Federalism and the Federal Government - TXCCRI · Federalism and the Federal Government: A policy...

Federalism and the Federal Government:

A policy white paper on reasserting Texas’ role within the federal system

Texas Conservative Coalition Research Institute February 2013

2 Federalism and the Federal Government | Texas Conservative Coalition Research Institute

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.

http://www.txccri.org/

Texas Conservative Coalition Research Institute | Reasserting Texas’ Role 3

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


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.


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:


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 (S-CHIP) 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


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 science-based 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


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:


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.


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.


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


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 two-dozen 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,


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.


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


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


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.


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:


[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


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


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.


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 state-owned 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


Unfunded Mandates Enacted by Congress, 2004-2011117 Unfunded Intergovernmental Mandates Private Sector Mandates

Year Total

Costs Exceeding UMRA

Threshold Indeterminable Mandate Costs Total

Costs Exceeding UMRA

Threshold Indeterminable Mandate Costs

2004 25 2 0 43 5 4 2005 23 0 1 30 4 5 2006 37 2 2 66 11 11 2007 20 3 0 47 10 8 2008 40 1 0 64 15 13 2009 30 0 3 60 17 11 2010 86 7 7 129 25 21 2011 23 0 0 51 7 1

Total (2004-2011) 284 15 13 490 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

Year

Total Statements Transmitted

Total Statements Identifying Mandates

Total Unfunded Mandates Enacted

2004 557 137 68

2005 500 174 53

2006 478 181 103

2007 703 271 67

2008 679 153 104

2009 419 175 90

2010 474 149 215

2011 434 123 74


Total 4,244 1,363 774 Percent of Statements

Transmitted 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 Percent Total Mandate Statements Prepared 11,420 - UMRA Mandates Identified 1,523 13.34% Non-UMRA Mandates Identified 2,000+ 17.51% UMRA and Non-UMRA Mandates Imposed on the Private Sector or State, Local, or Tribal Governments 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.


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.


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/2009-06-

26/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-oil-companies-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

U.S. Code, Title 20, Chapter 48, Subchapter I, Section 3403 (Department of Education Organization Act of 1979) 25

Texas Constitution, Article VII, Section 1. 26

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/politics-andrew-malcolm/121012-636426-americans-figure-out-public-employees-have-it-better-than-private-workers.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).


37

Sebelius, 567 U.S. at ___. (citing Steward Machine Co. v. Davis, 301 U.S. 548, 590 (1937)). 38

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-health-exchanges.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-strength-individual-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&disposition=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_care_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-issues-injunction-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/SB10001424127887323854904578260313912570432-lMyQjAxMTAzMDMwMTEzNDEyWj.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

http://www.goldwaterinstitute.org/bitcache/3ebc1a8800387d8f057f18c7cf01939095139727?vid=4374&disposition=attachment&op=download

http://www.goldwaterinstitute.org/bitcache/3ebc1a8800387d8f057f18c7cf01939095139727?vid=4374&disposition=attachment&op=download


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-job-creation_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-reform-we-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-49-states-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-42-cents-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.

http://www.bea.gov/

http://www.whitehouse.gov/omb/budget/Historicals

http://www.fas.org/sgp/crs/misc/RL31967.pdf


88

Marbury v. Madison, 5 U.S. 137 (1803). 89

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/03-30-UMRA.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.

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