Limit Federal Spending through Nullification and State Escrow Accounts

by Diane Rufino

The government has no legitimate powers that were not initially granted to it under the Constitution. There is no provision anywhere, nor is there any implied right under the Declaration of Independence or any other social compact theory, which permits the government to assume any more powers than originally granted to it. There is, of course, only one way to legitimately alter the Constitution and hence alter the function and scope of government, and that is through Article V’s amendment process. But only the states can approve those amendments.

As we all know, the only amendments which fundamentally altered the federal government were the 16th Amendment and the 17th Amendment.

The US Constitution is a “compact” (a social compact) among the states. It was an agreement among the states, fortified by their ratification, on how they would be managed and served by a common government. The Constitution created a Union of states (“united” States) and NOT the “United States.”  The Civil War would change that.

In the Constitution, the States delegated certain powers to the federal government, reserving all others to itself. And even with respect to those enumerated powers, there was clarification and limitation (as discussed in the state ratifying conventions, as well as in the very words, phrasing, and limiting clauses in the documents.  For example, the “Necessary and Proper” clause, which was meant to breathe life into the powers vested in the government under the Constitution, mean just that… “NECESSARY.”  As it turns out, the Supreme Court would quickly re-define “necessary” to mean “convenient”). With respect to the taxing power, the states clearly and freely delegated to the government the power to tax and spend.  However, the intent was that Congress can only tax and spend with regard to the seventeen specifically enumerated powers in Article I, Section 8.  Additionally, the “General Welfare” clause was not meant as a separate grant of power as it is assumed today.  Yet, we’ve seen how the government, through independent-minded justices on the Supreme Court, has used all these “limiting clauses” (including the Commerce Clause and now the taxing power) to grow government and to provide justification for every type of policy, program, or legislation that it wanted to enact.  Nevermind that the Federalist Papers were absolutely clear on the limited nature of the federal government. And all along, the States have refused to stand up, question, challenge, or nullify improper federal spending or improper federal regulation.

At this point, with respect to the taxing power alone, the federal government has plenary power to tax and spend. It has the “Necessary and Proper” clause, which the Supreme Court interpreted in 1819 to be a blank check to the government to do pretty much anything it finds “convenient” to further its power or enable its powers to tax and spend. The healthcare decision enlarged the government’s taxing power further, allowing government to tell Americans what it must purchase and punishing them (by taxing them) for not conducting themselves as the government demands.  And so the result now is a government that taxes and spends for pretty much anything it wants. Most of the spending is for unconstitutional purposes which means that taxing for such spending is also unconstitutional.

Congressional Attacks on State Sovereignty

Congress has been taking money from the citizens of states, and then offering that money back to states on the condition that legislators follow the will of Congress. Using these federal grants accompanied by mandates (which are rarely fully funded), Congress has turned state legislatures into their regional agencies rather than truly independent republican governments.

A radical social agenda and an erosion of the rights of the people accompany all of this.  While substantial efforts have been made to combat the social engineering and to protect peoples’ rights, we have missed one of the most important principles of the American founding.

Can we trust government to reverse course?  Could we trust it to police itself and divest those improper spending powers to state local governments where they can be used to responsibly and directly to benefit their own people?   The answer is no.

And that is why it must fall to the States to address the federal budget and use Nullification to enforce those changes.

The Solution

The solution I propose is called the “State Escrow Account” remedy. And yes, it’s based on the doctrine of Nullification.

