The EPA’s Unconstitutional Highway Funding Threat


By Phil Kerpen

President Obama’s EPA is executing a massive power play, attempting to coerce states into adopting draconian policies that would steeply increase the price of energy.  States that don’t cooperate are being told they’ll have their federal highway funding cut off.  That’s unconstitutional.

Obama’s cap-and-trade energy tax scheme spectacularly crashed and burned in his first term, and was a significant factor in the 2010 “shellacking” he received at the ballot box.  The day after that election, he famously said that the federal legislation “was just one way of skinning the cat; it was not the only way.” 

It turns out the threat to yank highway funding is his all-too-clever way to skin those of us cats who enjoy affordable electricity.

We know the threat is unconstitutional because there was an almost identical strategy used to coerce states embedded in that other debacle from Obama’s first term: Obamacare.

The most famous holding in the same landmark case NFIB v. Sebelius was on the individual mandate that John Roberts contrived to rewrite as a tax.  But the other major holding in the case struck down the law’s feature that required states to expand Medicaid, originally designed as a program for specific, vulnerable populations (children and the disabled) into a new, universal welfare program for able-bodied working-age adults.  The penalty for states that didn’t cooperate was supposed to be the loss of all of the state’s federal Medicaid funding.

The Court said no.  It made clear that Congress cannot commandeer the states into adopting a new program by threatening to remove funding for an existing program.  It wasn’t even particularly controversial, with liberals Breyer and Kagan joining the five Republican appointed justices in a strong 7-2 decision.

“In this case, the financial ‘inducement’ Congress has chosen is much more than ‘relatively mild encouragement’—it is a gun to the head,” the Court wrote. They were drawing a distinction between the Medicaid provisions and the penalty for states that resisted the national 21 year-old drinking age, under threat of losing five percent of their highway funds, which the Court upheld in 1987’s South Dakota v. Dole.  The EPA’s current threat – imperiling all highway funds, because the penalty provisions designed for local non-attainment areas would be applied to entire states – is far more like the former.                           

“The threatened loss of over 10 percent of a State’s overall budget, in contrast, is economic dragooning that leaves the States with no real option but to acquiesce in the Medicaid expansion,” the Court continued.

Federal highway funding is not as big a portion of state budgets as Medicaid, but it is substantial.

The EPA says its cap-and-trade ambitions are not a new program, but merely the latest in its ongoing implementation of the Clean Air Act.  But that won’t fly.

“We cannot agree that existing Medicaid and the expansion dictated by the Affordable Care Act are all one program simply because ‘Congress styled’ them as such,” the Court said.  “If the expansion is not properly viewed as a modification of the existing Medicaid program, Congress’s decision to so title it is irrelevant.”

Nothing like the proposed EPA greenhouse gas regulations has ever previously existed.  The very fact that the agency is pressuring state legislatures to adopt sweeping new laws to transform their electric power sectors is ample evidence of that.

The highway funds threat will therefore be struck down for the same reason the Medicaid threat was, and states can confidently ignore it.

The EPA is going to extraordinary lengths to coerce states to adopt policies that Congress and the American people have already rejected.  The proper state response is to flatly refuse to cooperate while fighting back via litigation, congressional action and, ultimately, by electing a new president who will rein in the out-of-control environmental activists running the EPA.