Nullification: How States Can Rein in Federal Spending

The United States federal government has far exceeded its constitutional limitations, regularly violating Americans’ God-given rights and exercising powers not delegated to it. State governments have an obligation to resist these usurpations by nullifying — that is, making unenforceable, or null and void — all unconstitutional federal actions.

Nullification has been — and is still being — effectively used to prevent the enforcement of unconstitutional federal laws and other actions. But how can states nullify federal spending? Opponents of nullification — including those calling for an Article V convention to propose a so-called Balanced Budget Amendment, with its many loopholes — frequently claim that nullification is helpless to rein in the federal government’s reckless spending.

However, such claims are false. States can use nullification to stop unconstitutional federal spending, just as they can use it to stop other federal usurpations. There are at least two specific ways states can do this.

One way is for state legislatures to enact a “State Sovereignty and Federal Tax Funds Act,” also referred to as an “escrow” law. Under this law, federal taxes would first be required to go into a special fund controlled by the state government. The state would then calculate the percentage of constitutional federal spending, meaning for purposes specifically enumerated in the U.S. Constitution for the federal government. Then, the state would send only that percentage of the funds to the Internal Revenue Service (IRS). Depending on the specific bill versions introduced, the remaining funds would either go toward state expenditures currently reliant on federal funding — thus ensuring the state is financially independent — or be returned to taxpayers.

This bill would save taxpayers a significant amount of their hard-earned income, considering that an estimated 80% of federal spending is unconstitutional. Additionally, it would put heavy pressure on the federal government to cut its reckless spending while also financially protecting the states from federal retribution.

State legislators are often reluctant to nullify unconstitutional federal laws as they fear losing their federal funding in retaliation. However, an “escrow” bill is one of the strongest responses to this threat, and would remind the federal government of its proper, limited place in the U.S. system of government.

This bill has been introduced in multiple states in previous years, including GeorgiaMissouriOhioOklahoma, and Washington. However, no state thus far has enacted it into law. To get serious about countering federal usurpations, and to gain the upper hand in the fight to restore constitutional governance and fiscal responsibility, state legislators must enact into law an “escrow” bill.

Another way states can rein in unconstitutional federal spending is to nullify the Federal Reserve, which itself is unconstitutional, and its current monopoly on currency. The central bank’s ability to create money has encouraged Congress to engage in reckless spending.

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