Again, the government can only tax and spend for constitutional objects. It would seem to me that a lot of its spending is on unconstitutional objects, such as state grants (using money to do what it can’t do constitutionally, under the law of contracts) and education grants (such as Common Core; education is not a government matter; it’s a state function). If the federal government has so much money that it can spend on unconstitutional objects/projects, then clearly it is taxing the people TOO MUCH. If the states had ambition under the 10th Amendment and wanted to stand up for the People’s rights to keep their income, they should band together and challenge every bit of government spending. They should seek to have the federal government collect only revenue that goes to constitutional functions and NONE to bribe the states.  That extra money should go to the states. This way the states can legislate more responsibly to their own people and not according to government mandates and a one-size-fits-all strategy. I would also set up State Escrow Accounts. For example, all taxpayers who live in North Carolina would send their federal income tax forms to a state treasury office. The funds would go into a state Escrow Account. That office would review the federal budget and decide what percentage of spending goes to constitutional matters and what percentage goes to unconstitutional ones. The NC Treasury Department would send funds on to the US Treasury Department MINUS the percentage that represents unconstitutional federal spending. Those extra funds in the state escrow account would either stay there to fund our own education, highways, etc or would be refunded back to the taxpayer. In this way, the proper power structure would be restored (government is greatest where it is closest to the people), the States would be a lot stronger (as intended), they would be more responsive to the people, we would be free from the “one-size-fits-all” model that is ruining this country, many of the onerous regulations that are killing businesses and the free market would be repealed, the economy would grow and businesses would flourish, money would be put back into the pockets where it is spent the wisest – with the people who actually earn it, and America’s proclaimed notion of Liberty would be secure. States would be a lot more responsive to its people and they would be in a better position to protect their inalienable rights, as well as all the other  rights associated with a free and sovereign people,  if they were free from the financial bondage to the federal government. Individuals would be able to exercise their inalienable rights – to Life, Liberty, and Property – more freely, if they were free from legalized plunder and their financial bondage to the federal government. 

Who Has the Right to Determine the Extent of Government? 

The Declaration of Independence answered that question clearly, concisely, and before a “candid world.”

“When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them…..

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. –That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

The Declaration proclaims that America stands for the notion that the rights and liberties of the Individual, under Natural Law and Nature’s God, are paramount to any self-serving designs of government. And should that day come when the government assumes a position that threatens the liberty of the People, it is the right of the People to alter or abolish that government.

The Constitution embodies the principles articulated in the Declaration. It created a limited government, one organized around the interests of the States and the People and provided for their full participation. Through the Preamble of the Constitution itself and then the preamble to the Bill of Rights, we see the intent for limited nature of government in our lives.  The Preamble to the Constitution reads: “We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.” You can’t ask for a stronger expression of intent than that.

The preamble to the Bill of Rights reads: “The Conventions of a number of the States, having at the time of their adopting the Constitution, expressed a desire, in order to prevent misconstruction or abuse of its powers, that further declaratory and restrictive clauses should be added: And as extending the ground of public confidence in the Government, will best ensure the beneficent ends of its institution.”  Again, there can be no confusion about the intent of the States to limit the powers of the federal government and to prevent it from trying to pervert itself.

In other words, our Founding Fathers built a government whose purpose was not to control the people, but one that the people controlled. The government’s purpose was not to take or usurp the people’s sovereignty, but to provide only those things that the people could not provide for themselves, such as a standing army to protect them,  uniform currency and commerce, a uniform immigration and naturalization policy, and relations with foreign nations. They stipulated that the people’s sovereign rights had to remain with the people. The Founding Fathers made sure to grant to the People the ultimate authority over how they intended to be governed. It is the People who have power over their government. Unfortunately, collusion among decision-makers in Washington DC, as well as the three branches of government, to support party ideology over the preservation of individual liberty, has served to by-pass constitutional checks and balances and has acted to render the voice of the People as moot.  Not only has government legislated in a way that frustrates their liberty interests but it has also made sure it controls the means to brainwash them and to keep them from educating themselves in the manner that would best preserve that liberty.

The People, therefore, have the right to determine the extent of their government. If the government refuses to abide by the limits of the Constitution and continues to loot the American people to pay for objects and projects that are unconstitutional, then the proper recourse is with the People (to alter their government) or with the States (where much of the peoples’ powers are deposited).  If the People can’t “alter their government” through the only avenue open to them, which is the ballot box, then the States must interpose and Nullify unconstitutional acts of the federal government, including unconstitutional elements of the budget and unconstitutional exercises of the purse strings.

