While supporters of the Affordable Care Act are celebrating the late-June decision upholding the constitutionality of the individual mandate, the biggest victory in the decision was for supporters of states’ rights. The sole provision struck down by the Court, Medicaid expansion, marked the first time the Supreme Court halted federal legislation based on the coercion theory. It may be that this somewhat overlooked aspect of the decision will have the greatest impact in future American politics. Coercion theory argues that the federal government can overstep its power by threatening to withhold federal funding if states do not bend to Congress’ will. Since the argument was first used in the 1936, the Court has been largely unwilling to even hear cases citing it as a main argument, and when it has, it has refused to validate the argument. The history of cases argued that cite such alleged coercion sheds much light on this recent decision. By looking closely at the coercion theory, one can see the enormous impact this recently validated argument will have in creating a new, 21st-century federalism.
In 1936, the validity of a tax imposed by the Social Security Act on employers was determined by the Supreme Court. In the case of Steward Machine Co. v. Davis, an Alabama corporation claimed the federal government had levied a tax on employers with the sole
