Brief Fact Summary. A federal law withheld federal highway funds from states with a drinking age of less than 21 years.
Synopsis of Rule of Law. The Spending Power of Congress has three general restrictions: (1) the spending power must be used for the general welfare; (2) the conditions must be unambiguous, allowing the states to make a knowing choice and be aware of the consequences of the choice; and (3) the conditions must be related to a federal interest in nationwide programs or projects.
Thus, objectives not thought to be within Article I's enumerated legislative fields may nevertheless be attained through the use of the spending power and the conditional grant of federal funds.View Full Point of Law
Issue. May Congress regulate activities in areas traditionally reserved to the states by using its spending power?
Held. Yes. Judgment affirmed.
Congress may achieve its objectives by conditioning the receipt of federal funds upon compliance by the recipient with federal statutory directives under its spending power. The spending power has three general restrictions. First, the exercise must be in pursuit of the general welfare. Courts should defer to the Congress’s judgment about this requirement. Second, conditions on the receipt of funds must be unambiguous, so states can exercise their choice knowingly and be aware of any consequences. Finally, the conditions on grants must relate to the federal interest in particular nationwide projects or programs.
Here, all three conditions are met. First, the legislation is for the general welfare. Second, it is set in unambiguous terms. Third, it is directly related to safe interstate travel, one of the main purposes for which highway funds are expended.
The financial inducement here is not large enough to be considered coercive, as only a small percentage of highway funds are involved.
Dissent. The legislation is not a condition on spending reasonably related to the expenditure of federal funds. Instead, Congress is attempting to regulate the sale of alcohol, which is outside of its power to regulate commerce. That power is reserved for the states. A national minimum drinking age is not sufficiently related to interstate highways to justify the conditions of the legislation.
Discussion. Congress’ indirect use of its spending power to achieve an objective through the states is constitutional. However, the regulatory action of the state cannot violate individuals’ constitutional rights.