[AnthonyMouse]

"Federal funding" is a misnomer. All of the funding comes from the taxpayers, and they're the same taxpayers. So when the federal government takes your money and then says "you can only have it back if you do X" they are not actually funding something, they are imposing a fine for not doing it.

[unmole]

This only works if you pretend fiscal transfers aren't a thing.

[AnthonyMouse]

If you want to paint an abstraction layer on top of it then all you have to do is make it symmetrical. The federal government is extracting money from the state's tax base that would otherwise be available to the state and conditioning its return on doing something, which is a financial penalty against the state for not doing it.

[alex43578]

Ok, and when they take money from my paycheck and give it to a strung-out, unemployed junkie who paid 0 federal taxes, what are they fining me for?

[AnthonyMouse]

It's a fairly simple equation: What's the thing you'd have to do (or stop doing) in order to receive (or not pay) the money?

You can argue about whether imposing a financial disincentive on working is a good or bad policy but there isn't really any case to be made for it not being what they're doing.