Trojan Horse: Federal Manipulation of State Governments and the Supreme Court's Emerging Doctrine of Federalism
Loyola, Mario, Texas Review of Law & Politics
It is a common refrain that the federal government has been progressively expanding its scope and reach for at least a century, regardless of which party was in control. In recent years that expansion has triggered a marked reaction among grassroots and constitutional scholars alike. In Texas, the reaction has been particularly vehement, with the state government challenging the federal administration in open defiance of its policies.1 The reaction has focused on two policies specifically: first, the Patient Protection and Affordable Care Act (PPACA or ACA)2, and second, the Environmental Protection Agency's (EPA) move to regulate greenhouse gases as pollutants under the Clean Air Act (CAA), which led to the partial cancellation of EPA's eighteen-year-old approval of Texas's highly successful State Implementation Plan (SIP) under the CAA.3
The new mandate that individuals purchase health insurance or pay a tax penalty has received the most attention of any aspect of the ACA. Texas joined twenty-five other states in successfully challenging the provision before the Eleventh Circuit, which struck down the mandate as exceeding the federal commerce power.4 But in the Texas Legislature, another aspect of the ACA rose to the fore: namely, its provisions requiring that states expand their Medicaid rolls as a condition of continuing to receive federal Medicaid matching funds.5 Facing a significant budget shortfall, and an unsustainable fiscal outlook for the state's Medicaid program (an outlook that is significantly aggravated by the ACA over the long-term), reformminded state legislators explored every conceivable avenue for "opting out" of Medicaid entirely and replacing it with a statebased system.6 But in the end, state legislators apparently concluded that the penalty of losing Medicaid matching funds was simply too great, and the plan went nowhere.
On the environmental front, the EPA's move to regulate greenhouse gases led to a "SIP Call" late last year.7 A "SIP Call" is an EPA rule that prescribed the elements that a State Implementation Plan under the CAA must include in order to secure EPA approval. When a state fails to submit a conforming plan, the EPA can exact a number of penalties, including FIPing the state-that is, imposing a Federal Implementation Plan upon the state under the CAA. The EPA allows states to regulate in a federally pre-emptible area, on condition that state regulations comply with federal guidance. This is known, somewhat confusingly, as "conditional preemption."8 The SIP Call provided that every approved SIP needs to have a provision that "automatically updates" to include any pollutant designated by the EPA.9 The state of Texas has taken the position that the EPA's entire scheme for regulation of greenhouse gases, and in particular the "automatic update" provision of the SIP Call, violates federal law and both the federal and state constitutions. The EPA noted Texas's response, partially cancelled its eighteen-year-old approval of the state's SIP, and moved to impose a Federal Implementation Plan.10
Both conditional federal grants and conditional preemption insinuate the federal government deeply into the legislative and regulatory processes of state governments. Both are examples of "cooperative federalism."11 This article argues that both practices are incompatible with "the structural framework of dual sovereignty," the standard of federalism enshrined by the Supreme Court in Printz v. United States.12
According to Dr. Michael Greve, Printz and related precedents have "elevate[d] the Tenth Amendment into an extra-textual, judge-made principle of intergovernmental immunity."13 Protecting the Constitution's "structural framework of dual sovereignty" has thus emerged as a doctrine with potentially farreaching consequences.
Because the "intergovernmental immunity" now understood to be enshrined in the Tenth Amendment is just as vulnerable to federal power indirectly applied in the guise of cooperative federalism as when such power is directly applied, there is ultimately a conflict between that "intergovernmental immunity" and the precedents that sustain conditional federal grants and conditional preemption. …