Federalism and the Federal Government:
A policy white paper on reasserting Texas’ role within the federal system
Texas Conservative Coalition Research Institute
February 2013
For more information about any of the recommendations contained in this document, please contact
the Texas Conservative Coalition Research Institute:
Texas Conservative Coalition Research Institute
P.O. Box 2659, Austin, TX 78768
(512) 474-6042
www.txccri.org
The contents of this document do not represent an endorsement from any individual member of the
Texas Conservative Coalition Research Institute Board of Directors.
There may be some policy recommendations or statements of philosophy that individual members are
unable to support. We recognize and respect their position and greatly appreciate the work of everyone
involved in the organization.
Copyright 2013 Texas Conservative Coalition Research Institute, all rights reserved.
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Contents
Summary of Recommendations
Page 4
Background
Page 5
Recommendation 1:
Reject Medicaid Expansion and State “Exchange”
Page 10
Recommendation 2:
A Federal Balanced Budget Amendment
Page 13
Recommendation 3:
Prohibiting Judicial Taxation
Page 15
Recommendation 4:
Unfunded Federal Mandates
Page 19
Conclusion
Page 22
Endnotes
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Summary of Recommendations
Advocate for greater checks on the power and authority of the federal government by:
1) Declining Medicaid expansion, refusing to set up an “Exchange,” passing health
care freedom legislation, and publicly supporting legal challenges against the
Patient Protection and Affordable Care Act;
2) Calling on Congress to adopt a balanced budget amendment to the United States
Constitution and continuing to call for a Constitutional Convention to the same
end;
3) Passing a resolution calling for an amendment to the United States Constitution
providing that no court may impose a tax, or require a state or local government
to impose, collect, or raise a tax, and calling for Constitutional Convention to the
same end; and
4) Passing a Resolution calling for an amendment to the United States Constitution
prohibiting the federal government from enacting any unfunded mandates, and
calling for a Constitutional Convention to the same end.
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Background
The United States Constitution was adopted by those who were fearful of tyranny and mindful of the
dangers posed by an all-powerful central government. Accordingly, the structure of the federal
government, as defined in the Constitution, is one where enumerated powers are spread across three
branches. All powers not granted to the federal government are left to the states and to the people, from
whom it derives its authority.
James Madison, Alexander Hamilton, and John Jay expended considerable energy making the case for
ratification of the U.S. Constitution. Many were hesitant to create a new, powerful central government,
especially after having just concluded a war to get win independence from one. Madison, Hamilton, and
Jay systematically went through the Constitution, discussing each provision in detail, explaining what it
meant, how it would work, and why it was included. These writings are called The Federalist Papers, and
are essentially a roadmap for the document that many regard as the greatest vessel of liberty and
prosperity ever conceived by mankind.
In Federalist No. 45, James Madison wrote that “the powers delegated by the proposed Constitution to
the federal government are few and defined” and that those “powers reserved to the several States will
extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties
of the people, and the internal order, improvement, and prosperity of the State.”1
In the same letter, Madison argued that the Constitution provides limited power to the federal
government, and that the states retain their sovereignty over all other matters:
If the new Constitution be examined with accuracy and candor, it will be found that the change
which it proposes consists much less in the addition of NEW POWERS to the Union, than in the
invigoration of its ORIGINAL POWERS. The regulation of commerce, it is true, is a new power; but
that seems to be an addition which few oppose, and from which no apprehensions are
entertained. The powers relating to war and peace, armies and fleets, treaties and finance, with
the other more considerable powers, are all vested in the existing Congress by the articles of
Confederation.2 (Emphasis in the original text).
Similarly, in Federalist No. 84, Alexander Hamilton argued that a bill of rights, which was not included in
the proposed Constitution at that time, could ultimately be dangerous because it would “contain various
exceptions to powers not granted; and, on this very account, would afford a colorable pretext to claim
more than were granted. For why declare that things shall not be done which there is no power to do?”3
Hamilton went on to reflect on the “absurdity of providing against the abuse of an authority which was
not given.”
Hamilton’s warning that a bill of rights could indirectly provide a pretext for federal powers not explicitly
granted in the Constitution went unheeded, but both he and Madison agreed that the powers granted to
the federal government were limited to those specifically enumerated, and that states retain authority
over all other areas. When the Bill of Rights was ultimately adopted in 1791, the Tenth Amendment
enshrined their position:
The powers not delegated to the United States by the Constitution, nor prohibited by it to the
States, are reserved to the States respectively, or to the people.
The Tenth Amendment codifies the right of states to govern themselves in respect to all matters that are
not explicitly delegated to the federal government in the Constitution, and the Supreme Court has a long
history of respecting the principles of federalism enshrined by it. Justice Owen Roberts, for example,
unambiguously stated in the Supreme Court’s 1931 United States v. Sprague decision that:
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The Tenth Amendment was intended to confirm the understanding of the people at the time the
Constitution was adopted, that powers not granted to the United States were reserved to the
states or to the people.4
This view has endured. In 1941, Justice Harlan Stone stated in a ruling that the Tenth Amendment is “a
truism that all is retained which has not been surrendered.” Continuing, he pointed out that the Tenth
Amendment was a declaration about the relationship between national and state government that had
already been established by the Constitution before the Amendment was ever adopted. It was meant to
“allay fears that the new national government might seek to exercise powers not granted, and that the
states might not be able to exercise fully their reserved powers.”5
Justice Thurgood Marshall shared the same view in a 1975 decision, stating that “[t]he Amendment
expressly declares the constitutional policy that Congress may not exercise power in a fashion that impairs
the States’ integrity or their ability to function effectively in a federal system.”6
With such broad agreement on what federalism and the Tenth Amendment mean, it is puzzling that the
distinction between the federal and state governments is increasingly ambiguous, with the federal
government assuming powers and authority not granted to it by the Constitution.
Erosion of the Tenth Amendment
Beginning in the 1930s and accelerating over subsequent decades, the federal government has gained
significant influence over matters that belong in the remit of the states. This is a trend with severe and
negative consequences across a wide range of areas. Increasing regulatory power, Congress’ spending
power, and abuse of the authority to regulate interstate commerce are but a few sources eroding
federalism. This relentless expansion at the federal level has nowhere to go but to continue beyond its
constitutional constraints and into the domain of state governments. Such growth necessitates a disdain
for federalism and disregard of the Tenth Amendment.
The Patient Protection and Affordable Care Act (PPACA), enacted by Congress and signed into law by
President Obama in March 2010, is only one recent example of this trend. It has expanded the federal
government’s role beyond anything our nation’s founders envisaged, beyond the scope of any prior
federal law, and most importantly, beyond its enumerated powers defined and constrained by the
Constitution.
The PPACA is the culmination of almost a century of entitlement state expansion. Even before the PPACA,
the growth of federal programs such as Medicaid and the State Children’s Health Insurance Program (SCHIP) placed the federal government at the center of every state’s healthcare system. Through federal
“matching” funds and states’ “maintenance of effort” requirements, these two programs have placed a
tremendous fiscal burden on states. In Texas, for example, the Medicaid program now costs
approximately $40 billion per biennium and is the second largest item in the entire state budget.
Estimates by the Texas Health and Human Services Commission and others indicate that the Medicaid
eligibility expansion provision of the PPACA will significantly increase the existing financial burden on
Texas over the next ten years.7
The federal government is also tightening its grip on states through environmental regulation. The 111th
Congress attempted to pass sweeping environmental regulation in the form of a national “cap and trade”
system.8 Though unsuccessful on the legislative side to date, the federal government has successfully
implemented many of its goals via the regulatory state, and continues to do so at an increasing rate. The
Environmental Protection Agency (EPA) has taken full advantage of a 2007 Supreme Court decision
holding that greenhouse gases are pollutants which the Agency may regulate under the Clean Air Act.9 In
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December of 2009, the EPA issued its “endangerment finding,” which declared that greenhouse gases
“[may reasonably] be anticipated to endanger public health.” With this decision, the Agency began
circumventing Congress in earnest, issuing a “tailpipe rule” which set limits on emissions from cars and
light trucks.10 A federal appeals court recently upheld such practices, finding that carbon dioxide is indeed
a public danger and, therefore, limitations on such emissions by the EPA are valid.11 Such a holding
removes another obstacle in the already clear path to broad regulations on emissions from vehicles,
power plants, refineries and factories. And while the EPA attacks carbon from one side, it attempts to
thwart state pursuits of nuclear energy—as an alternative, carbon-free power source—from the other.
