AUSTIN – The Texas Public Policy Foundation today released the report, Loosening the Federal Straightjacket: What the U.S. Supreme Court's NFIB Decision Means for Federal Funds in State Budgets. This report focuses on the disastrous intermingling of federal and state finances, particularly the onerous conditions that come attached to federal funds for the state through which the federal government exerts enormous control over state governments.

"In education, healthcare, transportation, and other areas, legislators have struggled with the ‘straightjacket' of conditions on federal ‘assistance,'" said Mario Loyola, chief counsel of the Texas Public Policy Foundation and senior fellow of its Center for Tenth Amendment Action. "This report shows how we can fight back and restore the separation of federal and state functions that the framers intended. Congress needs to mind its own business, which it has a hard enough time dealing with, and let the states run their own governments."

The report illustrates why the federal government has raised deficits of 3.5 percent of Gross Domestic Product over the past 30 years, only to transfer most of the money to the states in the form of "assistance." The states don't need any help — that is why they have their own taxing authority. The only reason the federal government needs to help the states is so that it can control them, and its control goes far beyond the 35 percent of the Texas budget that now depends on federal assistance. 

In addition, the report also explores ways that coercive federal funding sources can be targeted and defeated under the Supreme Court's decision in NFIB v. Sebelius.  It also provides a catalog of the top sources of federal funds in the state budget and the conditions attached to them, as well as model legislation showing how the attorney general and comptroller can work together to fight back against federal coercion.

The paper can be read in its entirety here:


Mario Loyola is Chief Counsel at the Texas Public Policy Foundation.


The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin.


Primary website:

Facebook page:

Twitter feed: