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The SCOTUS ruling's impact on education policy

Posted by Jim Stergios  June 29, 2012 04:37 PM

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Internet traffic has been especially heavy for the past 32 hours as people across the US are trying to understand just what the decision yesterday by SCOTUS means. The Affordable Care Act (ACA) is an extremely complex piece of legislation famously weighing in at well over 2,000 pages and already a couple of years into implementation leading to thousands more pages of regulations and guidance to fill in the gaps left to the U.S. Health Secretary Sebellius.

As people learned the news yesterday, of course, some had extra pep in their step; others required pepto-bismol.

Such high-profile ruling with broad implications for federal-state relations is bound to touch on education policy -- and it does. The discussion of the Commerce Clause and whether the individual mandate overstepped the Court's understanding of the CC's power does not impact ed policy but the 7-2 decision on the ACA's Medicaid expansion does.

A little background. When it was established in 1965, Medicaid was limited to “furnish[ing] rehabilitation and other services to help families and individuals attain or retain capability for independence or self care,” and it cost a few billion dollars.

In 1985, the federal government began expanding Medicaid to serve non-welfare recipients. States had authority over administrative functions such as setting asset tests and cost-sharing levels, and could choose whether to cover “optional” groups.

Today Medicaid serves 65 million Americans at a cost of nearly $400 billion. The ACA expands Medicare to cover an additional 17 million Americans at a 10-year cost of $1 trillion and it prohibits changes in benefit levels. The critical aspect of the ACA that came under consideration in the Court was that the law stated that states must enact the Medicaid expansion or risk losing not only new federal funding but all existing (base) federal funding for current Medicaid services.

Back during March's oral arguments on the ACA, the question of whether the law's Medicaid expansion constituted federal coercion came to the fore.

Justice Samuel Alito used a hypothetical about education to ask if the the Medicaid expansion would amount to federal coercion. Assume, Alito suggested, Congress recognizes that education “expenditures are a huge financial burden” on states and announces that “we are going to take that… off your shoulders” through a federal tax that will “raise exactly the same amount of money as… the states now spend on education.”

To get the money, states would simply need to surrender control over teacher tenure, collective bargaining, textbooks, class size, the school calendar and more to the feds. States could theoretically say no, but their citizens would still pay the federal education tax and existing state taxes to fund public education.

“Would that,” Alito asked, “reach the point where financial inducement turns into coercion?” Solicitor General Verilli argued that it wouldn’t; to which Alito curtly responded “[I]f that is the case, then there is nothing left of federalism.”

Alito’s focus on education is instructive. For there is concern among some that the federal role in education has expanded markedly over the years -- and especially so during the Obama administration, which has demonstrated the same federalizing impulse in education as it has in health care.

The same year Medicaid was established, the Elementary and Secondary Education Act (ESEA) broadened federal power over education. In 1979, President Carter answered the prayers of DC-based education special interests by establishing the US Department of Education. The pattern of expanding USDOE’s reach continued through the 2001 No Child Left Behind Act (NCLB) championed by President George W. Bush and Senator Ted Kennedy.

None of these federal efforts raised student achievement, but they sure boosted the US Department of Education’s budget, which has risen from $14 billion in 1979 to $70 billion last year.

Certainly, those concerns about coercion are in part related to the federal department of education's development of national standards and tests, as well as the use of grant money to coax states into action. That practice was not impacted by Thursday
s historic ruling.

But the much-discussed possibility of having the federal department pull Title I funding from states should they not enact policies of the feds' liking is likely dead at this point.

As Lindsey Burke noted in the Daily Caller:

Concern grew when President Obama indicated that access to federal Title I dollars for low-income schools would be contingent upon adoption of national standards — a policy that, unlike Race to the Top, would make the standards anything but voluntary. In remarks to the National Governors Association in February 2010, Obama noted that “as a condition of receiving access to Title I funds, we will ask all states to put in place a plan to adopt and certify standards that are college and career-ready in reading and math.”

As Mark Walsh of EdWeek noted:

On the Medicaid issue, the court effectively ruled 7-2 that the Medicaid expansion violates the U.S. Constitution by threatening the states with the loss of their existing Medicaid funding if they decline to comply with the expansion.

Congress put "a gun to the head" of the states to force them to to add a much larger pool of the poor to the Medicaid rolls, Chief Justice John G. Roberts Jr. said in his main opinion inNational Federation of Independent Business v. Sebelius (Case No. 11-393). Medicaid funding accounts for over 20 percent of the average state's total budget, with federal funds covering anywhere from 50 to 83 percent of those costs, he noted.
"Congress may use its spending power to create incentives for states to act in accordance with federal policies," the chief justice said. "But when pressure turns into compulsion, the legislation runs contrary to our system of federalism."

Roberts said, though, that the Medicaid expansion could be saved by allowing funds to be withheld only for violations stemming from the expansion itself, not from existing funding.

So, without Congressional authority that redefines the purpose of Title I funds, such an action would be impossible.

Pay no mind, though. Today, five more states received waivers from the No Child Left Behind law from the US Education Department. This highly coercive practice, where the USED grants waivers from NCLB's accountability provisions, is based on conditions (adoption of curricular materials, instructional practice guides and national tests) that are contrary to federal law is not impacted by the decision.

That's not unconstitutional. It's just illegal...

The talk of how the SCOTUS decision confirms important principles limiting the federal government to enumerated powers is overblown.

Crossposted at Pioneer's blog. Follow me on twitter at @jimstergios, or visit Pioneer's website.

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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About the author

Jim Stergios is executive director of the Pioneer Institute. Before joining Pioneer, he was Chief of Staff and Undersecretary for Policy in the Commonwealth's Executive Office of Environmental Affairs, where More »

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