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Governor George W. Bush had a memorable line in last Tuesday's final Presidential debate: "If this were a spending contest, I would clearly come in second." Vice President Al Gore had his own memorable phrase: "Governor Bush wants to spend the surplus on a tax cut for the top 1%." Quite apart from the oddity of treating a tax cut as a "spending" program, those two statements demonstrate a much greater difference between the two candidates for our nation's highest office than simply different levels of federal spending. They go to the heart of the candidates' respective visions of the role of government, and they go to the constitutional authority underlying those roles.
It should come as no surprise that spending issues have come to the forefront of our presidential politics. For the last sixty years, the Spending Clause of the Constitution has been viewed by the Courts and Congress alike as an unlimited power to tax and spend for whatever Congress deemed to be in the nation's best interest, and the federal government now spends about $1.5 trillion annually, roughly one-sixth of the gross domestic product. Moreover, as the Supreme Court has in recent years reigned in Congress's powers under the Interstate Commerce Clause somewhat, many constitutional law scholars believe that the invalidated regulations will simply be re-enacted as conditions on federal spending. Thus, not just every entitlement program, but many regulatory programs as well, will rest on the foundation of the Spending Clause.
That is a very weak foundation, at least as the clause was originally understood. Article I, Section 8 of the Constitution provides that "Congress shall have Power To lay and collect Taxes . . . to pay the Debts and provide for the common Defence and general Welfare of the United States." That clause contains limitations on the tax and spend power that are almost universally overlooked today. Imposing taxes in order to "pay the Debts," for example, was not a stand-alone power to incur whatever debts Congress wanted to incur, but only those debts that were incurred in fulfillment of Congress's other enumerated powers, such as the power to establish post offices and post roads. And the power to provide for the general Welfare was a power to make expenditures that were of general, rather than merely particular or local benefit.
The founders disagreed about the scope of the spending power, but none viewed it as expansively as it is currently interpreted. James Madison thought that the spending power was limited to furthering the other, specifically enumerated grants of power found in the Constitution. Even the staunchly nationalistic Alexander Hamilton, famous for his broad construction of constitutional powers, believed that the spending authority extended only to "general, and not local" purposes. And James Monroe specifically rejected the claim that the spending clause conferred on Congress "a right to raise and appropriate the money to any and to every purpose according to their will and pleasure."
So just what did the founders mean by the "general," as opposed to "local," welfare? Two examples offer some insight. The first Congress approved an appropriation for a lighthouse at the entrance of the Chesapeake Bay, but it rejected an appropriation to improve the navigability of the upper reaches of the Savannah River in Georgia. The lighthouse was of benefit to everyone in the coastal trade, and hence to the nation "generally," whereas the navigability of the Savannah River, which is internal to Georgia, was primarily of benefit to Georgia, and hence "local" in nature.
A second example involved lands in the Northwest Territory, in what is now the State of Ohio. Virginia had ceded the lands to the United States to serve as a "common fund" for the people of the United States. A dispute arose several years later when the Ohio Company, which was purchasing large tracts of land for settlement, wanted the federal government to provide free school lands to its settlers. The Constitution contains no enumerated power over education, and because giving away the lands was of benefit only locally, not generally, the Ohio Company's request was viewed as a violation both of the "common fund" restriction in the Virginia cession and of the "general welfare" restriction on the spending power. Only after it became clear that the grant of school lands enhanced the value of the surrounding lands were the grants deemed constitutionally permissible as a term of sale. And for decades thereafter, subsequent attempts in Congress to grant local school lands simply gratis and not as a term of sale either failed outright or met with a presidential veto due to unconstitutionality.
The "general" welfare restriction on the spending power is not just constitutionally required, however; it also makes good policy sense. The expansion of the spending power has distorted our fiscal priorities, encouraging local governments to undertake elaborate spending projects that would never meet political approval if local taxpayers had to foot the bill, especially when the tradeoff is adequate funding for schools or needed police and fire protection. Even more troubling is the fact that an unlimited spending power generates rent-seeking opportunities that are inherently contrary to the public good. With $1.5 trillion worth of such opportunities up for grabs every fiscal year and even more at stake with regulatory side effects, it is little wonder that many people and businesses feel compelled to buy a seat at the table through campaign contributions. No amount of McCain-Feingold campaign finance reform will cure the problem, because the contributions are merely a symptom of a spending power run amok. By taking aim at the root spending clause problem, Governor Bush's "coming in second on spending" is the winning ticket for the general welfare of our nation.
