The Spending Power and Environmental Law After Sebelius

In National Federation of Independent Business v. Sebelius, a plurality of the Supreme Court held that portions of the Affordable Care Act exceeded federal authority under the Spending Clause. With that holding, Sebelius became the first Supreme Court decision since the New Deal to limit an act of Congress on spending-power grounds, rounding out the “New Federalism” limits on federal power first initiated by the Rehnquist Court in the 1990s. The new Sebelius doctrine constrains the federal spending power in contexts involving changes to ongoing intergovernmental partnerships with very large federal grants. However, the decision gives little direction for evaluating when the amount of change or funding reaches the threshold of spending-power coercion. Sebelius thus leaves open important unanswered questions about the contours of the new limit and how it will impact intergovernmental bargaining. This Article assesses the Sebelius doctrine by testing its application in a legal realm in which spending-power bargaining features prominently: federal environmental law. Methodically applying the new limit to the major environmental programs of cooperative federalism, the analysis concludes that all should withstand legal challenge—even a potentially vulnerable provision of the Clean Air Act. The review sheds light not only on environmental law after Sebelius, but also the many other realms of American governance that engage spending-power bargaining, such as public education, civil rights law, social service programs, and civic infrastructure. The Article concludes that the impacts of the doctrine will be most palpable in the dynamics of intergovernmental bargaining. States will have more leverage when negotiating design and enforcement terms within spending-power partnerships. However, the federal government may adapt by relying on spending-power bargaining less often and with less at stake, even in contexts where states may prefer spending partnerships to the alternative