A constitutional right to federal grants?

Public-health and human-services groups have celebrated two federal court rulings overturning a string that Congress placed onto federal grants for overseas work to combat HIV/AIDS, and a broad coalition is now working to defeat the Bush Administration's appeal. On the specific issue at hand I'm totally with them, but at another level this makes me uneasy.

A US law enacted in 2003 requires nongovernmental organizations to pledge their opposition to prostitution as a condition of receiving funds for international anti-AIDS work. The issue is that non-profits doing such work feel they must work with sex workers and that in order to gain trust they have to refrain from trying to talk folks out of being prostitutes. That's a policy-tactics choice which I'm fine with but a lot of folks in the U.S. Congress aren't, hence the idea of requiring signing that pledge in order to get federal funding.

The pledge, it's worth noting, does not stop anyone from working with prostitutes nor require anyone to specifically try to stop them from plying that trade, and United Nations-affiliated programs were specifically exempted from it. You can read it for yourself here in one of the court decisions, see page 12. Actually the feds' interpretation of the pledge, according the court ruling, has been more that it would prevent a group from advocating the legalization of prostitution.

Regardless, the plaintiffs successfully turned this into a free-speech issue; the government's counterargument is that it's just a contract issue (there's no constitutional right to a grant and anyone not wanting to sign the pledge can just decline to accept one on those terms). It turns out that the Supreme Court has previously concluded that when the federal government is the funder, speech-inhibiting grant requirements have a big enough impact that they can constitute an unreasonable infringement of the First Amendment right to free speech. (See the page of that court document numbered 56.) As one of the federal judges put it, “The Supreme Court has repeatedly found that speech, or an agreement not to speak, cannot be compelled or coerced as a condition of participation in a government program.”

That was news to me but as stated it sounds like the government can't require somebody to sign a loyalty oath as a condition of receiving an entitlement, like a Social Security check. An interpretation that it means the government can't place conditions on a discretionary optional grant...is it just me or does that slope sound rather slippery? Can't we imagine scenarios where such a right to federal grant money could lead to funding going to groups carrying out far-less-positive agendas? Is that really what the Supreme Court meant?

And do we really want corporations (albeit in this case not-for-profit ones) to be able to assert inalienable rights just like an individual person? I thought Teddy Roosevelt settled that point a while back in the negative and I've always been glad he did. I dunno, could be I'm just exposing my ignorance of constitutional law and theory, but...really not sure the forest isn't being lost for the sake of a tree here.