THE POWER OF CONGRESS TO TAX AND SPEND

“The Congress shall have the Power To Lay and collect Taxes, Duties, Imposts, and Excises, to pay the Debts and provide for the Common Defence and general Welfare of the United States; but all Duties, Imposts, and Excises shall be uniform throughout the United States.” Article 1, Section 8, Clause 1 of the U.S. Constitution

Politicians, always eager to bring home the pork to their constituents, have relied on the term “general welfare” in the Tax & Spend Clause to justify their spending habits. But the Constitution itself defines the term “general welfare” much more narrowly than anything Congress so desires. Rather, the term was simply used as a short-hand to refer to the rest of Congress’ enumerated powers listed in the remainder of Section 8.

James Madison specifically addressed this in Federalist 41, in which he wrote:

Some, who have not denied the necessity of the power of taxation, have grounded a very fierce attack against the Constitution, on the language in which it is defined. It has been urged and echoed, that the power "to lay and collect taxes, duties, imposts, and excises, to pay the debts, and provide for the common defense and general welfare of the United States," amounts to an unlimited commission to exercise every power which may be alleged to be necessary for the common defense or general welfare…

Had no other enumeration or definition of the powers of the Congress been found in the Constitution, than the general expressions just cited, the authors of the objection might have had some color for it; though it would have been difficult to find a reason for so awkward a form of describing an authority to legislate in all possible cases…

But what color can the objection have, when a specification of the objects alluded to by these general terms immediately follows, and is not even separated by a longer pause than a semicolon? If the different parts of the same instrument ought to be so expounded, as to give meaning to every part which will bear it, shall one part of the same sentence be excluded altogether from a share in the meaning; and shall the more doubtful and indefinite terms be retained in their full extent, and the clear and precise expressions be denied any signification whatsoever?

For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power? Nothing is more natural nor common than first to use a general phrase, and then to explain and qualify it by a recital of particulars. But the idea of an enumeration of

particulars which neither explain nor qualify the general meaning, and can have no other effect than to confound and mislead, is an absurdity, which, as we are reduced to the dilemma of charging either on the authors of the objection or on the authors of the Constitution, we must take the liberty of supposing, had not its origin with the latter.

A Constitution that specifically enumerated limited powers would be superfluous if the power to tax for “general welfare” was in fact a separate grant of power to Congress. As Madison noted in a January 21, 1792 letter to Edmund Pendleton, “If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the Government is no longer a limited one, possessing enumerated powers, but an indefinite one…”

In 1794, Madison objected on the House floor when Congress appropriated $15,000 for the relief of French refugees from San Domingo, arguing that “I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents…Charity is no part of the legislative duty of the government.”

In 1796, however, Congress refused to pass a relief bill for victims of a Savannah fire. William B. Giles, of Virginia, argued that members of Congress “should not attend to what…generosity and humanity required, but what the Constitution and their duty required.”

Thomas Jefferson, in a letter to former Treasury Secretary Albert Gallatin in 1817, wrote that “Congress has not unlimited powers to provide for the general welfare, but were restrained to those specifically enumerated, and that, as it was never meant that they should provide for that welfare but by the exercise of the enumerated powers, so it could not have been meant they should raise money for purposes which the enumeration did not place under their action; consequently, that the specification of powers is a limitation of the purposes for which they may raise money. "

Elsewhere, Jefferson wrote that Congress cannot “do anything they please to provide for the general welfare.... [G]iving a distinct and independent power to do any act they please which may be good for the Union, would render all the preceding and subsequent enumerations of power completely useless. It would reduce the whole instrument to a single phrase, that of instituting a Congress with power to do whatever would be for the good of the United States; and as they sole judges of the good or evil, it would be also a power to do whatever evil they please."

William Drayton, of South Carolina, wrote in 1828 that “if Congress can determine what constitutes the General Welfare and can appropriate money for its advancement, where is the limitation to carrying into execution whatever can be effected by money? How few objects are there which money cannot accomplish?...Can it be conceived that the great and wise men who devised our Constitution…should have failed

so egregiously…as to grant a power which rendered restriction upon power practically unavailing?”

In his 1854 veto of legislation to help the mentally ill, President Franklin Pierce argued that “I cannot find any authority in the Constitution for public charity. [To approve the measure] would be contrary to the letter and spirit of the Constitution and subversive to the whole theory upon which the Union of these States is founded.”

Similarly, in his 1887 veto of a bill for charity relief, President Grover Cleveland wrote “I can find no warrant for such an appropriation in the Constitution, and I do not believe that the power and duty of the General Government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit.”

Courts during the Progressive Era began to depart from this understanding of the term “general welfare” and instead adopted Alexander Hamilton’s contention that it was a separate grant of congressional authority. As Justice Roberts put it in United States v. Butler (1936), “It results that the power of Congress to authorize expenditure of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution.”

Even then, however, the Supreme Court held that the congressional power to tax and spend for the general welfare was not without limitations. Citing such luminaries as Hamilton, James Monroe, and Justice Joseph Story, the Butler Court has held that Congress’ power to Tax and Spend only extends to that national, as opposed to the local, welfare.

Additionally, the Butler Court held that Congress cannot use its power either to tax (penalize) or to spend (reward) as a means to regulate “a matter beyond the powers delegated to the federal government.” Similarly, Chief Justice Taft, writing in Bailey v. Drexel Furniture Co. (1922), made it clear that to:

Grant the validity of this [taxing scheme] and all that Congress would need to do hereafter, in seeking to take over to its control any one of the great number of subjects of public interest, jurisdiction of which the States have never parted with, and which are reserved to them by the Tenth Amendment, would be to enact a detailed measure of complete regulation of the subject and enforce it by a so-called tax upon departures from it. To give such magic to the word “tax” would be to break down all constitutional limitations of the powers of Congress and completely wipe out the sovereignty of the States.

Unfortunately, the courts have long since abandoned even this broad understanding of the term “general welfare” for one in which Congress has unbridled discretion in exercising its tax and spend powers. The Supreme Court has gone so far as

to allow Congress to coerce States into enacting desired legislation or face the prospect of losing federal monies.