The Spending Power - Constitutional Law I

The Spending Power

1. The Constitution of the United States provides that

   1. "The Congress shall have 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; but all Duties, Imposts and Excises shall be uniform throughout the United States . . . ." Art. I, § 8, cl. 1.

2. In United States v. Butler, the Court held that "the power of Congress to authorize expenditures of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution."

   1. The Court adopted the Hamiltonian view of Article I, § 8, cl. 1, of which maintained that the clause "confers a power separate and distinct from those later enumerated, is not restricted in meaning by the grant of them, and Congress consequently has a substantive power to tax and to appropriate, limited only by the requirement that it shall be exercised to provide for the general welfare of the United States." (pp. 453-54)

      1. Prior to this case, there had been a long debate with respect to this clause between the Hamiltonian view and the Madisonian view.

      2. In accepting the Hamiltonian view on the subject, the Court rejected the Madisonian view that asserted that the clause "amounted to no more than a reference to the other powers enumerated in the subsequent clauses of" Art. I,§ 8. (pg. 453)

         • The Madisonian view, rejected by the Court in this case, held "that, as the United States is a government of limited and enumerated powers, the grant of power to tax and spend for the general national welfare must be confined to the enumerated legislative fields committed to the Congress." (pg. 453)

3. In Stewart Machine Company v. Davis, where the Petitioner argued that the Social Security Act did not merely aid or encourage the states but coerced them into establishing unemployment compensation programs, the Court held that the Social Security Act did not coerce and did not go to far; thus, the Social Security Act was upheld. (pg. 569)

   1. However, Justice Cardozo's opinion did not reject the possibility that the spending power was subject to such implicit limiting principles. (pg. 569)

4. In Oklahoma v. United States Civil Service Commission, the Court held that Congress could properly condition the expenditure of highway funds on a state's compliance with a provision of the Hatch Act prohibiting state officials principally employed in federally funded programs from taking "any active part" in political activities. (pg. 569)

   1. "While the United States is not concerned with, and has no power to regulate, local political activities as such of state officials, it does have the power to fix the terms upon which its money allotments to states shall be disbursed. . . ." Oklahoma v. United States Civil Service Commission (pp. 569-70)

5. Coyne v. Smith stands for the proposition that Congress cannot directly tell a state where its capital is to be.

   1. BUT it may be permissible in certain cases to condition the receipt of federal funds upon the location of the capital.

6. In South Dakota v. Dole, the Court upheld a congressional statute that directed the Secretary of Transportation to withhold from a state a percentage of federal highway funds it would otherwise be entitled to should the state permit the purchase or public possession of alcohol by persons under the sage of 21. (pg. 627)

   1. The Court stated that "objectives not thought to be within Article I's 'enumerated legislative fields,' may nevertheless be attained through the use of the spending power and the conditional grant of federal funds."

      1. However, Congress' power under the spending power is not unlimited:

         • TEST - South Dakota v. Dole (pg. 627)

           • (1) "First, the exercise of the spending power must be in pursuit of 'the general welfare,'" though Congress is entitled to considerable deference with regards to judgments about what constitutes such welfare.

           • (2) "Second, we have required that if Congress desires to condition the States' receipt of federal funds, it 'must do so unambiguously . . . , enabl[ing] the States to exercise their choice knowingly, cognizant of the consequences of their participation.'"

           • (3) "Third, our cases have suggested (without significant elaboration) that conditions on federal grants might be illegitimate if they are unrelated 'to the federal interest in particular national projects or programs.'"

           • (4) "Finally, we have noted that other constitutional provisions may provide an independent bar to the conditional grant of federal funds."

         • The Court in Dole determined that

           • (1) The statute was in pursuit of the general welfare because "Congress found that the differing drinking ages in the States created particular incentives for young persons to combine their desire to drink with their ability to drive, and that this interstate problem required a national solution. The means it chose to address this dangerous situation were reasonably calculated to advance the general welfare." South Dakota v. Dole (pp. 627-28)

           • (2) "The conditions upon which States receive the funds . . . could not be more clearly stated by Congress." South Dakota v. Dole (pp. 628)

           • (3) "[T]he condition imposed by Congress is directly related to one of the main purposes for which the highway funds are expended - safe interstate travel." South Dakota v. Dole (pp. 628)

           • (4) The raising of the minimum drinking age would not violate anyone's constitutional rights. South Dakota v. Dole (pp. 628)

           • QUASI FIFTH ELEMENT: The Court also noted that South Dakota would lose only 5% of its allocated funds for its failure to follow federal policy but that this "mild encouragement" by...