Remember the oath of office for all branches of the federal government and for all representatives and officials in state government calls for support and allegiance to the US Constitution… NOT the federal government.  The Constitution is the PEOPLE’s document. It protects them from the reaches of government.  So in effect, ALL government representatives and officials are OBLIGATED to respect We the PEOPLE…  and our right to be left alone by government.

The Declaration of Independence lists 27 abuses of the rights of the American colonists by King George and the British Parliament. It states: “A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.”  Today, we should be shouting: “A government whose character is marked by the actions of a tyrant is UNFIT to rule a free people.”

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8 years ago

> The solution I propose is called the “State Escrow Account” remedy. And yes, it’s based on the doctrine of Nullification.
In other words, it’s based on crackpottery, along the lines of “sovereign citizens”. SCOTUS has repeatedly rejected nullification and yet loons still pop out of the woodwork claiming to perform legal smoke-and-mirrors using it.

> For example, all taxpayers who live in North Carolina would send their federal income tax forms to a state treasury office. The funds would go into a state Escrow Account.
Which would not absolve NC citizens from their federal income tax liability, so citizens who chose to do this would be imprisoned for tax evasion. Smells of sovereign citizens again.

> Nevermind that the Federalist Papers were absolutely clear on the limited nature of the federal government.
Nevermind that the Federalist Papers were written by just three people who belonged to one faction of the Constitution’s signers, and another faction, the Anti-Federalists, the most prominent of whom was Thomas Jefferson, seem to be ignored.

8 years ago
Reply to  asdasdffasd

it would require a State gov with a spine. I don’t think any State currently meets that requirement.


Assdasdffasd, You seem to understand very little of the most critical of the checks and balances that our Founders created in order that our government remained limited and the liberty of the American people (who had just seceded from the most powerful empire on the planet at the time because that King and Parliament refused to respect the rights of the colonists under the English Bill of Rights of 1689). I’m talking about the federal nature of our government. State vs. federal government. Sovereign v. Sovereign. Each acting as jealous guardians of their power in order that neither invade the sphere of power of the other. This was the unique design feature of our American government and the gemstone upon which our liberty was to be secure. I mean, the Ninth and Tenth Amendments certainly are not obscure, And that’s what Nullification is all about. It’s about recognizing this critical document, giving it practical meaning, and about recognizing what Patrick Henry warned about in 1788 in the Virginia Ratifying Convention (Our eye must always be on Liberty….”give us that precious jewel and you can take everything else.”).
If you truly believe that the federal government has the exclusive right to judge the extent of its own powers, then you are unfit to preserve liberty for your grandchildren. You are fit for a master and deserve one.
If the federal government has the exclusive right to judge the extent of its own powers, as Madison and Jefferson warned in 1798-99,,it will continue to grow -- regardless of elections, the separation of powers, and other limits on government power. And then we will have a government no better than the one our forefathers fought a bloody revolution for or the ones that we fought a horrendous world war to wipe off the face of the planet.
You may trust 9 men who wear black robes and sit on the bench of the Supreme Court, but that’s all they are…. men (“motivated, as we all are, by the same passion for party, for power, for social change, and for legacy). And their power is the most dangerous because they are in office for life, and not responsible or accountable, as the other functionaries are, to Elective control. 4 members of the Court already believe that their job is to re-interpret the Constitution. How would you like it if an unaccountable group of people took a look at your mortgage agreement and decided that its terms all of a sudden don’t mean the same as when you signed the document? How would you like it if, for the good of the bank and its ability to lend more money to more people, it was going to increase your interest rate by 100% (that is, double it), or even triple it. A free people deserve transparency. They deserve to know that the document that protects them from the reaches of government is ironclad and means today what it meant yesterday and what it will mean tomorrow. Let me ask you this. You say the Supreme Court addressed the issue of secession and nullification and decided that they are unconstitutional. (I lump them both together since that is what most critics of Nullification seem to do). First of all, the justice who wrote the decision was a personal friend of Abraham Lincoln. He was promoted from Sec, of State to Chief Justice. He owed his career to Lincoln and the decision reads as if Lincoln himself wrote it. Second of all, Chase did not go to law school. He learned law pretty much by an apprenticeship. And you’re willing to say his decision should be worthy of being called “the law of the land”? Third, and finally, the ONLY job of the Supreme Court is to interpret strictly the Constitution (see Marbury v. Madison). As Justice Marshall wrote in that decision: “To take one step beyond the bounds of the Constitution is to violate the oath of allegiance that one takes to that document and that amounts to treason.” (I’ve paraphrased). Secession and Nullification are NOT addressed in the Constitution at all. Why? Because secession is a fundamental right, as explained in the Declaration of Independence. It is as fundamental to free individuals as is the inalienable rights of Life, Liberty, and Pursuit of Happiness. (Go to paragraph 2; it’s all right there). And Nullification is implied in the very nature of federalism and in the Tenth Amendment. It’s like saying to an individual… “You have the right to life but you can’t defend it.” Well, we DO have the right to life and we DO have the right to defend it. The implied right is our right to self-defense and self-preservation, which is also in second paragraph of the Declaration. If the issue is NOT in the Constitution, the Court has nothing to interpret. It is beyond their jurisdiction. The Declaration is not a document for the federal courts to interpret or dismiss. Thomas Jefferson wrote: “To this I am opposed; because, when all government, domestic and foreign, in little as in great things, shall be drawn to Washington as the center of all it will render powerless the checks provided of one government on another and will become as venal and oppressive as the government from which we separated.” This is great advice and one that no one seems to heed.