Such tactics show that the EPA truly operates in the manner its former Administrator for the South Central
Region bragged:
The Romans used to conquer little villages in the Mediterranean. They'd go into a little Turkish
town somewhere, they'd find the first five guys they saw and they would crucify them. And then
you know that town was really easy to manage for the next few years.12
In fact, Al Armendariz, the administrator who made that comment, was based in Texas and put that
philosophy into action when he attacked Forth Worth-based Range Resources for contaminating
groundwater in Parker County.13 The problem was that no evidence of this contamination existed, even
after a thorough investigation by the Texas Railroad Commission.14 Mr. Armendariz and the EPA were
forced by a federal court to withdraw their action against Range Resources, which they eventually did.15
Texas Railroad Commission Chairman Barry Smitherman, at the time, said the following:
By dropping their court case and enforcement actions, EPA now acknowledges what we at the
Railroad Commission have known for more than a year: Range Resources' Parker County gas
wells did not contaminate groundwater . . .This announcement is a vindication of the sciencebased processes at the Railroad Commission. It is good to see EPA reconsidering their tactics
after being rebuked.16
Regulatory authority is a problematic area, but the federal government also uses its spending power
under Article I, Section 8 of the Constitution to encroach on state territory. Through its spending power,
Congress may legally coerce states into submission by granting federal funds tied to certain conditions.
These conditions are not subject to the Congress’ enumerated powers in Article I because, technically,
the states are acting on their own authority.17 The oddity of the federal government having this power
is that it uses money collected from residents of each state through the federal income tax and uses
those funds as leverage against the elected leadership and residents of the states. It is akin to being
held up with your own firearm.
Furthermore, abuse of Congress’ spending power is enabled by vast sums of money collected via federal
income tax. The 16th Amendment, passed in 1913, provides that:
Congress shall have power to lay and collect taxes on incomes, from whatever source derived,
without apportionment among the several States, and without regard to any census or
enumeration.
At the time, the Washington Post called the 16th Amendment “an abhorrent and calamitous monstrosity,”
and argued that it “punishes everyone who rises above the rank of mediocrity.” Even the New York Times
once opposed a federal income tax, writing in 1864 that the idea was “an inequitable, unpopular,
impolitic, and socialist act.” 100 years later, feelings have changed so dramatically that the income tax is
the federal government’s main revenue source and most people can’t imagine what it would be like to
keep all of their earnings. It has enabled the federal government to grow large enough to affect nearly
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every aspect of life. If the political climate ever became favorable for repeal of the 16th Amendment, it
should be done.
The spending power has been used to coerce states into compliance on benign and onerous initiatives
alike. One example is the adoption of the National Minimum Drinking Age Act of 1984, which imposed a
ten percent withholding of federal highway funding on any state declining to enact and enforce a
minimum age of 21 years for purchase, possession, and consumption of alcohol.18 This worked, as all
fifty states eventually complied to receive the funds. When certain states challenged the alcohol age
law, it was ultimately upheld by the Supreme Court.19
There are, however, limitations to the spending power, and those limitations are based in federalism.
The Supreme Court recently held that portions of the Patient Protection and Affordable Care Act
(PPACA) relating to Medicaid expansion were illegitimate uses of the spending power.20 In ruling for the
first time ever that such a scheme was constitutionally impermissible under Congress’ spending power,
Justice Roberts and his majority won an important battle in the ongoing fight to keep federalism
relevant. Sadly, strapped-for-cash states hardly ever say no to federal funds. And in the vast majority of
these situations, the laws are never challenged in court. Therefore, states must be responsible when
deciding whether to comply and accept new revenue streams.
Furthermore, abuse of Congress’ spending power is enabled by vast sums of money collected via federal
income tax. The 16th Amendment, passed in 1913, provides that:
Congress shall have power to lay and collect taxes on incomes, from whatever source derived,
without apportionment among the several States, and without regard to any census or
enumeration.
At the time, the Washington Post called the 16th Amendment “an abhorrent and calamitous monstrosity,”
and argued that it “punishes everyone who rises above the rank of mediocrity.” Even the New York Times
once opposed a federal income tax, writing in 1864 that the idea was “an inequitable, unpopular,
impolitic, and socialist act.” 100 years later, feelings have changed so dramatically that the income tax is
the federal government’s main revenue source and most people can’t imagine what it would be like to
keep all of their earnings. Meanwhile, it has enabled the federal government to grow large enough to
affect nearly every aspect of life.
Federal education legislation such as the No Child Left Behind Act of 2001 and newer initiatives like “Race
to the Top” have also expanded federal power and influence over state policy. No Child Left Behind
(NCLB) made certain federal education funding to states contingent upon those states developing and
administering basic skills tests. State opposition to NCLB was almost unparalleled:
The extent of the opposition to NCLB legislation is unprecedented in its scope and depth . . . while
many of the resolutions protesting NCLB were symbolic, the number of states passing or
introducing them as well as the number of Republican states that opposed the legislation sent a
powerful political message to Washington.21
President Obama’s “Race to the Top” initiative (RTTT) is similar. RTTT made $4 billion in federal grants
available to states that enact education reforms specified by the U.S. Department of Education. These
reforms include specified standards and assessments that may differ significantly from standards that
states have already developed.22 Texas recently revamped its core curriculum, which involved a
substantial investment of state resources as well as large financial investment on the part of school
districts and the Texas Education Agency. Because submitting to different federal curriculum
requirements would undermine these investments, Governor Perry rejected RTTT funds, arguing that:
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Texas is on the right path toward improved education, and we would be foolish and irresponsible
to place our children’s future in the hands of unelected bureaucrats and special interest groups
thousands of miles away in Washington, virtually eliminating parents’ participation in their
children’s education.23
Indeed, these federal initiatives piled on top of one another amount to a federal takeover of education.
This runs contrary to the Tenth Amendment, which guarantees that states retain power over all matters
not delegated to the federal government in the Constitution. Notably, the Constitution does not mention
education, let alone a grant of authority for the federal government to control states’ public education
systems. Underscoring this point, the section of U.S. Code that established the U.S. Department of
Education clearly limits its authority accordingly:
[T]he establishment of the Department of Education shall not increase the authority of the Federal
Government over education or diminish the responsibility for education which is reserved to the
States and the local school systems and other instrumentalities of the States”24 (Emphasis added).
This section of federal law is still in effect today, yet NCLB and RTTT both increase federal influence over
states’ education policies, in clear violation of its language. The Texas Constitution also indicates that
these programs are out of bounds to the federal government. Its unambiguous language reads:
A general diffusion of knowledge being essential to the preservation of the liberties and rights of
the people, it shall be the duty of the Legislature of the State to establish and make suitable
provision for the support and maintenance of an efficient system of public free schools25
(Emphasis added).
The U.S. Constitution, U.S. Code, and the Texas Constitution are clear: The State of Texas is responsible for
its own public education system and the federal government has no basis for attempting to influence or
control that system.
The power grabs embedded in the PPACA, regulatory abuse, coercion via Congress’ spending authority,
and federalizing education are but a few examples of federal overreach contributing to the erosion of
federalist principles embodied by the Tenth Amendment. For a more direct approach, nowhere can
growth of the federal government be seen more clearly than in the number of new employees it has hired.
In December of 2008, the federal government employed more than 2.75 million people.26 Since President
Obama took office, the federal government has hired 143,000 federal workers for an average of 101 new
federal employees hired, every day.27
Such federal expansion has nowhere to go but outside of its constitutionally proscribed boundaries and
into areas of state responsibility. This constant encroachment into state policy has led many states to
pass resolutions reasserting their constitutional rights.28 The Texas House of Representatives passed such
a resolution during the 81st Legislative Session, affirming its constitutional rights under the 10th
Amendment to the United States Constitution, and putting the federal government on notice to cease and
desist actions which erode those rights.29
Legislative Action
Texas is fully capable of addressing its health care, environmental, and educational issues at the state level
(an assertion which is fully supported by legislation passed over the past decade, including the General
Appropriations Acts). Indeed, our federalist system of government demands it, and in the case of public
education, the Texas Constitution requires it. There are many things that Texas can do to reassert its
authority in these areas and these recommendations will each be discussed in greater detail below.
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For starters, Texas should resist implementing the Patient Protection and Affordable Care Act. The state is
under no obligation, legal or otherwise, to implement an “Exchange.” Nor is it required to accept the
expansion of Medicaid being offered. Both of these provisions are central to the Act. Refusing to
implement them would increase pressure on Congress to revisit the legislation. More importantly, Texas
is better off without these burdensome provisions.
