Spending Power, United States v. Butler

[A18]

United States v. Butler, 297 U.S. 1 (1936)

The Agricultural Adjustment Act of 1933, which subsidized farmers at the expense of producers, was challenged when the United States brought suit against Butler to force payment of the taxes due under this act for processing cotton. The act relied for constitutional support on the General Welfare Clause--something which had not been upheld before.

The Court adopted a position that allows Congress, under the General Welfare Clause, to tax and spend on any topic it chooses, except where expressly prohibited by other provisions of the Constitution. But the Court found the act to violate the Tenth Amendment by invading the rights of the states.

ROBERTS, J., delivered the opinion of the Court in which HUGHES, VAN DEVANTER, McREYNOLDS, SUTHERLAND, and BUTLER, JJ., joined. STONE, J., delivered a dissenting opinion in which BRANDEIS and CARDOZO, JJ., joined.

[Emsworth]

Article I, Section 8, Clause 1 provides, "The Congress shall have 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."

From a purely academic standpoint, I would hold that the Madisonian view of the general welfare clause is correct. The phrasing "common defence and general welfare" was copied directly from the Articles of Confederation. The meaning of the term, as used in the Articles, was clearly in accord with the Madisonian interpretation. Would anyone even pretend that the Articles granted Congress the authority to spend as it pleased for the "general welfare"?

Thus, if we adhere to Madison's position, it would follow that the AAA was unconstitutional, and that the conclusion reached by the Supreme Court was correct.

Of course, all of this is from a purely theoretical and academic point of view. Naturally, adopting Madison's interpretation would have catastrophic consequences.

[A18]

Of course, all of this is from a purely theoretical and academic point of view. Naturally, adopting Madison's interpretation would have catastrophic consequences.

There were really three views on the spending power:
1. Madison would have limited the spending power to the objects explicitly enumerated in the Constitution.
2. Hamilton treated the words "General Welfare" as a policy question, and thus would have allowed Congress to spend money on anything it wanted.
3. Monroe took a middle ground position, eventually embraced even by Hamilton himself, which is very hard to define.

I agree that Madison's position is the correct one. But I think the Court can place real limits on the spending power without totally disavowing its more recent case law by adopting the middle ground position of Monroe.

But how should we define it? My idea flows directly from the Sixth Virginia Resolution of 1787, which states:

"[T]hat the National Legislature ought to possess the Legislative Rights vested in Congress by the Confederation; and moreover, to legislate in all cases for the general interests of the union, and also in those cases to which the States are separately incompetent, or in which the harmony of the United States may be interrupted by the exercise of individual Legislation."

There is no doubt that this resolution reflects much of the spirit behind the Constitution. It was sent to the Committee on Detail, where it was then transformed into the Enumeration of Powers in Article I, Section 8 -- including the spending power.

The words "General" and "Common" in the spending power seem to suggest that it should be limited to matters "to which the States are separately incompetent." I think that is the best test that could be formed.

I quote the resolution not because of any importance it has on its own, but for those specific words, which we know at least reflect the constitutionally legitimate principle of federalism, even when taken as a rule rather than a generic request.