughter, Mahria.
When such a contention [that a law fails to conform to the limits set upon the use of a granted power] comes here we naturally require a showing that by no reasonable possibility can the challenged legislation fall within the wide range of discretion permitted to the Congress. How great is the extent of that range, when the subject is the promotion of the general welfare of the United States, we need hardly remark. But, despite the breadth of the legislative discretion, our duty to hear and to render judgment remains.
Id. at 67 (emphasis added). The following year, in Helvering v. Davis, 301 U.S. 619 (1937), the Court reiterated the “no reasonable possibility” standard first articulated in Butler, see id. at 641, and added that the discretion afforded by the “general welfare” language of the Spending Clause “belongs to Congress, unless the choice is clearly wrong, a display of arbitrary power, not an exercise of judgment.” Id. at 640 (emphasis added).
By 1976, the Court was willing to state that it considered the “general welfare” language to provide no constraint at all on Congress’s spending power:
Appellants’ “general welfare” contention erroneously treats the General Welfare Clause as a limitation upon congressional power. It is rather a grant of power, the scope of which is quite expansive, particularly in view of the enlargement of power by the Necessary and Proper Clause …. It is for Congress to decide which expenditures will promote the general welfare: “[T]he power of Congress to authorize expenditure of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution.” … Any limitations upon the exercise of that granted power must be found elsewhere in the Constitution …. Whether the chosen means appear “bad,” “unwise,” or “unworkable” to us is irrelevant; Congress has concluded that the means are “necessary and proper” to promote the general welfare, and we thus decline to find this legislation without the grant of power in Art. I, § 8.
Buckley v. Valeo, 424 U.S. 1, 90-91 (1976) (per curiam). Finally, in South Dakota v. Dole, 483 U.S. 203 (1987), the Court observed that the level of judicial deference required under the Spending Clause was so great that it “questioned whether ‘general welfare’ is a judicially enforceable restriction at all.” Id. at 207 n.2.
But see Flast v. Cohen, 392 U.S. 83, 85 (1968) (describing Frothingham as standing for 45 years as “an impenetrable barrier to suits against Acts of Congress brought by individuals who can assert only the interest of federal taxpayers,” and holding that “the Frothingham barrier should be lowered when a taxpayer attacks a federal statute on the ground that it violates the Establishment [Clause]”). See also Richard Epstein, Standing and Spending– The Role of Legal and Equitable Principles, 4 Chap. L. Rev 1, 4 (2001) (contending, inter alia, that “doctrine of standing in American constitutional law was crafted by the progressives who were anxious to insure that their political initiatives … could be shielded from judicial attack”). But see Cass R. Sunstein, Standing and the Privatization of Public Law, 88 Colum. L. Rev. 1432, 1434-36 (1988) (describing evolution of standing doctrine as an attempt to restore common law entitlements of Lochner era); Cass R. Sunstein, What’s Standing After Lujan? Of Citizen Suits, “Injuries,” and Article III, 91 Mich. L. Rev. 163, 178-197 (1992) (tracing history of standing).
The immediate dollar cost of going to a movie instead of studying is the price of a ticket, but the opportunity cost also includes the possibility of getting a higher grade on the exam. The opportunity costs of a decision include all its consequences, whether they reflect monetary transactions or not.
Decisions have opportunity costs because choosing one thing in a world of scarcity means giving up something else. The opportunity cost is the value of the good or service forgone.
Paul A. Samuelson & William D. Nordhaus, Economics 128 (16th ed. 1998) (emphasis omitted).
In practice, however, proponents of legislation will strive to secure a supermajority of votes, largely because of the uncertainty under which pre-vote lobbying and logrolling takes place: the outcome of the final vote cannot be known in advance. In this context, political scientist R. Douglas Arnold has observed:
All else equal, [legislative] leaders prefer large coalitions because they provide the best insurance for the future. Each proposal must survive a long series of majoritarian tests–in committees and subcommittees, in House and Senate, and in authorization, appropriations, and budget bills. Large majorities help to insure that a bill clears these hurdles with ease.