Texas should also demand that Congress adopt a balanced budget amendment to the United States
Constitution. Reckless increases in federal spending affect states by burdening their current and future
citizens with crippling federal debt. By spending more than it takes in, Congress is also able to use its
spending power to coerce states into compliance with initiatives and programs it otherwise would not
have the resources to accomplish. The 83rd Legislature should adopt a resolution calling for Congress to
adopt such an amendment, but it should also call for an Article V Constitutional Convention for the same
purpose. Doing so would pressure Congress to act, while providing an alternate avenue to the balanced
budget amendment.
Likewise, Texas should pass a resolution calling for an amendment to the United States Constitution that
prevents the judiciary from imposing taxes, which according to the Constitution should already be
prohibited by virtue of that power being vested in Congress.
Finally, Texas should pass a resolution calling for an amendment to the United States Constitution that
prohibits the federal government from enacting and imposing unfunded mandates.
Moving forward, legislators need to consider these recommendations. Doing so will help to reaffirm
Texas’ Tenth Amendment rights and restore the balance to the federalist system of government that the
founders intended.
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RECOMMENDATION 1: Decline Medicaid expansion, refuse to set up an “Exchange,” pass health care
freedom legislation, and publicly supporting legal challenges against the Patient Protection and
Affordable Care Act.
In response to passage of the Patient Protection and Affordable Care Act (PPACA), Texas Attorney General
Greg Abbott joined with twelve other attorneys general in filing a lawsuit in opposition to the legislation.
The lawsuit asserted that numerous aspects of the federal legislation were unconstitutional, noting
especially that:
The Constitution nowhere authorizes the United States to mandate, either directly or under threat
of penalty, that all citizens and legal residents have qualifying healthcare coverage. By imposing
such a mandate, the Act exceeds the powers of the United States under Article I of the
Constitution and violates the Tenth Amendment to the Constitution.30
The Supreme Court ruled on these issues in National Federation of Independent Business v. Sebelius
(Sebelius), and a majority agreed with Attorney General Abbott and the law’s other challengers that the
Commerce Clause does not authorize a mandate to buy health insurance. Justice Roberts reasoned that
the individual mandate to purchase health insurance violated the Commerce Clause because “[t]he
Commerce Clause is not a general license to regulate an individual from cradle to grave, simply because he
will predictably engage in particular transactions. Any police power to regulate individuals as such, as
opposed to their activities, remains vested in the states.”31 (Emphasis added).
Despite this ruling on the Commerce Clause argument, Justice Roberts and a different majority of the
Court nonetheless upheld the PPACA’s individual mandate under Congress’ taxing power, also embedded
in Article I, Section 8 of the Constitution.32 Although the “Federal Government does not have the power
to order people to buy health insurance,” Justice Roberts stated, it “does have the power to impose a tax
on those without health insurance.” Therefore, the individual mandate is “constitutional, because it can
reasonably be read as a tax.”33
The ruling on the individual mandate is a crushing blow to individual liberty and federalism. From a
practical standpoint, it is not hard to expand on such a ruling and imagine the unlimited realm of actions
the federal government could impose on people while needing only the threat of a tax for noncompliance
to make the imposition constitutional. On this front, the future remains uncertain.
One final holding by the Supreme Court in Sebelius, however, may give states hope because it means that
Texas and others are under no obligation to accept the costly expansion of Medicaid, which remains a
central component of the PPACA. Although the Supreme Court upheld the individual mandate under the
Constitution’s taxing power, it struck down portions of the PPACA relating to Medicaid.34
Originally, the PPACA was written so that all federal funds for Medicaid would be withdrawn if states did
not accept its expansion.35 Through its spending power, Congress may grant funds tied to certain
conditions that would otherwise be unconstitutional.36 The Court has recognized, however, that if this
“pressure turns into compulsion,” the legislation runs contrary to our system of federalism and violates
the Constitution.37 In the case of the PPACA, funding was offered, but the condition was such that all
existing Medicaid funds would be withdrawn if expansion was not accepted.38 Chief Justice Roberts
described the Medicaid condition as putting “a gun to the head” of states because”[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.”39 Accordingly, for the first time in history, the
Court struck down a use of Congress’ spending power as incompatible with the Constitution. This leaves
states with the option of accepting or refusing Medicaid expansion without affecting current levels of
Medicaid funding.40
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Refusing Medicaid expansion would shield the state from significant financial burdens because, for
starters, the expansion would likely cost Texans $10 to $20 billion over the next ten years.41
Realistically, the fiscal issues in Washington will inevitably shift costs onto state budgets at an increasing
rate. Even President Obama has indicated that he sees such a shift occurring, including the cost of the
actual expansion presently at issue.42 The money may appear enticing, but Texas legislators should not
be lulled into the belief that the federal funding will be maintained, especially in the midst of a pressing
debt crisis in Washington. Washington’s insistence that the expansion is funded is nothing more than an
illusion. Unless the Congressional Budget Office certifies that the budget is balanced, expansion will
only add to the national debt. Thus, advocates of expansion would put the United States on more
perilous footing than it already stands.
In addition to declining Medicaid expansion, Texas should continue to decline setting up a health care
Exchange. Like the Medicaid expansion, Texas is under no obligation to create a healthcare Exchange
under the PPACA.43 The law was written in such a way that its drafters thought there would be sufficient
incentive for states to create Exchanges on their own. That has turned out to be untrue, and Texas is
currently one of 32 states that have refused to do so.44 Even though the federal government may set up
an Exchange for Texas residents to access, many of the PPACA’s worst provisions do not apply to
federally created exchanges. Refusing to set up an Exchange may shield many Texas businesses from an
employer mandate which amounts to a tax of more than $2,000 per worker.45 It could also protect
millions of Texans from the individual mandate, which amounts to a tax potentially as high as $2,085 for
a family of four earning $24,000.46 Texas may prevent the application of such provisions by simply doing
nothing, though a stronger position would be to affirmatively reject the expansion and the Exchanges
specifically through a statute or constitutional amendment.47
Many states have already passed such “health care freedom” legislation. In 2009, the Arizona
legislature passed legislation which the voters then approved as a constitutional amendment. It has two
core components: the first “protects a person’s right to participate or not in any health care system, and
prohibits the government from imposing fines or penalties on that person’s decision,” and the second
component “protects the right of individuals to purchase—and the right of doctors to provide—lawful
medical services without government fine or penalty.”48 Similar legislation has been passed in
Oklahoma, Wyoming, Alabama, and Virginia,49 and is being pursued in many other states.50
Texas should adopt a similar approach by passing a resolution to amend the Texas Constitution. Various
health care freedom bills were filed during the 82nd Legislative Session, but they did not pass.51 With the
PPACA still unpopular and not fully implemented, the 83rd should make another attempt to adopt similar
legislation. It should be noted that health care freedom legislation is not nullification of the PPACA.
Rather, it is simply a state-level response that rejects the authority of Congress to pass such legislation and
recognizes the right of citizens not to participate in the constitutionally void, federally-mandated system if
they do not wish to do so.
Declining to expand Medicaid and refusing to set up an Exchange will also buy time for more than twodozen lawsuits which are still working their way through federal courts.52 The Pacific Legal Foundation,
for example, has filed a meritorious suit based on the Origination Clause of the Constitution.53 Another
case challenges the constitutionality of the Independent Payment Advisory Board.54 There are also a
number of cases challenging the contraception mandate, including one in which a federal appeals court
already issued a temporary injunction on the mandate while the case works its way through the court
system.55 Texas should support all of these cases, but the suit that Legislators should publicly stand
behind is Oklahoma v. Sebelius.56
Oklahoma is challenging the “Final Rule,” issued by the IRS, which is an attempt to circumvent clear and
unambiguous language of the PPACA. This is especially important. The Final Rule, if implemented,
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would apply all provisions of the PPACA to federally-created Exchanges, when by the clear language of
the Act, they apply only to state-created Exchanges. If successful, the employer mandates, individual
mandates, and other harmful provisions would still apply, even if Exchanges are federally-created. To
quote from Oklahoma’s complaint:
[I]f the final rule is permitted to stand, federal subsidies will be paid under circumstances not
authorized by Congress; employers will be subjected to liabilities and obligations under
circumstances not authorized by Congress; and States will be deprived of the opportunity
created by the Act to choose for itself whether creating a competitive environment to promote
economic and job growth is better for its people than access to federal subsidies.57
Oklahoma’s case has merit and should be publicly supported by the State of Texas. If successful, the
case would enjoin the Final Rule and declare it invalid. This would stop the federal government’s
attempted end-around of the constraints imposed on it by the PPACA. The Final Rule not only violates
the clear language of the PPACA, but it flies in the face of federalism and state sovereignty.
