A Fiscal Strategy For Conservative States to Push Against Washington

By Matthew Nicaud
November 12, 2021

The individual states that make up our nation are at a crossroads. The recent wave of federal funding to states across the country has triggered questions about the extent of federal involvement and the impact of federal funding on state sovereignty and public policy.  

From the specific Covid grants issued by Congress, to the bureaucratic matching system for federal programs such as Medicaid, nearly every federal dollar has something attached to it that carries the will of Washington into the states. While not all of these dollars are a precursor to bad federal policy being imposed on the states, an increasingly leftist federal government is tying more and more strings to these dollars. States need a strategy to press against such actions.

This expansion of federal control using federal money has been pushed in multiple sectors. In healthcare, the Centers for Medicare and Medicaid Services has imposed a vaccinee mandate on hospitals that receive federal funding through Medicaid and Medicare. In the education sector, the Department of Education has asserted an increasingly leftist agenda through its programs, while openly asserting on its own website that “any state that does not want to abide by a federal program's requirements can simply choose not to accept the federal funds associated with that program.”

Thus, we see that while the federal government has increasingly asserted its power over the states, much of the state sovereignty issues are ultimately questions of what dollars the state will accept. The beauty of American federalism is the ability of the states to stand against federal overreach by simply refusing federal funds or agreeing to take them only under certain terms.

Such a stance has been effective in recent months. In April 2021, the Department of Education announced its intention to prioritize the teaching of Critical Race Theory as it awarded civics and history education grants to the state education systems. In response, the state of South Dakota went so far as to directly reject all federal dollars tied to such federal civics and history grant programs. In an earlier response, 20 states had voiced their opposition and the federal government largely backed down after the pushback.

This success presents an important strategy that states can use to press against the whims of Washington. This strategy is twofold -with defensive and offensive elements. As a defense, states should not enroll or expand their involvement in any federal funding program that locks the state in and subjects it to whatever future terms the federal government may impose. On the offensive side, states should directly reject any effort by the federal government to impose damaging policies that are “sugarcoated” with optional federal dollars.

Until states collectively recognize their ability and duty to refuse funds that will impose bad policies on their citizens, the federal government will likely continue down a path of brazen overreach. Conservative state legislatures should reclaim “the power of the purse.” They should consciously reject any attempt by the federal government to wrongly manipulate public policy using the power of federal dollars. The future of these United States depends on it.


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