Federal funds bring federal strings

President Donald Trump’s executive orders on education have some North Carolinians crying foul.

When the University of North Carolina system moved to comply with Trump’s order against discrimination by federal contractors, for example, a group of UNC-Chapel Hill faculty members argued the resulting prohibition against requiring students to take diversity-themed courses threatened “shared governance principles.”

Another executive order — banning federally funded schools from inculcating claims about “structural racism” and “white privilege” into curricula — drew criticism as “political theater” and “a blast of steam” that could nevertheless endanger local control of education.

When previous Democratic administrations used the lever of federal funding to compel state and local compliance with their preferences on race and gender, however, no angry letters or defenses of federalism arose from such quarters. Indeed, North Carolina progressives were delighted when in 2016 President Obama intervened in the “bathroom bill” controversy with both executive action and a federal lawsuit.

I’m not advocating tit-for-tat here. I seek consistency. Some of the Trump administration’s orders do violate the constitutional separation of powers, by which I mean the proper relationship not just among the federal branches but also among Washington, state governments, and localities. But we can’t revitalize American federalism by engaging in ideological gamesmanship, by progressives resisting only conservative violations and conservatives resisting only progressive ones.

Let’s be clear: some longtime policies by schools and universities were always against federal law. The latest executive orders merely serve to reinforce that fact. Discriminating by race or ethnicity when hiring employees or awarding contracts was never anything but a violation of federal law. (The use of race in university admissions was, by contrast, a contested legal issue until the US Supreme Court definitively ended the pernicious practice in 2023.)

But should the president or Congress use the lever of federal funds to dictate what public schools teach and how they must teach it? Certainly not.

I’ve long argued that the most effective way to restore federalism is for Washington to exit policy sectors for which there is no power explicitly granted by the United States Constitution. Given its massive deficits, all those grants-in-aid are essentially borrowed money, anyway, which violates at least the spirit, if not the letter, of balanced-budget requirements in state constitutions such as North Carolina’s.

Perhaps the new GOP-led Congress will push the exit button on education, transportation, and public-assistance programs. I’m skeptical but would be overjoyed to be proven wrong.

Failing that, the next-best alternative is for Washington to aid recipients directly, by voucherizing federal funds (as with Pell Grants and rental assistance) or adjusting the tax code accordingly. With regard to K-12 education, I don’t think Washington should directly fund vouchers (except in places properly subject to federal governance such as the District of Columbia). There’s too much danger that some future administration or Congress will yank federal strings to reduce the autonomy of recipient schools.

A better solution is the Educational Choice for Children Act (ECCA). The latest version was filed last month in both chambers. It would allow households and businesses to claim tax credits for donations to private scholarship organizations, which would in turn offer educational scholarships to families. The bill caps total credits available at $10 billion a year, distributed proportionally across the various states.

Among its congressional cosponsors are both Thom Tillis and Ted Budd in the US Senate and North Carolinians Richard Hudson and Greg Murphy in the US House. Rep. Virginia Foxx, who now chairs the Rules Committee, supported the same concept two years ago when she led the House Education and Workforce Committee. The tax-credit bill would “expand education opportunities for millions of students,” Foxx wrote, “giving them and their parents the freedom to direct their own academic careers.”

The broader principle here is that if we truly believe in state and local autonomy, we should minimize the extent to which states and localities depend on federal funds. Don’t just yank the strings in different directions. Cut them.

John Hood is a John Locke Foundation board member. His books Mountain Folk, Forest Folk, and Water Folk combine epic fantasy and American history.