Page:Health and Hospital Corp. of Marion Co. v. Talevski.pdf/59

Rh of this nature, entered into freely by both parties, is an exercise of sovereign regulation and control over one of the parties or over the subject matter with which the contract deals. … The rights of the United States under the contracts are no greater than would be the rights of a private citizen under similar contracts, and enforcement must be by ordinary judicial process according to the law of the forum. The contracts are not derogatory of any sovereign rights of the States; they are carried out pursuant to and under the protection of the laws of the States. … The purpose and effect of the contracts so entered into are simply to accomplish the spending of the money on the conditions imposed by Congress, and in authorizing execution of such contracts Congress was not exerting a power outside of the field of appropriation.” Id., at 266–267.

The Government also disclaimed that the Act would have pre-emptive effect: Because it went “no further than offering benefits to those who comply with certain conditions,” States “remain[ed] as free after the passage of this Act as before to pass laws rendering it impossible for any of their inhabitants to comply with such conditions.” Id., at 268. Thus, to avoid a Tenth Amendment problem, the Government relied on the traditional distinction between the Federal Government’s power to spend and its power to regulate:

“The distinction between an application of the Federal lawmaking power to enforce compliance with the desire of Congress and the use of the spending power to offer benefits which might persuade people to that end [was] recognized in this manner by th[e] first Congresses.

“When the United States goes no further than extending benefits to citizens who arrange their affairs in