CRS Annotated Constitution
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Scope of the Power
The grant of power to “provide . . . for the general welfare” raises a two–fold question: How may Congress provide for “the general welfare” and what is “the general welfare” that it is authorized to promote? The first half of this question was answered by Thomas Jefferson in his opinion on the Bank as follows: “[T]he laying of taxes is the power, and the general welfare the purpose for which the power is to be exercised. They [Congress] are not to lay taxes ad libitum for any purpose they please; but only to pay the debts or provide for the welfare of the Union. In like manner, they are not to do anything they please to provide for the general welfare, but only to lay taxes for that purpose.”531 The clause, in short, is not an independent grant of power, but a qualification of the taxing power. Although a broader view has been occasionally asserted,532 Congress has not acted upon it and the Court has had no occasion to adjudicate the point.
With respect to the meaning of “the general welfare” the pages of The Federalist itself disclose a sharp divergence of views between its two principal authors. Hamilton adopted the literal, broad meaning of the clause;533 Madison contended that the powers of taxation and appropriation of the proposed government should be regarded as merely instrumental to its remaining powers, in other words, as little more than a power of self–support.534 From an early date Congress has acted upon the interpretation espoused by Hamilton. Appropriations for subsidies535 and for an ever increasing variety of “internal improvements”536 constructed by the Federal Government, had their beginnings in the adminis[p.154]trations of Washington and Jefferson.537 Since 1914, federal grants– in–aid, sums of money apportioned among the States for particular uses, often conditioned upon the duplication of the sums by the recipient State, and upon observance of stipulated restrictions as to its use, have become commonplace.
The scope of the national spending power was brought before the Supreme Court at least five times prior to 1936, but the Court disposed of four of the suits without construing the “general welfare” clause. In the Pacific Railway Cases (California v. Pacific Railroad Co.)538 and Smith v. Kansas City Title Co.,539 it affirmed the power of Congress to construct internal improvements, and to charter and purchase the capital stock of federal land banks, by reference to the powers of the National Government over commerce, and post roads and fiscal operations, and to its war powers. Decisions on the merits were withheld in two other cases, Massachusetts v. Mellon and Frothingham v. Mellon,540 on the ground that neither a State nor an individual citizen is entitled to a remedy in the courts against an alleged unconstitutional appropriation of national funds. In United States v. Gettysburg Electric Ry.,541 however, the Court had invoked “the great power of taxation to be exercised for the common defence and general welfare”542 to sustain the right of the Federal Government to acquire land within a State for use as a national park.
Finally, in United States v. Butler,543 the Court gave its unqualified endorsement to Hamilton’s views on the taxing power. Wrote Justice Roberts for the Court: “Since the foundation of the Nation sharp differences of opinion have persisted as to the true interpretation of the phrase. Madison asserted it amounted to no more than a reference to the other powers enumerated in the subsequent clauses of the same section; that, as the United States is a government of limited and enumerated powers, the grant of[p.155]power to tax and spend for the general national welfare must be confined to the numerated legislative fields committed to the Congress. In this view the phrase is mere tautology, for taxation and appropriation are or may be necessary incidents of the exercise of any of the enumerated legislative powers. Hamilton, on the other hand, maintained 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. Each contention has had the support of those whose views are entitled to weight. This court had noticed the question, but has never found it necessary to decide which is the true construction. Justice Story, in his Commentaries, espouses the Hamiltonian position. We shall not review the writings of public men and commentators or discuss the legislative practice. Study of all these leads us to conclude that the reading advocated by Justice Story is the correct one. While, therefore, the power to tax is not unlimited, its confines are set in the clause which confers it, and not in those of Sec. 8 which bestow and define the legislative powers of the Congress. 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.”544
Social Security Act Cases.—Although holding that the spending power is not limited by the specific grants of power contained in Article I, Sec. 8, the Court found, nevertheless, that it was qualified by the Tenth Amendment, and on this ground ruled in the Butler case that Congress could not use moneys raised by taxation to “purchase compliance” with regulations “of matters of State concern with respect to which Congress has no authority to interfere.”545 Within little more than a year this decision was reduced to narrow proportions by Steward Machine Co. v. Davis,546 which sustained the tax imposed on employers to provide unemployment benefits, and the credit allowed for similar taxes paid to a State. To the argument that the tax and credit in combination were “weapons of coercion, destroying or impairing the autonomy[p.156]of the States,” the Court replied that relief of unemployment was a legitimate object of federal expenditure under the “general welfare” clause, that the Social Security Act represented a legitimate attempt to solve the problem by the cooperation of State and Federal Governments, that the credit allowed for state taxes bore a reasonable relation “to the fiscal need subserved by the tax in its normal operation,”547 since state unemployment compensation payments would relieve the burden for direct relief borne by the national treasury. The Court reserved judgment as to the validity of a tax “if it is laid upon the condition that a State may escape its operation through the adoption of a statute unrelated in subject matter to activities fairly within the scope of national policy and power.”548
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