R. Douglas Arnold, The Logic of Congressional Action 117-18 (1990) (emphasis added) [hereinafter Arnold, Logic]; see also R. Douglas Arnold, Congress and the Bureaucracy: A Theory of Influence 43, 52 (1979) (Legislators seek supermajorities “because a whole series of majorities are required, one at each stage of the congressional process …. [and] they want to minimize risks of miscalculation or last-minute changes.”) [hereinafter Arnold, Theory]; David R. Mayhew, Congress: The Electoral Connection 111-15 & n.67 (1974) (frequency distribution data indicate that House and Senate roll call votes “are bimodal, with a mode in the marginal range (50-59.9 percent) and a mode in the unanimity or near-unanimity range (90-100 percent)”; similar patterns have been observed in state legislatures). But see William H. Riker, The Theory of Political Coalitions 32-101 (1962) (arguing that in American politics, parties seek to increase votes only until they achieve the minimum necessary to form a winning coalition).
This expectation must be modified slightly, however, in light of the fact that the President is not elected directly by the People, but rather by the electoral college which gives different weights to the votes of residents of different states. See U.S. Const. art. II, § 1, cl. 2-3. By affording each state “a Number of Electors, equal to the whole Number of Senators and Representatives to which the State may be entitled in the Congress,” U.S. Const. art. II, § 1, cl. 2, the Constitution gives the small states a disproportionately greater power to choose the President, relative to their share of the nation’s population. Thus, although California, for example, currently has 69 times the population of Wyoming (33,145,121 versus 479,602), it has only 18 times as many presidential Electors ((52 Reps. + 2 Senators = 54) versus (1 Rep. + 2 Senators = 3)). See The Council of State Gov’ts, 33 The Book of the States 464-65 tbl.10.3 (2000-01 ed.) [ [hereinafter The Book of the States].
This in turn means that the President, who needs 270 electoral votes in order to be (re)elected, may formally represent only the 45.4% of the nation’s population that resides in the 40 smallest states. See U.S. Census Bureau, Statistical Abstract of the United States: 2000, at 23, tbl. 20 (120th ed.) [hereinafter Statistical Abstract].
There are 100 players (Senators) in the Senate. Thus, there are 100! possible orderings in which a vote can take place. Because each player has the same number of votes (one) on a given piece of proposed legislation, each player has the same likelihood of being the swing vote. And, since each state is represented by the same number of players (two Senators), each state has the same likelihood of being the swing vote. Calculated precisely, each state has a 2-in-100 chance to be the swing vote on any given piece of proposed legislation, and each state’s Shapley-Shubik index is therefore .02.
Although in this instance each state’s (and each player’s) Shapley-Shubik index is the same as its voting strength, that will not always be the case. Indeed, a major contribution of the Shapley-Shubik index is to demonstrate the erroneousness of the common intuition that the a priori power distribution inherent in a given apportionment of voting strength is always a trivial function of the nominal voting strengths. In particular, the Shapley-Shubik index shows that large weighted majority games (such as the electoral college) give a disproportionate power advantage to the big players, and that some voters may be incapable of affecting the outcome of any proposed legislation even though they have a vote. The former finding is presented in Irwin Mann & L.S. Shapley, The A Priori Voting Strength of the Electoral College, in Game Theory and Related Approaches to Social Behavior, 151-64 (Martin Shubik ed., 1964) (demonstrating that states with 16 or more votes in the electoral college have a Shapley-Shubik index slightly greater than their number of votes, while states with 14 or fewer votes have a Shapley-Shubik index slightly smaller than their number of votes). The latter finding is demonstrated by the following example:
Consider a game with four players (or coalitions) – A, B, C, d – with votes of 2, 2, 2, and 1, respectively. A simple majority of four votes is needed to carry a motion. In each of the 24 (4!) possible orderings of the four players, the pivot is italicized:
Robert Sugden explains that a Condorcet choice provides the only “core solution” to the logrolling game:
An outcome is said to be in the core of a game if it cannot be blocked by any coalition of players. Given the assumption that all preferences take the form of strict orderings, a coalition of players blocks one outcome, x, if there is some other alternative, y, such that (i) every member of the coalition prefers y to x, and (ii) by the rules of the game, concerted action by the members of the coalition can ensure that y is the outcome of the game, irrespective of what non-members do …. [A]n alternative, x, is in the core of the majority rule game if and only if, for every other feasible alternative, y, a majority of voters prefer x to y. This of course is Condorcet’s criterion. The core of the game is identical with the Condorcet choice.
Robert Sugden, The Political Economy of Public Choice: An Introduction to Welfare Economics 148 (1981).
In the following example, alternative 1 is the Condorcet winner, even though only A prefers it to all other alternatives, because both A and B prefer 1 to 3, and both A and C prefer 1 to 2:
These sorts of restrictions are relevant to my analysis only insofar as they may indicate that a state, implicitly or explicitly, has chosen to rely more heavily on federal largesse, conditions and all. That is, these self-imposed restrictions on the raising of revenue are also part of the package of goods and services which a state offers to its residents and potential residents.