You may put your trust in SCOTUS, but it is poorly-placed trust, my friend. That Court has taken away your right to alter or abolish your government, even when it becomes destructive of your God-given rights, it has taken your money (ear-marked for “social security”) and said it is NOT your property after all and the government can do what it wants with it, it has forbidden you to express your religion in public institutions, it has said you have no right to be informed or consulted if you child wants an abortion, and it recently announced that the government can use the taxing power to coerce ordinary Americans into doing what it wants them to do, As for me, I put my trust in Thomas Jefferson and James Madison, the very men who remember why we separated from England and who wrote our founding documents (and therefore, understood them best)..


[…] How About Applying Nullification to the Entire Federal Budget ?? ( […]

8 years ago

Diane, I fear you have been a victim of disinformation. Your comment “As we all know, the only amendments which fundamentally altered the federal government were the 16th Amendment and the 17th Amendment.” is only half correct.
The Court said in Brushaber that the 16th gave “no new taxing power” to Congress, but that was concerning the 1913 Tariff Act. The “Income Tax” Americans deal with today, is in Subtitle A of the Internal Revenue Code (IRC) which was first put to paper in 1919. A through examination of the IRC by attorney Tommy Cryer in his Memorandum at and legal researcher Dave Champion in the book “Income Tax; Shattering the Myth”, clearly show that the only folks the Income Tax is imposed are “foreign persons” doing business inside the national borders of the USA and the money moving back across those borders. Which, by its nature, is a privilege and well within the scope of the national Congress to tax. That definition was obfuscated in post editions of the IRC in, as I recall, “22, ’39, ’54 and the more recent editions. This fact is not acknowledged by the government. They only threaten and bully when asked the simple question “What evidence do you have that the Code applies to me?” as is the case documented at against yours truly.
The quickest way to nullify the Federal Budget is to cease sending money to it. Stop all “withholding” and when the rabid IRS comes calling, demand they produce their authority, in writing, to even talk to you. As in: Federal Crop Ins. Corp v. Merrill, 332 U.S. 380, the Supreme Court held: “Whatever the form in which the government functions, anyone entering into an arrangement with the government takes a risk of having accurately ascertained that he who purports to act for the government stays within the bounds of his authority, even though the agent himself may be unaware of the limitations upon his authority.”
This is the proper path for the free and independent humans living in this country, as it gets to the root of the problem. That being; whether anyone has control over you or your property, ie “owns” your body or your stuff!
Finally I have a challenge for you. Prove me on this, take the time to confirm my suppositions and if they be the true, put you most excellent writing skills to this effort. Or, be cowed by the powers that now seek to control and degrade the People in The Land of the Free and do nothing.