How Trump is weaponizing federal spending power

“I’ll see you in court.”  

That promise was made by Maine Gov. Janet Mills (D) in response to Trump’s threat to withhold all federal funding from her state unless it complies with his executive order banning transgender athletes from competing in women’s sports. It has become a rallying cry of sorts for progressives desperate for any Democratic politician to stand up to Trump and Elon Musk in their dizzying attempt to dismantle the federal government and remake society in their own image. 

It also highlighted what may become the most important legal fight over the president’s naked desire for unchecked power: his ability to choke states with federal funding cuts unless they bend to his will. 

Trump tested the political limits of this approach three days into his second term, threatening to withhold federal disaster funds from an actively burning Los Angeles unless California’s legislature agreed to pass a voter ID law. Bipartisan outrage at such grotesque cruelty ultimately compelled Trump to back down, but it has not stopped him from making similar threats since then. 

As his spat with Mills illustrated, he has made broad threats to withhold all funding for all state programs if states don’t agree to his various demands. For example, he has threatened to withhold federal education and student loan funding from public state universities that do not end all diversity, equity and inclusion programs. He has threatened funding for state and local law enforcement agencies that do not cooperate with his federal immigration crackdown.   

Such funding threats raise important questions about the constitutional balance of power between federal and state governments and between the president and Congress, questions in which Trump has shown little interest.

Trump cannot directly force states to implement his immigration crackdown or transgender athlete ban because of the Constitution’s 10th Amendment and something called the “anticommandeering doctrine,” which states that the federal government cannot commandeer state resources to carry out its objectives. This respect for state sovereignty dates back to 18th-century debates over constitutional ratification. It is what allows “sanctuary cities” to passively refuse to assist in federal immigration enforcement. 

But in lieu of directly commanding state compliance with federal directives, the federal government can condition funding on such compliance. Just how much financial pressure the feds can put on states is a matter of much constitutional debate. 

Two important Supreme Court cases provide some guidance. In South Dakota v. Dole, the court held that Congress could withhold up to 10 percent in federal highway funds from states that did not abide by the National Minimum Drinking Age Act and raise their minimum legal drinking age to 21. The court allowed this spending condition because it related “to the federal interest in the particular national program” and it was not coercive.

In contrast, in NFIB v. Sebelius, the case more famous for upholding the constitutionality of the Affordable Care Act (Obamacare), the court struck down a portion of the ACA threatening to withhold all Medicaid funding if states did not fall in line with the law’s new Medicaid expansion guidelines. While this spending condition related to the ACA’s national program, it was unduly coercive because it threatened to dismantle entirely state-run healthcare systems. 

Trump’s threats go far beyond the ACA’s spending conditions. For one, his threats to withhold all state funding — for education, infrastructure, healthcare, etc. — is wholly unrelated to his purported federal interest in banning trans athletes or DEI programs. And threats to hold up all state funding is far more coercive than funding solely for Medicaid. 

Moreover, the president does not control government spending — Congress does. Prior spending conditions have all been imposed by congressional statute because Article I of the Constitution clearly gives the spending power to the legislative branch. Although the Impound Control Act allows presidents to temporarily defer or rescind congressionally appropriated funds, an act of Congress is needed to make such rescissions permanent.

In short, if Trump follows through on his threat to cut off all funding to Maine, and Mills follows through with her threat to sue, Mills likely will prevail. But with relatively little case law and a Supreme Court more than willing to overturn precedent, that outcome is not guaranteed.  

Clarifying the limits on this power is more important than ever. States receive around $1.3 trillion in federal funds every year, representing a fifth of all state revenues. That number has risen by more than $400 billion since 2019. And with a president willing to try anything to get his way, this increased reliance poses serious risks for state sovereignty and the ability to push back against Trump’s impulses. 

Today it is DEI and women’s sports. What if tomorrow Trump threatens to withhold federal funding from states that won't ratify a constitutional amendment to end birthright citizenship? Or an amendment to grant him a third term?

If the first month of this new term has shown us anything, it is that truly anything is possible. 

Shawn E. Fields is a professor of Law at California Western School of Law. He studies, writes and teaches mainly in the fields of criminal law and constitutional criminal procedure, with a focus on the Fourth Amendment and police reform.