Even if Oklahoma’s case fails, it will take time to work its way through the system. With the sticker
shock of rising premiums and inevitable dissatisfaction when implementation begins in earnest, the
PPACA’s unpopularity will only grow. There is already evidence that some of the law’s biggest
supporters— trade unions—are having second thoughts.58
The powers granted to the federal government are defined and constrained by the Constitution.
Federalist principles enshrined in the Constitution by the Ninth and Tenth Amendments mandate that
states and the people fill the remaining space. The framers understood that power should be spread as
thinly as possible in order to best protect liberty. Underscoring this point, former Supreme Court Justice
William Brennan once argued that “the legal revolution which has brought federal law to the fore must
not be allowed to inhibit the independent protective force of state law — for without it, the full realization
of our liberties cannot be guaranteed.”59
Accordingly, states have an affirmative duty to preserve their legitimate space in the power share. When
the federal government pushes, states should push back. In the case of the PPACA, Texas can do that by
refusing to implement the Act where it can, and supporting other states that do the same.
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RECOMMENDATION 2: Pass a resolution calling on Congress to adopt a balanced budget amendment
to the United States Constitution, and continue to pass resolutions calling for an Article V
Constitutional Convention to the same end.
At a campaign event in 2008, then Senator Barack Obama summed up his concern about the national
debt thusly:
The problem is, is that the way Bush has done it over the last eight years is to take out a credit
card from the Bank of China in the name of our children, driving up our national debt from $5
trillion dollars for the first 42 presidents-number 43 added $4 trillion dollars by his lonesome, so
that we now have over $9 trillion dollars of debt that we are going to have to pay back-$30,000
for every man, woman and child . . . That's irresponsible. It's unpatriotic.60
President Obama is the first president in history to run a trillion dollar deficit, and he’s done so every
year since he took office.61 The American Recovery and Reinvestment Act, more popularly known as
“the stimulus package,” was the largest single spending bill in history, totaling almost a trillion dollars.62
The food stamp program now has more than 46 million participants, roughly fifteen percent of the U.S.
population.63 The Senate Budget Committee recently reported that since President Obama took office,
75 people have entered the food stamp program for every person who has found a job.64 The President
effectively repealed the 1996 welfare reform passed by President Clinton and a Republican Congress,
one of the most successful entitlement reforms in history.65 At the end of his first term, the national
debt amounts to more than $16.4 trillion, with no end to deficit spending in sight.66
Perpetual deficits and growing national debt are of significant importance to states, their citizens, and
local governments. As long as the federal government may spend freely, there are few limits on what it
can accomplish, much of which includes coercion of states via Congress’ spending authority. From
Medicaid to costly environmental regulations, Congress uses its spending power to coerce states into
compliance when the Constitution otherwise does not grant such authority. Moreover, a national debt
of more than $16 trillion makes countless future generations liable for the debts of present-day
Americans. Unless the debt problem is addressed, states and individuals will find that the future is a
difficult place with considerably less opportunity and prosperity available than in generations past.
While the State of Texas operates within a spending limit contained in the Texas Constitution, the
United States Constitution has no spending limitation. It is the omission of such a limit that has allowed
the federal government to engage in reckless deficit spending, amassing record levels of debt that
taxpayers of the United States will spend generations trying to repay. President Obama is the greatest
offender, but he is not solely culpable. Since January 1983, Congress has raised the statutory limit on
public debt from approximately $1.3 trillion to nearly 16.4 trillion.67 This total increase of $15.1 trillion is
the result of dozens of debt ceiling measures spread out during the Reagan, H.W. Bush, Clinton, W.
Bush, and Obama presidencies. Even Republican majorities in Congress from 1995 to 2007 contributed,
approving eight debt increases during that period.68
One way to limit federal spending is to empower states with the ability to reject additional federal deficit
spending. That could be done by amending the United States Constitution to require majority approval
from state legislatures before Congress may increase the federal debt. HJR 55 (83 R) by House
Representative Murphy proposes that option. Another way to stop such reckless spending is by amending
the United States Constitution to require a balanced budget.
The United States Constitution, which by design is difficult to amend, was meant to be a permanent
statement of enduring rights and liberties. Alexander Hamilton knew this to be the case and he wrote in
the concluding paper of The Federalist that “the persons delegated to the administration of the national
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Federalism and the Federal Government | Texas Conservative Coalition Research Institute
government will always be disinclined to yield up any portion of the authority of which they were once
possessed.” This is why, he noted, when the federal government refuses to act in the national interest,
“we may safely rely on the disposition of the State legislatures to erect barriers against the
encroachments of the national authority.”
Accordingly, our Constitution gives states the power to address national problems when our federal
government refuses to yield. Article V provides an alternate path to amendment when Congress refuses
to act in the best interests of the country. An amendment must be considered if two thirds of state
legislatures call for a convention. Once a convention is called, the amendment is accepted if three
fourths of the state legislatures or state conventions ratify it.69
In the late 1970s and early 1980s, many states, including Texas, rallied for a federal balanced budget
amendment but fell short of the 34 applications required for an Article V convention. Texas, in fact, has
not rescinded the resolutions it passed and submitted to Congress in 1977 and 1978. One version of the
resolution would have required:
The total of all federal appropriations made by the Congress for any fiscal year may not exceed
the total of all estimated Federal revenues for that fiscal year.70
And it argued that:
The unbridled constitutional power of Congress to “borrow money on the credit of the United
States” has resulted in almost perennial deficit spending and the steady growth of a national debt
to a dangerous level . . . [B]ecause of the ability to spend now and pay much later, the federal
government has been willing to fund programs of questionable benefit and need.71
According to research compiled by the Friends of the Article V Convention, more than the requisite
number of states have already petitioned for a balanced budget, including Texas.72 The petition, however,
should be reissued by the 83nd Legislature so that it clearly calls for a constitutional convention on the
narrow topic of a balanced budget amendment. One of the reasons that a convention has not taken place
is because these petitions have accumulated over many years and vary in their scope. There is
disagreement over what an Article V convention should look like, which is one reason why such a
convention has never taken place. A petition with a narrow declaration would help avoid such
uncertainty, which is exemplified by the history of such requests:
The first state application for a balanced budget amendment was made by North Dakota in 1975,
and the thirty‐second was made by Missouri in 1983. The drive to request a convention then lost
momentum. Among the reasons for this slowdown were, once again, fears that a convention
could not be limited to a single subject, a decrease in the number of Republicans (who tended to
support the amendment more than Democrats) in state legislatures, and concern in the Northeast
about the loss of federal grants if the budget were balanced.73
Although the convention method has never been used to amend the Constitution, the threat has worked
in the past to prompt Congress to act. Petitioning states prompted such action in the cases of the
Seventeenth (election of U.S. Senators), Twenty-First (repeal of prohibition), Twenty-Second (Presidential
term limits), and Twenty-Fifth (Presidential succession) Amendments.74 Hopefully, a growing, vocal
movement to call a convention for the purpose of adopting a balanced budget amendment will get
Congress’ attention.
Though amending the Constitution has always been difficult, the preferable method should be the one
with a proven track-record, via congressional and state ratification. Republican Congresses have
attempted this in the past. The U.S. House of Representatives passed a balanced budget amendment in
2005, but the Senate fell one vote short, so it was never sent to the states for ratification.75 More
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recently, the House tried to pass a balanced budget amendment in 2011, but fell 23 votes short with 261
in favor and 165 voting against.76
Texas is among forty-five states that have some form of balanced budget amendment in their state
constitutions.77 Four other states have statutory balanced budget requirements.78 The only state with no
such provision is Vermont.79 Like Vermont, the federal government lacks any restriction on the amount of
taxpayer money it can spend. For spending that tax revenue does not cover, Congress borrows, and the
United States is at a point where it borrows 40 cents of every dollar it spends.80
If the federal government is allowed to continue growing, states will be further relegated to a backup role,
rather than the equal partner in governance they were intended to be by the founders. To prevent true
fiscal calamity and preserve prosperity for future generations, a balanced budget amendment should be
added to the U.S. Constitution. Texas should pass resolutions urging Congress to adopt one. In the
meantime, Texas should also call for a limited Article V Constitutional Convention to the same end. Other
states will follow if Congress does not act first.
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RECOMMENDATION 3: Pass a resolution calling for an Amendment to the United States Constitution
providing that no court of the United States may impose taxes or require governments to impose,
collect, or raise taxes. Texas should also call for a limited Article V Constitutional Convention to the
same end.
The House of Representatives cannot only refuse, but they alone can propose, the supplies
requisite for the support of government. They, in a word, hold the purse -- that powerful
instrument by which we behold, in the history of the British Constitution, an infant and humble
representation of the people gradually enlarging the sphere of its activity and importance, and
finally reducing, as far as it seems to have wished, all the overgrown prerogatives of the other
branches of the government. This power over the purse may, in fact, be regarded as the most
complete and effectual weapon with which any constitution can arm the immediate
representatives of the people, for obtaining a redress of every grievance, and for carrying into
effect every just and salutary measure.81
“[T]he power to tax involves the power to destroy.”82 The founding fathers were well aware of this
maxim when drafting the United States Constitution. After winning independence from Great Britain,
the United States adopted a Constitution that was designed to limit the powers of the federal
government, protect the sovereignty of states, and the natural rights of citizens.
The Constitution established a system of checks and balances designed to prevent any one branch from
amassing too much power. The power to raise revenues, perhaps the most important power of the
federal government, was vested exclusively in the House of Representatives.83
The founding fathers vested the taxing power exclusively with the House of Representatives because it
is the branch of the federal government most accountable to the people. Members of the House of
Representatives face reelection in comparatively small districts every two years. The biennial election
cycle requires Representatives to understand their constituent concerns more closely and allows citizens
to remove Representatives responsible for new taxes much more quickly than they could in the Senate.
This accountability was necessary to establish the legitimacy of the new government and its taxing
power. According to Elbridge Gerry, a Massachusetts delegate to the 1787 Constitutional Convention in
Philadelphia:
Taxation and representation are strongly associated in the minds of the people, and they will
not agree that any but their immediate representatives shall meddle with their purses.84
Vesting the taxing power solely with the House of Representatives was a vital part of the grand bargain
struck at the Philadelphia Convention.85 The taxing power was viewed as the power most prone for
abuse and, thus, the one that the states and people must have the greatest ability to limit.
In contrast to the House of Representatives, the Judiciary is commonly referred to as the least
accountable branch of the federal government. Federal judges and justices are appointed for life and
may not be removed except in extreme circumstances, nor may their compensation be diminished.86
Alexander Hamilton was unconcerned about this lack of accountability because the judiciary did not
have the power to act on its own. Judges possessed no enforcement mechanisms, they couldn’t write
legislation, and were not vested with the power to raise revenue or command an army. The judiciary’s
sole power and responsibility was to interpret the law. In Hamilton’s view, the judiciary was the least
dangerous branch of government:
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[T]he judiciary, from the nature of its functions, will always be the least dangerous to the
political rights of the Constitution . . . [because it] has no influence over either the sword or the
purse; no direction either of the strength or of the wealth of the society; and can take no active
resolution whatever. It may truly be said to have neither FORCE nor WILL, but merely judgment;
and must ultimately depend upon the aid of the executive arm even for the efficacy of its
judgments.87
In theory, Hamilton was correct, though in Marbury v. Madison88 and several other cases in the early
nineteenth century, the Supreme Court successfully established itself as the ultimate authority on the
laws of the United States.89
Using this authority, the Supreme Court, over the years, has appropriated to itself powers expressly
withheld from it by the Constitution. The most important and egregious of these violations is the
effective dissolution of the Origination Clause and appropriation of the power to impose taxes through
state and local governments.
In a series of rulings following the Civil War, the Supreme Court granted the Senate, which at the time
was not directly elected, the power to originate tax bills. These rulings ignored the plain meaning of the
Origination Clause and upheld revenue bills that originated in the Senate by claiming that the origination
clause applied exclusively to bills with the sole purpose of raising revenue.90 If a bill raised revenue for a
purpose contained within the bill, then the Court held that it was not subject to the Origination Clause.91
Shortly after abandoning the Origination Clause, the Supreme Court granted itself the power to compel
municipalities to impose taxes that violated state laws in a series of cases referred to as the “Bond
Cases.”92 Cities looking to rebuild following the Civil War often issued bonds to finance their
reconstruction. From time to time, a municipality would default or fall behind on its payments. The
Supreme Court relied on Article I, Section 10 of the Constitution (Contracts Clause), which prohibits
states from passing any law “impairing the Obligation of Contracts . . . .”93 In the Bond Cases, the
Supreme Court invalidated state and local laws, some of which existed before the plaintiff had even
purchased the bond that was defaulted on. It ordered municipalities to raise their tax rates to make
payment on the bonds. In some cases the Court forced cities to tax at the maximum rate permissible by
law, but in others, taxes were imposed above the municipal or state maximum tax rate. It did so despite
clearly recognizing that the power was not within their purview: “It is not only not one of the inherent
powers of the court to levy and collect taxes, but it is an invasion by the judiciary of the Federal
government of the legislative functions of State government.”94 The Supreme Court could have simply
ordered the cities to pay the bonds. Instead, it appropriated the power of taxation, violated the most
basic principles of sovereignty and comity, and set a dangerous precedent.
The Supreme Court confronted the issue of judicial taxation again several times beginning in 1954 in
what are referred to as the Desegregation cases.95 The Court desegregated schools in Brown v. Board of
Education, which spurred many lower court cases challenging school district compliance efforts. Most
lower courts used traditional remedial measures to force district compliance, such as orders requiring
busing. However, a few courts decided to appropriate nearly the entirety of district administration and
taxation. One even forced the creation of a school district where one did not exist. In Griffin v. County
School Board, Prince Edward County Virginia eliminated its school district and ceased collecting taxes. A
private school emerged in its place, which received no county or state funds during its first year of
operation. In its second year of operation, all students became eligible for a tuition grant from both the
state and the county, regardless of race. The Supreme Court held that this was a violation of the
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Fourteenth Amendment’s equal protection clause and forced the county to levy taxes and reconstitute
the school district.96
Lower courts took the Supreme Court decision in Griffin as a green light to force school districts and
municipalities to impose new or raise existing taxes.97 In the seminal case, Missouri v. Jenkins (Jenkins
I)98 , the District Court imposed nearly $1.8 billion in taxes. Twenty-five percent was assessed to the
Kansas City, Missouri School District (KCMSD), and the remainder of the funds came from the state.99
The Court invalidated a Missouri Constitutional provision that required voter approval to levy taxes
above $1.25 per $100 of assessed property value and unilaterally raised the KCMSD property tax rate to
$4.00 per $100 of assessed value.100 It further ordered KCMSD to issue $150 million in capital
improvement bonds.101 These taxes were imposed to finance a district improvement plan which
included a performing arts middle school, 50 acres in farm and wildland area for science study, a
technical magnet high school with programs in heating and air conditioning, cosmetology, and robotics,
as well as numerous other frivolous improvements.102
In a 5-4 decision, the Supreme Court upheld the majority of the district court’s opinion. Both the
majority and the dissent agreed that the district court erred when it imposed a new type of tax, but they
were in disagreement as to whether the district court had the authority to require KCMSD to raise an
existing tax in violation of state law. Relying on the Bond Cases, the five justice majority held that the
Fourteenth Amendment’s equal protection clause permitted the Court to force a locality to impose a
tax:
It is therefore clear that a local government with taxing authority may be ordered to levy taxes
in excess of the limit set by state statute where there is reason based in the Constitution for not
observing the statutory limitation.103
The four justice minority forcefully rejected this proposition, arguing that there is no substantive
difference between creating a new tax and increasing an existing one. Rather, the majority’s arguments
were a “convenient formalism.”104 The minority reasoned that the power to tax is a legislative one, not
a judicial one. Citizens that are taxed have recourse against the legislative branch, but they have none
against the judicial. Moreover, the legislative process affords due process to those impacted by the levy,
while judicial taxation affords no such protection.105
Five years later, the Jenkins litigation reached the Supreme Court again. This time, the District Court had
ordered KCMSD to institute salary increases for virtually all staff in the district, as well as to fund
remedial “quality education” programs.106 Although the District Court did not directly require KCMSD to
raise its tax rate again, the Supreme Court decision in Jenkins I effectively required the district to do so
in violation of state property tax limitations.
When this case reached the Supreme Court in 1995, the Court’s composition had changed. Justice
Clarence Thomas gave the prior minority a majority, and the Court rejected the district court’s order
that KCMSD provide a universal pay raise to staff financed under the auspices of the Jenkins I decision.
However, the majority did not overturn the Jenkins I holding that the Supreme Court can force a locality
to impose a tax. Justice Thomas, the lone vote to change between Jenkins I and Jenkins II, filed a
concurrence that eviscerated the reasoning in Jenkins I.