[W]e deem it clear, upon principle as well as authority, that just as a State may impose general income taxes upon its own citizens and residents whose persons are subject to its control, it may, as a necessary consequence, levy a duty of like character, and not more onerous in its effect, upon incomes accruing to non-residents from their property or business within the State, or their occupations carried on therein ….
See also International Harvester Co. v. Wisconsin Dep’t of Taxation, 322 U.S. 435, 441 (1944); 1 Jerome R. Hellerstein & Walter Hellerstein, State Taxation: Corporate Income and Franchise Taxes PP 6.4- 6.8 (2d ed. 1993); 2 Jerome R. Hellerstein & Walter Hellerstein, State Taxation: Sales and Use, Personal Income, and Death and Gift Taxes PP 20.15 to 20.33 (1992).
The Sixteenth Amendment, establishing the income tax, effectively gave the national government unlimited control of the nation’s wealth and, consequently, a virtually unlimited spending power…. By extracting money from the now-defenseless states and offering to return it with strings attached, the national government is able to control by promises of reward– some would say bribery–whatever it might be unable or unwilling to control by threat of punishment.
Lino A. Graglia, From Federal Union to National Monolith: Mileposts in the Demise of American Federalism, 16 Harv. J.L. & Pub. Pol’y 129, 130-31 (1993); see also Thomas R. McCoy & Barry Friedman, Conditional Spending: Federalism’s Trojan Horse, 1988 Sup. Ct. Rev. 85, 124 (“[F]or most states’ voters the only real question is how much they can get back in federal financial handouts. There is no immediate sense that it is their own money being returned to them with strings attached and that the net effect of the money’s round trip to Washington is simply to carry the regulatory strings with it back to the state.” (emphasis added)).
At present, several states have statutes that provide protection against various forms of discrimination on the basis of sexual orientation while federal law does not. Compare, for example, Conn. Gen. Stat. § 46a-81e (1999) (prohibiting housing discrimination on the basis of sexual orientation) and Haw. Rev. Stat. § 368-1 (1999) (prohibiting housing discrimination on the basis of sexual orientation) with 42 U.S.C. § 3604 (2000) (prohibiting housing discrimination only on the basis of “race, color, religion, sex, familial status, or national origin”–with “familial status” referring not to sexual orientation but to “one or more individuals (who have not attained the age of 18 years) being domiciled with (1) a parent or another person having legal custody of such individual or individuals; or (2) the designee of such parent or other person having such custody.” Id. at § 3602(k)). And compare Cal. Lab. Code § 1102.1 (2000) (prohibiting employment discrimination on the basis of sexual orientation) and Haw. Gen. Stat. § 368-1 (2000) (prohibiting employment discrimination on the basis of sexual orientation) with 42 U.S.C. § 2000e-2 (2000) (prohibiting employment discrimination only on the basis of “race, color, religion, sex, or national origin”) and 29 U.S.C. § 623 (2000) (prohibiting employment discrimination on the basis of age).
Although Wechsler focuses on the state-based allocation of representation in Congress, he nonetheless suggests that oppression by the “national authority,” rather than the oppression of some states by other states, is the problem which the structure of representation avoids. See Wechsler, supra note 75, at 558 (The national political process “is intrinsically well adapted to retarding or restraining new intrusions by the center on the domain of the states.”) (emphasis added).
Thus, ceteris paribus, a member of Congress should prefer to support legislation that gives the states money if they comply with a condition that a majority of her constituents find unproblematic, if not positively attractive, rather than identical legislation that imposes a condition that a majority of her constituents would otherwise find unattractive or even oppressive. Of course, other things are not always equal, and an individual legislator may nonetheless choose to support conditional funding legislation of the latter sort if she predicts that the benefits to her, in terms of reelection campaign contributions and other support from state or national interest groups will outweigh the costs, in terms of lost votes and other support within her district. Or a legislator may sometimes choose to express a preference at odds with that of a majority of her electorate and support conditional funding legislation of the latter sort, especially if she does not believe her reelection to be at risk. See, e.g., Arnold, Logic, supra note 16, at 5; Richard F. Fenno, Jr., Congressmen in Committees 1 (1973). In recent years, a lively academic debate has grown up around the extent to which legislators enact their own ideological preferences rather than those of interest groups or their constituents. See, e.g., Baker, Direct Democracy, supra note 26 at 740 n.117 (1991); Farber & Frickey, supra note 40, at 27; Jerry L. Mashaw, The Economics of Politics and the Understanding of Public Law, 65 Chi.-Kent L. Rev. 123, 143-50 (1989).
