It would be a good time for federalism advocates to make their voices heard. There's no reason to cede this power to the federal government.
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It's bad enough when Congress and federal agencies attach strings like this but when the executive, like literally the man not the branch, can effectively unilaterally write laws enforced by withholding unrelated funds we've reached a whole new level of throwing out the separation of powers.
Unsurprisingly, there is not often a consensus by the federal government to reduce its own power or for people whose tribe is in power to suggest that they devolve some of it back to the states.