The power to tax and raise revenue is one that properly belongs with the legislative branches of federal,
state, and local governments. Judicial taxation in any form, for any purpose, violates the principles of
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comity between state and federal government, and imposes a judicial tyranny over the people based on
the whims of activist judges.
Four more Supreme Court Justices have changed places since the decision in Jenkins II. Justices
Rehnquist, O’Connor, Souter, and Stevens are no longer on the Court. They have been replaced by Chief
Justice Roberts and Justices Alito, Sotomayor and Kagan. If the issue of judicial taxation were presented
to the Supreme Court today, it would most likely split 5-4 in favor of overturning Jenkins. However, the
Supreme Court is likely to see several Justices retire during the next Presidential term. States should not
risk their sovereignty on the future composition of the Supreme Court.
Twenty-five states and two U.S. territories have passed resolutions seeking an amendment to the
Constitution prohibiting the judiciary from requiring a branch of federal, state, or local government to
impose or raise taxes.
Texas should pass a resolution calling for an Amendment to the U.S. Constitution providing that no court
of the United States may impose a tax, or require a state or local government to impose, collect, or raise
taxes. Texas should also call for a limited purpose Article V Constitutional Convention to the same end.
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RECOMMENDATION 4: Pass a Resolution calling for an amendment to the United States
Constitution prohibiting the federal government from enacting any unfunded mandates,
and call for a limited Article V Constitutional Convention to the same end.
On July 2nd, 1776, the Second Continental Congress adopted the Lee Resolution declaring independence
from the British Empire. Two days later the Declaration of Independence was formalized, establishing
that America would not consent to “the establishment of a direct Tyranny over these States.”
The legislative history and text of the Constitution, the Bill of Rights, and the writings of the founding
fathers make it abundantly clear that the federal government was intended to be one of limited powers.
However, the federal government has refused to operate within these limits. Congress routinely
expands federal power further and further into the sphere reserved to states, and the Supreme Court
has frequently acquiesced in these intrusions.
Unfunded mandates are governmental acts with which states have no alternative but to comply at a
cost. Congress enacts purely unfunded mandates via its Article I, Section 8 power to regulate interstate
commerce.107 Beginning in the early twentieth century, the Supreme Court has repeatedly broadened
Congress’ authority to regulate commerce.108 In the seminal case Wicker v. Filburn, the Supreme Court
held that Congress’ commerce power was broad enough to regulate production of wheat exclusively for
one’s own personal consumption.109 The Court found it irrelevant that the wheat being regulated would
never enter into trade, reasoning that the farmer would refrain from purchasing wheat that was in
trade, thereby affecting interstate commerce and permitting Congress to regulate the wheat produced
for personal consumption.110 In effect, the Court held that Congress has the power to regulate anything
that conceivably could affect the stream of commerce.111
This view dominated the Supreme Court until the 1990’s. During the high water mark of Commerce
Clause jurisprudence, courts upheld numerous unfunded mandates under this power including: setting a
national minimum wage,112 eliminating state sovereign immunity and imposing federal liability on stateowned railroads, 113 upholding the Clean Air Act,114 forcing states to take title to embedded abandoned
shipwrecks,115 and more. A recent shift in the Supreme Court has found a renewed sense of federalism
and weakened prior jurisprudence, but the concept that the Commerce Clause grants Congress
extremely broad regulatory power remains unchanged.
Congress attempted to address the problem of unfunded mandates in 1995 by passing the Unfunded
Mandate Reform Act (UMRA). Prior to UMRA’s passage, Congress and the public had no way to
calculate the total costs of unfunded mandates. Title I of the Act requires the Congressional Budget
Office (CBO) to review legislation and amendments, and report to Congress whether proposed and
enacted legislation contains unfunded mandates. Title II of UMRA requires agencies to report when
they pass or amend a rule that is estimated to cost states, local governments, tribal governments, or the
private sector $100 million or more in any given year. UMRA does not require the CBO or agencies to
report costs associated with conditions of federal assistance; duties stemming from participation in
voluntary federal programs; rules issued by independent regulatory agencies; rules issued without a
general notice of proposed rulemaking; and rules and legislative provisions that cover individual
constitutional rights, discrimination, emergency assistance, grant accounting and auditing procedures,
national security, treaty obligations, and certain elements of Social Security.116
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Unfunded Mandates Enacted by Congress, 2004-2011117
Unfunded Intergovernmental Mandates
Year
2004
2005
2006
2007
2008
2009
2010
2011
Total
25
23
37
20
40
30
86
23
Costs Exceeding
UMRA
Threshold
2
0
2
3
1
0
7
0
Total
(20042011)
284
15
Indeterminable
Mandate Costs
0
1
2
0
0
3
7
0
13
Private Sector Mandates
Total
43
30
66
47
64
60
129
51
Costs Exceeding
UMRA
Threshold
5
4
11
10
15
17
25
7
Indeterminable
Mandate Costs
4
5
11
8
13
11
21
1
490
94
74
Congress has enacted identified unfunded mandates at an astonishingly high rate. From 2004 to 2011,
the CBO reported that 1,363 pieces of legislation contained an unfunded mandate. Congress enacted
774 of them, amounting to fifty-seven percent of all unfunded mandates considered by Congress.
The CBO has not provided an analysis of the total costs of unfunded mandates as defined under UMRA,
though, it is apparent that the mandates cost tens of billions of dollars annually. The Congressional
Research Service estimated that at least $3 billion in costs are levied on state, local, and tribal
governments from the major unfunded mandates enacted by Congress.118 This analysis included only 13
of the major unfunded mandates and did not consider any of the 282 other unfunded mandates that
cost less than $50 million per year. Private sector mandates are far more substantial. The 94 major
unfunded mandates, those costing at least $100 million annually, cost a minimum of $9.4 billion per
year. This does not include the 396 other unfunded mandates. It is impossible to calculate the total
costs imposed on states via unfunded mandates as defined by UMRA, but it is clear that the burden is
very substantial.
Mandate Statements Transmitted by the CBO, 2004-2011119
22
Year
Total
Statements
Transmitted
Total Statements
Identifying
Mandates
Total Unfunded Mandates
Enacted
2004
2005
2006
2007
2008
2009
2010
2011
557
500
478
703
679
419
474
434
137
174
181
271
153
175
149
123
68
53
103
67
104
90
215
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Federalism and the Federal Government | Texas Conservative Coalition Research Institute
Total
4,244
Percent of Statements
Transmitted
1,363
774
32.12%
18.24%
In addition to the 774 unfunded mandates enacted by Congress, agencies have self-reported 205 rule
changes that would impose unfunded mandates costing $100 million or more. 120
Nearly one thousand unfunded mandates have been imposed on state, local, and tribal governments
and the private sector by legislation and agency rules since the passage of the Unfunded Mandate
Reform Act. UMRA has been entirely ineffective in halting the most basic form of federal overreach.
Purely unfunded mandates and conditional spending programs shift accountability for increased taxes
and poorly conceived policy from the federal legislators that create them to the local officials who must
fund them. They impose one size-fits-all solutions to problems that differ greatly across this incredibly
large and diverse nation. They restrict the ability of states to develop innovative solutions to state and
national problems.
Congress has recognized the problems posed by unfunded mandates, but their attempt to correct the
problem has been a dramatic failure. It has, however, provided taxpayers with a visualization of the
problem. Nearly 31 percent of all legislation considered between 1996 and 2005 contained some form
of unfunded mandate.
Mandate Statements Prepared by the CBO for Bills, Proposed
Amendments, and Conference Reports, 1996-2005121
Total Mandate Statements Prepared
UMRA Mandates Identified
Non-UMRA Mandates Identified
UMRA and Non-UMRA Mandates Imposed on the
Private Sector or State, Local, or Tribal Governments
Total
11,420
1,523
2,000+
Percent
13.34%
17.51%
3,523+
30.85%
It is clear that Congress does not intend to refrain from imposing excessive and burdensome costs on
states. The states must act to restrain Congress.
The Texas Legislature should pass a Resolution calling for a Constitutional Amendment prohibiting the
federal government from enacting any unfunded mandates and calling for a limited purpose Article V
Convention to the same end.
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Conclusion
Article II of the Articles of Confederation states:
Each state retains its sovereignty, freedom, and independence, and every Power, Jurisdiction,
and right, which is not by this confederation expressly delegated to the United States, in
Congress assembled.122
American history is rich with documented evidence of what role the states are intended to play in the
larger system of government. The Federalist Papers, the Articles of Confederation, Supreme Court
decisions, and the Constitution itself are clear. States retain all powers not specifically granted to the
federal government in the United States Constitution. Federalism is a power share, intended to keep
the central government from gaining too much power.
