Property Rights vs. Federalism?

The Castle Coalition warns that time is running out for the Senate to approve the Private Property Rights Protection Act, which is aimed at discouraging state and local governments from using eminent domain for economic development—i.e., forcibly transferring property from one private owner to another with the aim of generating jobs and tax revenue. Under the bill, which the House approved last year by a vote of 376 to 38, governments that engage in such projects would lose federal economic development funds for two years.

Because I cling to the notion that liberty is better served over the long run by faithful application of constitutional principles than by ditching them when they're inconvenient, I have mixed feelings about this bill. On one hand, it's disconcertingly similar to other federal attempts to dictate state or local policy by threatening to withhold money, such as the imposition of a de facto national alcohol purchase age and a de facto national speed limit, both of which constitutionalists objected to as violations of federalism. On the other hand, one could argue that in this case Congress is enforcing the correct reading of the Fifth Amendment's "public use" requirement, which the Supreme Court misinterpreted in Kelo v. New London, the decision that prompted the bill. (This position is reminiscent of the argument that the Protection of Lawful Commerce in Arms Act, aimed at pre-empting state lawsuits that blame gun manufacturers and dealers for crimes committed with their products, was justified as a way of enforcing the Second Amendment—a claim I did not buy because the threat the litigation posed to gun rights seemed too speculative.)

You could also say there's a close connection between economic development funding and the sort of eminent domain abuse this bill targets. Then again, supporters of the drinking age and speed limit mandates made a similar argument about the highway funding they threatened to withhold from uncooperative states. I'd be more comfortable if the bill simply refused federal funding for projects that rely on the misuse of eminent domain, as opposed to withholding economic development money generally. Abolishing federal economic development grants altogether would be even better, since it's hard to find constitutional authority for them. But now I'm talking crazy.