The Basis of the Spending Power'

• Publication year: 1994
• Citation: Vol. 18 No. 02

UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 18, No. 2WINTER 1995

ARTICLES

The Basis of the Spending Power'

David E. Engdaht

TABLE OF CONTENTS

I. Introduction.............................. 215

II. The Bearing of Basis........................ 216

A. Some Consequences of Misattribution......... 216

B. The Insufficiency of the Orthodox "Basis"...... 220

III. The Usage of the "General Welfare" Phrase........ 224

A. "General Welfare" as a Preambulatory Phrase . . . 224

B. The "General Welfare" Phrase and the Principle of Enumerated Powers....................... 228

C. The "General Welfare" Phrase and Spending .... 235

IV. The "Property Clause" Basis for Spending......... 243

A. The Detail Committee's "Well Managing" Clause 243

B. Gouverneur Morris' "Property Clause" ........ 248

C. Confirming Gestures..................... 251

D. Ownership Powers and Governance Powers..... 256

V. Conclusion............................... 258

I. Introduction

No power of the federal government in the United States today entails more elaborate impacts on society than the power of Congress to spend; yet none has received so little critical analysis from legal scholars.

On those few occasions when commentators have troubled even to discuss the constitutional basis for federal spending (as distinguished from its many ramifications), without modern exception they have pointed to a subordinate phrase in the opening clause of the Constitution's Article I, Section 8. That clause gives Congress "Power To lay and collect Taxes," and the subordinate phrase explains that such taxes are "to pay the Debts and provide for the common Defence and general Welfare of the United States."(fn1)

This Article undertakes to demonstrate, however, that Congress' power to spend does not derive from that so-called "General Welfare" Clause, but instead derives from two overlapping but independent provisions found elsewhere in the Constitution. First, spending "for carrying into Execution" any enumerated power is authorized by the familiar Necessary and Proper Clause.(fn2) Second, Article IV gives Congress "Power to dispose of . . . Property belonging to the United States," one species of such property being money in the Treasury.(fn3) This "Property Clause" is ample to authorize all federal spending,(fn4) whether or not it is also authorized by the Necessary and Proper Clause.

II. The Bearing of Basis

A. Some Consequences of Misattribution

Whether the spending power derives from one clause or another is not an idle or merely academic question. There are consequences of major importance. For example, the Supreme Court has held that one's taxpayer status can give standing to challenge only such federal acts as assert "authority conferred by the taxing and spending clause of Article I, Sec. 8"; specifically, the Court has held that taxpayer status cannot give standing to challenge disposal "under the Property Clause, Art. IV, Sec. 3, cl. 2."(fn5) If, however, the power to spend is actually conferred by the Property Clause, and not by the taxing clause, the case law on taxpayer standing must be reconsidered, at least.

The Supreme Court, discussing spending with reference to the "general Welfare" phrase of the taxing clause, has said a "line must ... be drawn between one welfare and another, between particular and general."(fn6) Where the line "shall be placed cannot be known through a formula in advance of the event," it elaborated; "[t]here is a middle ground or certainly a penumbra in which discretion is at large."(fn7) This means that for each federal spending measure, one by one and perhaps provision by provision, it must be determined whether the spending goal is "general" enough for the measure to be sustained.(fn8) If, on the other hand, the spending power actually derives from the property clause, this occasion for cavil disappears, for the latter authorizes disposal whether or not any so-called "general Welfare" objective is served.

Attributing the spending power to the taxing clause occasions a more serious problem than the need to find some "general Welfare" objective; for it easily induces the mistaken conclusion that promotion of the general welfare, rather than merely the act of spending itself, is within Congress' constitutional power. Thus, one can be easily misled into believing that Congress may impose regulations to effectuate any end toward which it has chosen to spend, regardless how extraneous it is to the constitutionally enumerated powers.(fn9)

Most of the current legal controversies over federal spending involve whether and to what extent federal policies mandated as funding conditions are enforceable against recipients or against non-recipient program beneficiaries, and whether or to what extent such federal policies are capable of preempting contrary state law. These questions are too multifaceted and complex to examine exhaustively here,(fn10) but their analysis is substantially determined by whence the spending power derives. The powers conferred in Article I of the Constitution (where the Taxing Clause is found) all are described as "legislative Powers"(fn11)-that is, powers of governance, or governmental jurisdiction. The Article IV Property Clause, in contrast, confers powers characteristic of ownership, and no governmental jurisdiction at all.(fn12) If spending is a prerogative attributable to ownership, rather than a governance power, funding conditions are enforceable as contracts but not as statutes. Supremacy Clause consequences therefore cannot ensue, so that state policies contrary to extraneous policy aims of federal spending are not properly subject to preemption.

To which clause the spending power is attributed has ramifications even for the most fundamental legal issue regarding that power: whether Congress may spend for purposes beyond its enumerated powers at all. Every law student learns that James Madison thought it could not,(fn13) while Alexander Hamilton argued it could.(fn14) So long as one conceives of the spending power as derived from the Taxing Clause, the contest between Madison's view and Hamilton's remains a draw.(fn15) If one looked elsewhere but found no basis except the Necessary and Proper Clause, appropriation laws could be valid only insofar as they were calculated "for carrying into Execution" some enumerated power, and thus Madison's view must prevail. If, however, one recognizes the spending power as based on the Property Clause-which does not restrict dispositions of federal property to those effectuating enumerated powers-Hamilton's view is vindicated. Attention can then shift toward understanding the Hamiltonian thesis more accurately and applying it more consistently than the courts have done since 1937.(fn16)

This short list does not exhaust the implications of grounding spending power doctrine on one clause rather than another of the Constitution. I have dealt more elaborately with these and some other implications in another place.(fn17)

Constitutional law is not simply a branch of common law evolving by accretion and adaptation of precedent. Under a written Constitution, at least until habitual neglect reduces it to metaphor, argument tends to return sooner or later, and again and again, to the text. Professor Powell has aptly identified "The Revolutionary Role of the Text."(fn18) Even propositions repeated for generations often lose their credibility when impeached by careful study of the organic instrument. This force of the text is not metaphysical, or mystical, or even emotional, but rather dialectical and logical: At least where it is somewhat more than epigraphic, when the text is carefully parsed it can render some arguments untenable, others more or less credible, and (occasionally) some all but ineluctable.

Other provisions might limit its use, but the language conferring a power controls its inherent scope.(fn19) It therefore is appropriate, and might have far-reaching consequences, to reconsider the constitutional basis of the federal spending power.

B. The Insufficiency of the Orthodox "Basis"

Orthodox doctrine attributes Congress' spending power to the subordinate phrase, "to pay the Debts and provide for the common Defence and general Welfare of the United States," in the clause empowering Congress to lay and collect taxes. It is possible to promote the "general Welfare" in some ways by the very act of imposing a tax, as by taxing deleterious products or practices to make them economically unattractive. However, tax imposition by itself can do nothing to pay debts or to provide for defense. Orthodox doctrine therefore relies on a process of inference that Justice Owen J. Roberts in 1936 articulated this way:The Congress is expressly empowered to lay taxes to provide for the general welfare. Funds in the Treasury as a result of taxation . . . can never accomplish the objects for which they were collected unless the power to appropriate is as broad as the power to tax. [Therefore t]he necessary implication from the terms of the grant is that the public funds may be appropriated "to provide for the general welfare of the United States."(fn20)

It seems odd that this rationale-generations old even when Justice Roberts articulated it-has gone unchallenged for so long.

In the first place, since the only reason for seeking a basis in...