Unfortunately, the federal government has grown beyond its limits in the Constitution, and states have
let it happen. From federalization of healthcare and education, to regulatory abuse and coercion, the
federal government has encroached on state territory.
It is time for Texas to reassert its rights under the Tenth Amendment, and its rightful place in the
federalist system that our founders intended.
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ENDNOTES
1
“The Alleged Danger From the Powers of the Union to the State Governments Considered,” Federalist No. 45,
James Madison, January 26, 1788.
2
Ibid.
3
“Certain General and Miscellaneous Objections to the Constitution Considered and Answered,” Federalist No. 84,
Alexander Hamilton, May 28, 1788.
4
United States v. Sprague, 282 U.S. 716 (1931).
5
United States v. Darby, 312 U.S. 100 (1941).
6
Fry v. United States, 421 U.S. 542, 547 n.7
7
Letter from Governor Rick Perry, Lieutenant Governor David Dewhurst, and Speaker Joe Straus to members of
the Texas Congressional Delegation, March 19, 2010.
8
“House Passes Energy Overhaul Bill,” CNN Politics, http://articles.cnn.com/2009-0626/politics/house.energy_1_jobs-bill-arm-twisting-by-democratic-leaders-house-vote?_s=PM:POLITICS
9
Massachusetts vs. Environmental Protection Agency, 127 S.Ct. 1438 (2007).
10
“EPA Toughens Tailpipe Rules in National Greenhouse Gas Limits,” Matthew Tresaugue, Houston Chronicle, April
2, 2010. http://www.chron.com/news/nation-world/article/EPA-toughens-tailpipe-rules-in-national-1694692.php
11
Coalition for Responsible Regulation v. Environmental Protection Agency, 684 F.3d 102 (2012).
12
“Top EPA Official Resigns After ‘Crucify’ Comment,” Associated Press, April 30, 2012.
http://www.foxnews.com/politics/2012/04/30/top-epa-official-resigns-after-crucify-comment/
13
“EPA Official Not Only Touted ‘Crucifying’ Oil Companies, he Tried It,” Christopher Helman, Forbes, April 26,
2012. http://www.forbes.com/sites/christopherhelman/2012/04/26/epa-official-not-only-touted-crucifying-oilcompanies-he-tried-it/
14
Ibid.
15
Ibid.
16
EPA Drops Action Against Range Resources Over Parker County Water Wells,” Barry Shlachter, Star-Telegram,
March 31, 2012. http://www.star-telegram.com/2012/03/30/3849362/epa-drops-action-against-range.html
17
College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board, 527 US 666, 686 (1999).
18
23 U.S.C. §158.
19
South Dakota v. Dole, 483 U.S. 203 (1987).
20
Nat’l Fed’n Indep. Bus. v. Sebelius, 567 U.S. ___ (2012).
21
“NCLB meets school realities: lessons from the field.” Gail Sunderman, James S. Kim, Gary Orfield (2005).
22
U.S. Department of Education, “Race to the Top;” http://www2.ed.gov/programs/racetothetop/index.html
23
January 13, 2010 Press Release issued by the Office of Governor Rick Perry.
24
25
26
U.S. Code, Title 20, Chapter 48, Subchapter I, Section 3403 (Department of Education Organization Act of 1979)
Texas Constitution, Article VII, Section 1.
Federal Government Civilian Employment, By Function: December 2008. Available at
http://www2.census.gov/govs/apes/08fedfun.pdf
27
Data is current as of December 2012. See “Americans Believe Public Workers Better Paid and more Secure,”
Andrew Malcolm, Investors Business Daily, December 10, 2012. available at http://news.investors.com/politicsandrew-malcolm/121012-636426-americans-figure-out-public-employees-have-it-better-than-privateworkers.htm#ixzz2EhDuT2Qk
28
For example, see http://tenthamendmentcenter.com/2009/02/07/states-asserting-their-sovereignty/
29
House Concurrent Resolution 50 (81R).
30
Lawsuit filed by 13 attorneys general in the United States District Court, Northern District of Florida, March 22,
2010. Complaint available at http://www.oag.state.tx.us/newspubs/releases/2010/032310healthcarelawsuit.pdf
31
Sebelius, 567 U.S. ___ (2012).
32
U.S. Const. art. I, sec. 8.
33
Sebelius, 567 U.S. at ___.
34
Id.
35
Id.
36
College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board, 527 US 666, 686 (1999).
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25
37
Sebelius, 567 U.S. at ___. (citing Steward Machine Co. v. Davis, 301 U.S. 548, 590 (1937)).
Id.
39
Id.
40
Id.
41
Estimates vary. A march 19, 2010 letter from Governor Perry, Lieutenant Governor David Dewhurst, and
Speaker Joe Strauss to members of the Texas Congressional Delegation puts the estimate at $24.3 billion. In
contrast, one frequently cited study by the Kaiser Foundation estimates this cost for Texas at $9,636,000,000 over
the next ten years, assuming full implementation by all states. http://www.kff.org/medicaid/upload/8384.pdf
42
Edwin Park and Judith Solomon, “Proposal to Establish Federal Medicaid ‘Blended Rate’ Would Shift Significant
Costs to States,” Center on Budget and Policy Priorities, June 24, 2011,
http://www.cbpp.org/cms/?fa=view&id=3521.
43
See Patient Protection and Affordable Care Act, Sec. 1311, 1321 (2010)
44
“Most Governors Refuse to Set Up Health Exchanges,” Robert Pear, The New York Times, December 14, 2012.
Available at http://www.nytimes.com/2012/12/15/us/most-states-miss-deadline-to-set-up-healthexchanges.html?_r=0
45
“The Budget and Economic Outlook: An Update,” p. 49, Congressional Budget Office, August 2010, available at
http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/117xx/doc11705/08-18-update.pdf.
46
See Paul R. Houchens, “Measuring the Strength of the Individual Mandate,” Milliman Research Report, March,
2012, available at: http://publications.milliman.com/publications/health-published/pdfs/measuring-strengthindividual-mandate.pdf
47
Various states have taken already taken such action. Oklahoma, for example, amended its Constitution to
provide, in relevant part, “[t]o preserve the freedom of Oklahoma to provide for their health care . . .[a] law or rule
shall not compel, directly or indirectly, any person, employer or health care provider to participate in any health
care system[.]” Okla. Const. Art. 2 § 37; Wyoming, Alabama, and others have passed similar Amendments. States
such as Missouri and Florida have had similar provisions defeated by voters via ballot initiative.
48
“The Health Care Freedom Act Questions and Answers,” Goldwater Institute, available at
http://www.goldwaterinstitute.org/bitcache/3ebc1a8800387d8f057f18c7cf01939095139727?vid=4374&dispositio
n=attachment&op=download (last accessed March 24, 2010)
49
“Gov. Bob McDonnell Signs Virginia Health Care Freedom Act,” WSLS News, March 25, 2010, available at
http://www2.wsls.com/sls/news/state_regional/govtpolitics/article/gov._bob_mcdonnell_signs_virginia_health_c
are_freedom_act/88835/
50
“ALEC’s Freedom of Choice in Health Care Act,” American Legislative Exchange Council, See
http://www.alec.org/initiatives/health-care-freedom-initiative/about-alecs-freedom-of-choice-in-health-care-act/
51
See HB 32 (82R); HB 124 (82R); HB 144 (82R); HB 203 (82R); HJR 24 (82R); HJR 27 (82R); HJR 30 (82R).
52
For a list of and description of cases, see http://healthcarelawsuits.org/
53
Sissel v. U.S. Department of Health & Human Services, Case No. 1:10-cv-01263.
54
Coons v. Geithner, Case No. 2:10-cv-01714.
55
“Federal Court Issues Injunction Against HHS Implementation of Obamacare Contraception Mandate,” Matthew
Boyle, The Daily Caller, November 29, 2012, available at http://dailycaller.com/2012/11/29/federal-court-issuesinjunction-against-hhs-implementation-of-obamacare-contraception-mandate/
56
Amended Complaint, Oklahoma v. Sebelius, (W.D. Okla. 2012) (No. CIV-11-030-RAW).
57
Id. at 5.
58
“Some Unions Grow Wary of Health Law They Backed,” Janet Adamy and Malanie Trottman, The Wall Street
Journal, January 30, 2013, available at
http://online.wsj.com/article_email/SB10001424127887323854904578260313912570432lMyQjAxMTAzMDMwMTEzNDEyWj.html?mod=wsj_valettop_email
59
William J. Brennan, Jr., State Constitutions and the Protection of Individual Rights, 90 HARV. L. REV. 489, 491
(1977).
