The Constitution empowers Congress to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defence and general welfare of the United States. U.S. Const. art. I, § 8, cl. 1. Incident to this power, Congress may attach conditions on the receipt of federal funds, and has repeatedly employed the power to further broad policy objectives by conditioning receipt of federal moneys upon compliance by the recipient with federal statutory and administrative directives.
Petitioner State permitted persons 19 years of age or older to purchase beer pursuant to S.D. Codified Laws § 35-6-27. However, 23 U.S.C.S. § 158 permitted the reduction of federal highway funds otherwise allocable to a state if the state had a minimum drinking age below 21. Petitioner sought a declaratory judgment that § 158 violated Congress's spending power, U.S. Const. art. I, § 8, cl. 1, and that it violated U.S. Const. amend. XXI.
Can Congress withhold funds from states that don't require a minimum drinking age of 21 years old?
On certiorari, the Court held that: (1) the statute's indirect imposition of a minimum drinking age was a valid exercise of Congress's spending power, reasonably calculated to advance the general welfare and national concern of safe interstate travel; and (2) the Twenty-First amendment was not violated as the statute did not induce petitioner to engage in unconstitutional activities.