The government, like everyone else, is entitled to speak and express a point of view, at least when its speech doesn't violate a specific constitutional provision, such as the Establishment Clause.  According to the Court in Pleasant Grove v Summum (2009), a case which challenged a Utah town's decision to reject a monument promoting the Seven Aphorisms of the Summum religion after accepting various other privately donated monuments for its park, once speech is identified as government speech there is no First Amendment analysis required.  The First Amendment only applies to the regulation of private speech.  Questions become much more complicated, however, when the government is using its own dollars to promote or disfavor private speech.

Rust v Sullivan (1991) involved abortion-related speech restrictions attached to federal funding for providers of family-planning services.  In 1988, Health and Human Services announced a new, tough interpretation of federal funding legislation that would deny funding to any recipient who in the funded program counseled clients about abortions, referred clients to an abortion services provider, or even answered any client questions about abortion (except to say: "Abortion is not an appropriate method of family planning.")  Splitting 5 to 4, the Court upheld the abortion-related restrictions, suggesting that the government is free to use its own dollars to encourage only certain views it approves of, so long as it doesn't prevent the disfavored views from being expressed. The dissenters argued that the HHS rule was an unconstitutional viewpoint-based condition.

A decade later, in Legal Services Corporation v Velazquez, the Supreme Court faced an issue similar to that presented in Rust, but came out 5 to 4 the other way.  The case involved restrictions contained in a federal funding program for the Legal Services Corporation, which distributes funds to grantees who provide legal assistance to indigent clients in non-criminal cases.  The challenged restriction prevented grantees from, during the course of their representation of indigent clients, arguing that a state statute violated a federal law, or that a state or federal statute violated the Constitution.  The Court found the restriction to be viewpoint-based suppression of speech, and therefore to violate the First Amendment.  The Court (per Justice Kennedy) distinguished Rust, viewing Rust as involving a decision to not fund speech outside of the scope of the federal program, rather than an attempt to favor a particular viewpoint with respect to abortion.  In dissent, Justice Scalia said the LSC case was "on all fours" with Rust.

National Endowment for the Arts v Finley (1998) could easily be seen as raising issues similar to those presented in Rust and Velazquez.  The case involved legislation enacted by Congress in response to NEA funding of controversial artworks by artists such as Mapplethorpe and Serrano.  The legislation required the NEA to "ensure that (1) artistic excellence and artistic merit are the criteria by which applications are judged, taking into consideration general standards of decency and respect for the diverse beliefs and values of the American public."  The Court avoided having to face the issue of whether the Act was unconstitutional viewpoint-based discrimination by reading it to only require "consideration" of the decency issue, but not to prevent it from funding any art that it chose, regardless of how indecent it was or how little respect it showed for America's "diverse beliefs and values."  So interpreted, the Court found the Act not to offend the First Amendment.  This was almost too much for Justice Scalia, who found the Court's interpretation of the Act indefensible.  To him, the Act was intended to disfavor certain viewpoints expressed through art, and that was perfectly constitutional because the government ought to be free to spend its money as it sees fit.  Dissenting, Justice Souter also thought the majority's interpretation of the statute wrong, but reached a conclusion opposite that of Scalia: the law, Souter argued, was plainly unconstitutional viewpoint-based discrimination.

In U. S. v American Library Association (2003), the Court considered the constitutionality of a federal law that conditioned the receipt of federal dollars designated for enhancing the Internet services of public libraries on those libraries installing filtering programs that blocks the access of all patrons to obscene "visual depictions."  The American Library Ass'n challenged the regulation, arguing that the restriction would "overblock" and deny access to thousands of constitutionally protected Web pages.  Voting 6 to 3, the Court upheld the federal law.  The Court concluded that the law neither required public libraries to violate the Constitution nor imposed an unconstitutional condition on the receipt of federal assistance: it "did not distort the usual functioning of public libraries" (unlike Velazquez, where the usual functioning of private attorneys was found to be distorted by the funding condition).  In concurring opinions, two justices (Kennedy and Breyer) indicated that in a case where a library lacked the ability to "unblock" a constitutionally protected site, the law  might be vulnerable to an "as applied" First Amendment challenge.

Board of Education v Pico (1982) presents a somewhat different issue that the above-discussed cases.  It does not involve the use of government funds to (arguably) encourage or discourage certain types of speech by potential fund recipients.  Rather, the issue presented was whether the government, when using its dollars to purchase library books--or remove books previously purchased--is free to make whatever content-based decisions it pleases.  In Pico, several parents of students in a New York public school challenge the School Board's decision to remove nine controversial books from the school library.  Voting 5 to 4, the Supreme Court supports the parents' contention that the case should be sent back for a trial to determine whether the removal decision was an impermissible attempt to favor a particular political or social viewpoint, or whether the removal was a permissible decision based on valid educational concerns such an age inappropriateness, pervasive vulgarity, etc.  The four dissenters complain that the majority approach inappropriately places federal courts in the position of second-guessing decisions that should be left to local school boards.

Supreme Court Decides Religious Monuments are Government Speech (February 25, 2009) PROPOSED MONUMENT WITH THE "7 APHORISMS" Pleasant Grove City, Utah v. Summum Question presented: Is a Utah municipal park a public forum under the First Amendment for erection and permanent display of monuments displayed by private parties, and is the Summum religion entitled to an injunction that would allow it to construct in the park a religious monument containing the Seven Aphorisms of Summum and that would be similar in size, material, and appearance to an existing Ten Commandments monument donated by the Fraternal Order of Eagles to the city several decades ago? Decision: The Supreme Court, with Justice Alito writing for the Court, found that monuments accepted by the city for display in its park were government speech and therefore not subject to a First Amendment analysis.  Pleasant Grove is free to accept or reject private monuments, at least insofar as its acceptance of a monument cannot be seen to be an endorsement of religion.

Tests for Determining Constitutionality of Government Use of its Spending Power to Promote Favored Speech