60
July 3, 2008 Campaign Stop. Video available at
http://www.youtube.com/watch?feature=player_embedded&v=1kuTG19Cu_Q
38
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Federalism and the Federal Government | Texas Conservative Coalition Research Institute
61
“CBO Tallies 2012 Deficit at $1.1 Trillion,” Andrew Taylor, Associated Press, October 6, 2012, available at
http://www.realclearpolitics.com/articles/2012/10/06/cbo_tallies_2012_deficit_at_11_trillion_115698.html
62
“Stimulus: Still Not Working!,” Veronique de Rugy, Reason, December 2010, available at
http://reason.com/archives/2010/11/16/stimulus-still-not-working
63
“Record 46 Million Americicans are on Food Stamps,” Jeff Cox, CNBC, Sep. 4, 2012, available at
http://www.cnbc.com/id/48898378/Record_46_Million_Americans_Are_on_Food_Stamps
64
“Food Stamp Growth 75X Greater than Job Creation,” Daniel Harper, The Weekly Standard, The Blog, November
2, 2012, available at http://www.weeklystandard.com/blogs/food-stamp-growth-75x-greater-jobcreation_660073.html
65
“Obama Ends Welfare Reform As We Know It,” Robert Rector & Katherine Bradley, National Review Online: The
Corner, July 12, 2012, available at http://www.nationalreview.com/corner/309300/obama-ends-welfare-reformwe-know-it-robert-rector
66
See http://www.usdebtclock.org/
67
See Bureau of Economic Analysis, http://www.bea.gov/; White House Office of Management and Budget,
http://www.whitehouse.gov/omb/budget/Historicals; United States Department of Treasury,
http://www.treasury.gov/initiatives/Pages/debtlimit.aspx
68
http://www.fas.org/sgp/crs/misc/RL31967.pdf; CRS, compiled using the Legislative Information System,
available at http://www.congress.gov; OMB.
69
U.S. Const. art. V.
70
Source: United States Senate Congressional Record, January 15, 1979; page 134.
71
Text of House Concurrent Resolution 31 (65R) as introduced.
72
It should be noted that the Friends of the Article V Convention is a group that believes that “We The People are
being denied our constitutional right to an Article V Convention to propose amendments.” However, their
research concedes that three of the thirty-nine states that have petitioned for a balanced budget amendment have
rescinded their petition, but notes that the 36 remaining petitions exceed the 34 that would constitute the
requisite two-thirds of states.
73
“The Other Way to Amend the Constitution: The Article V Constitutional Convention Amendment
Process,“James Kenneth Rogers, Harvard Journal of Law and Public Policy, 1005, 1008 (2007).
74
Ibid.
75
“Balanced Budget Amendment (US),” The New York Times: Times Topics, Last updated Nov. 18, 2011, available
at http://topics.nytimes.com/top/reference/timestopics/subjects/b/balanced_budget_amendment_us/index.html
76
Ibid.
77
“Sen. John Cornyn Says 49 States Have a Balanced Budget Amendment in their State Constitutions,” Politifact:
Texas, see http://www.politifact.com/texas/statements/2010/dec/25/john-cornyn/sen-john-cornyn-says-49states-have-balanced-budge/
78
Ibid.
79
Ibid.
80
“GOP Rep. Paul Ryan Says U.S. Borrows 42 Cents of Each Dollar it Spends and Half the Borrowing is From
Countries Like China,” Politifact: Wisconsin, see
http://www.politifact.com/wisconsin/statements/2011/jul/15/paul-ryan/gop-rep-paul-ryan-says-us-borrows-42cents-each-do/
81
“Objection That The Number of Members Will Not Be Augmented as the Progress of Population Demands
Considered,” The Federalist No. 58, James Madison, February 20, 1788.
82
McCulloch v. Maryland, 17 U.S. 316, 431 (1819).
83
U.S. Const. art. I, Sec. 7.
84
“The Origination Clause of the U.S. Constitution: Interpretation and Enforcement,” James Saturno, Congressional
Research Survey, RL 31399 (2011), available at http://democrats.rules.house.gov/archives/RL31399.pdf.
85
“The Origination Clause in the American Constitution: A Comparative Survey,” 23 Tulsa L.J. 165 170-71, Michael
J. Medina, J. Michael (1987).
86
U.S. Const. art. III, sec. 1
87
“The Judiciary Department,” The Federalist No. 78, Alexander Hamilton, June 14, 1788.
Texas Conservative Coalition Research Institute | Reasserting Texas’ Role
27
88
Marbury v. Madison, 5 U.S. 137 (1803).
see Fletcher v. Peck, 10 U.S. 87 (1810); Martin v. Hunter’s Lessee, 14 U.S. 304 (1816); McCulloch v. Maryland, 17
U.S. 316 (1819); Cohens v. Virginia, 19 U.S. 264 (1821).
90
See United States v. Norton, 91 U.S. 566 (1875); Twin City Nat. Bank of New Brighton v. Nebecker, 167 U.S. 196,
(1897); Flint v. Stone Tracy Co., 220 U.S. 107, (1911); Rainey v. United States, 232 U.S. 310 (1914).
91
See Norton; Nebecker; Stone Tracy Co.; Rainey.
92
See City of Galena v. Amy, 72 U.S. 705 (1866); United States v. City of New Orleans, 98 U.S. 381 (1878); Wolff v.
City of New Orleans, 103 U.S. 358 (1880); Graham v. Folsom, 200 U.S. 248 (U.S.S.C. 1906); State of Louisiana ex rel.
Hubert v. City of New Orleans, 215 U.S. 170 (1909).
93
U.S. CONST.. art. I, § 10.
94
Heine v. Bd. of Levee Com’rs, 86 U.S. 655 (1873).
95
Griffin v. County School Board, 377 U.S. 218 (1964); Evans v. Buchanan, 423 U.S. 1080 (1976); Missouri v. Jenkins,
495 U.S. 33 (1990) (Jenkins I).
96
Griffin at 233.
97
“Briefing Paper no. 24, The Limited Power of Courts to Order Spending,” Mark Champoux and John Lobato,
Harvard Law School Federal Budget Policy Seminar, May 14, 2006.
98
Missouri v. Jenkins, 495 U.S. 33 (1990).
99
Briefing Paper No. 24., Supra note 95.
100
Jenkins I at 41.
101
Id. at 41-42.
102
Id. at 60 (Kennedy dissenting)
103
Id. at 57.
104
Id. at63-64.
105
Id. at 66-67.
106
Missouri v. Jenkins, 515 U.S. 70 (1995).
107
U.S. CONST. Art. I, § 8.
108
United States v. Darby, 312 U.S. 100 (1940).
109
Wicker v. Filburn, 317 U.S. 111 (1942).
110
Id. at 119-120.
111
Darby, 312 U.S. at 112.
112
Garcia v. San Antonio Met. Trans. Auth., 469 U.S 528 (1985).
113
Parden v. Terminal Ry. of Alabama State Docks Dept., 377 U.S. 184, 189, overruled on other grounds by Coll. Sav.
Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666 (1999).
114
Virginia v. Browner, 117 S. Ct. 764, 764 (1997).
115
Zych v. The Unidentified, Wrecked, and Abandoned Vessel, Believed to be the SB “Seabird”, 811 F. Supp. 1300,
1317-21 (N.D. Ill. 1992)
116
“Unfunded Mandates Reform Act: History, Impact, and Issues ,“Robert Dilger and Richard Beth, Congressional
Research Service (2012), available at http://www.fas.org/sgp/crs/misc/R40957.pdf.
117
“A Review of CBO’s Activities in 2011 Under the Unfunded Mandates Reform Act,“ CONGRESSIONAL. BUDGET OFFICE,
Pub. No. 4097, (March 2012), available at http://www.cbo.gov/sites/default/files/cbofiles/attachments/03-30UMRA.pdf; “A Review of CBO’s Activities in 2008 Under the Unfunded Mandates Reform Act,“ CONGRESSIONAL
BUDGET OFFICE, Pub. No. 3194, (March 2009), available at
http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/100xx/doc10058/03-31-umra.pdf.
118
Dilger, supra note 114.
119
CONG. BUDGET OFFICE, supra note 115.
120
Dilger, supra note 114.
121
Id.
122
“United States Articles of Confederation, Article II,” Second Continental Congress, March 1, 1781.
89
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