The classic discussion of vote trading or logrolling is Buchanan & Tullock, supra note 17, at 131-45; see also Baker, Direct Democracy, supra note 26 at 721-32; Gillette & Baker, supra note 64, at 268-72.
By the “size” of states is meant their population. This variable matters in any discussion of vote trading in Congress because population determines the number of representatives and, therefore, votes that a state will have in the House. See supra note 27.
In recent years, highly controversial candidates for governor and the U.S. Senate, notably David Duke and Oliver North, have received as much financial and other campaign support from outside their respective states as from within. On David Duke, see, e.g., Susan Gilmore, Hundreds in State Donated to Duke, Seattle Times, Nov. 29, 1991, at C1 (“More than 200 Washington state residents gave more than $11,000 to David Duke’s unsuccessful race …”); Anthony Lewis, Abroad at Home: ‘America Be on Guard,’ N.Y. Times, Nov. 19, 1991, at A15 (47% of Duke’s total campaign contributions were from people in 45 states other than Louisiana). On Oliver North, see, e.g., Margaret Edds, North Still Asking Faithful Followers to Dig a Little Deeper, Roanoke Times & World News, Nov. 16, 1994, at C1 (North raised more money than any candidate in U.S. Senate history, almost $20 million, from more than 200,000 contributors nationwide); Michael Ross, Another Epic Battle Plays Out in Virginia, L.A. Times, Nov. 4, 1994, at A20 (“North has raised more money–$17.6 million–than any other Senate candidate this year, most of it from out of state”); see also Andrew Mollison, Outside funds are politics as usual; Study tracks cash for hot state races, Atlanta Journal & Constitution, Nov. 18, 1991, at A3 (“a big surge of private funds across state lines for important U.S. Senate and gubernatorial races is politics as usual, according to nine-state study”).
The growth of political parties as national rather than local sources of political influence may also be a factor in the rise of nationwide support for candidates in statewide elections. See, e.g., John H. Aldrich, Why Parties? The Origin and Transformation of Political Parties in America 15 (1995) (arguing that “the party provides more support [of all kinds] than any other organization for all but a very few candidates for national and state offices” (emphasis added)); L. Sandy Maisel, Political Parties in a Nonparty Era: Adapting to a New Role, in Parties and Politics in American History 259, 269 (L. Sandy Maisel & William G. Shade eds., 1994) (“[E]ach party has used opportunities … to mount unified, coordinated campaigns throughout the country and thus the national parties have been able to finance local efforts.”); John S. Saloma III & Frederick H. Sontag, Parties: The Real Opportunity for Effective Citizen Politics (1972); Michael A. Fitts, Can Ignorance Be Bliss? Imperfect Information as a Positive Influence in Political Institutions, 88 Mich. L. Rev. 917 (1990); Michael A. Fitts, The Vices of Virtue: A Political Party Perspective on Civic Virtue Reforms of the Legislative Process, 136 U. Pa. L. Rev. 1567 (1988); Kaden, supra note 79, at 859-60, 862-67; Jonathan R. Macey, The Role of the Democratic and Republican Parties as Organizers of Shadow Interest Groups, 89 Mich. L. Rev. 1 (1990).
South Dakota must continue to pay the same level of taxes, even though the money it contributes is diverted to other states. The offer of assistance is not an isolated transaction, but must (as with the thief who will resell stolen goods to its [sic] true owner) be nested in its larger coercive context. The situation in Dole is scarcely distinguishable from one in which Congress says that it will impose a tax of x percent on a state that does not comply with its alcohol regulations–a rule that is wholly inconsistent with the preservation of any independent domain of state power. The grant of discretion, therefore, allows the federal government to redistribute revenues, raised by taxes across the nation, from those states that wish to assert their independence under the Twenty-first Amendment, to those states that do not.
Richard A. Epstein, Bargaining with the State 152 (1993).
In addition, Congress recently considered an amendment to require a two-thirds vote to raise taxes. The House defeated this proposed amendment by a vote of 233 to 199 in favor of adoption. See 143 Cong. Rec. H1,491, H1,506 (daily ed. Apr. 15, 1997).