States should be able to do exactly what you say but over time the Federal government has leveraged itself into state business in such a was as to make it impractical to do any thing but go along. It is treated more like “business” among the states and not the rule of law. The biggest problem, other than the 17th Amendment, is that states, over time, have allowed the Federal government to collect tax money from their citizens with the expectation that that collected money will be returned and spent within their states. A recipe for disaster because the Federal government can simply withhold or refuse payment to any state that does not go along with “any” deal they cook up. Where in the Constitution does it say that the Federal government must return collected tax money to a state that balks?

Regaining state sovereignty is going to take a new or self reinvented breed of state legislatures willing to tackle direct Federal taxation of their people. An easy case can be made today that Federal spending is irresponsible, unsustainable, and detrimental to state prosperity which therefore represents criminal misuse of the collective resources of the citizens of the various states.

When they act like “o of course it is cause we said it is, I’m a federal agent I can do what ever I want.” give em a weird look like you don’t know what their talking about or their nuts or something.

Ultimately, the plain would be to challenge it in federal court on both jurisdiction and constitutional grounds making as big an issue of it as possible. We want to paint them as what they are horrible usurpers of rights trying to grab unlimited power at the expense of the people and Constitutional law.

When looking over nullification disputes it seems clear that the States only win when the public is generally on their side as sympathetic, so we need to win that battle above all.
Play the oppressed victim of an out of control crazy central government respecting no limits on their dictates.

All that being said a State Constitutional Amendment will at the very least prevent the State government from trying to impose this abomination on us should the Feds hopefully fail. So I regard this as it time well spent either way.