NFIB Sebelius Ginsburg



of the size and shape potential changes to Medicaid might
take. And absent such notice, sizable changes could not be
made mandatory. Our decisions do not support such a

In Bennett v. New Jersey, 470 U. S. 632 (1985), the
Secretary of Education sought to recoup Title I funds22
based on the State’s noncompliance, from 1970 to 1972,
with a 1978 amendment to Title I. Relying on  Pennhurst,
we rejected the Secretary’’s attempt to recover funds based
on the States’’ alleged violation of a rule that did not exist
when the State accepted and spent the funds.  See 470
U. S., at 640 (“”New Jersey[,] when it applied for and re-
ceived Title I funds for the years 1970–1972[,] had no
basis to believe that the propriety of the expenditures
would be judged by any standards other than the ones in
effect at the time.”” (citing Pennhurst, 451 U. S., at 17, 24-–
25; emphasis added)).

  When amendment of an existing grant program has no
such retroactive effect, however, we have upheld Congress’’
instruction. In Bennett v. Kentucky Dept. of Ed., 470 U. S.
656 (1985), the Secretary sued to recapture Title I funds
based on the Commonwealth’s’ 1974 violation of a spend-
ing condition Congress added to Title I in 1970.  Rejecting
Kentucky’’s argument pinned to Pennhurst, we held that
—————— —————–
21 THE CHIEF JUSTICE observes that ““Spending Clause legislation
[i]s much in the nature of a   contract.”” Ante, at 46 (internal quotation
marks omitted).  See also post, at 33 (joint opinion of SCALIA, KENNEDY,
THOMAS, and ALITO, JJ.) (same).  But the Court previously has rec-
ognized that “”[u]nlike normal contractual undertakings, federal grant
programs originate in and remain governed by statutory provisions
expressing the judgment of Congress concerning desirable public
policy.”” Bennett v.   Kentucky Dept. of Ed., 470 U. S. 656, 669 (1985).
22 Title I of the Elementary and Secondary Education Act of 1965
provided federal grants to finance supplemental educational programs
in school districts with high concentrations of children from low-income
families.  See  Bennett v. New Jersey, 470 U. S. 632, 634–-635 (1985)
(citing Pub. L. No. 89–-10, 79 Stat. 27).


the Commonwealth suffered no surprise after accepting
the federal funds. Kentucky was therefore obliged to re-
turn the money. 470 U. S., at 665-–666, 673-–674.  The
conditions imposed were to be assessed as of 1974, in light
of “”the legal requirements in place when the grants were
made,”” id., at 670, not as of 1965, when Title I was origi-
nally enacted.

  As these decisions show, Pennhurst’’s rule demands that
conditions on federal funds be unambiguously clear at the
time a State receives and uses the money-—not at the time,
perhaps years earlier, when Congress passed the law
establishing the program.  See also Dole, 483 U. S., at 208
(finding Pennhurst satisfied based on the clarity of the
Federal Aid Highway Act as amended in 1984, without
looking back to 1956, the year of the Act’’s adoption).

 In any event, from the start, the Medicaid Act put
States on notice that the program could be changed: “”The
right to alter, amend, or repeal any provision of [Medi-
caid],”” the statute has read since 1965, ““is hereby reserved
to the Congress.”” 42 U. S. C. §1304.  The ““effect of these
few simple words”” has long been settled.  See National  
Railroad Passenger Corporation v.  Atchison, T. & S. F. R.
Co., 470 U. S. 451, 467-–468, n. 22 (1985) (citing  Sinking  
Fund Cases, 99 U. S. 700, 720 (1879)).  By reserving the
right to “”alter, amend, [or] repeal”” a spending program,
Congress “”has given special notice of its intention to retain
. . . full and complete power to make such alterations and
amendments . . . as come within the just scope of legisla-
tive power.”   Id., at 720.

 Our decision in Bowen v. Public Agencies Opposed to   
Social Security Entrapment, 477 U. S. 41, 51–-52 (1986), is
guiding here. As enacted in 1935, the Social Security Act
did not cover state employees.  Id., at 44.  In response to
pressure from States that wanted coverage for their em-
ployees, Congress, in 1950, amended the Act to allow
States to opt into the program. Id., at 45. The statutory

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