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Notes
A PROHIBITION ON PURELY LOCAL
PURPOSES: THE “GENERAL WELFARE”
LIMITATION OF CONGRESS’S SPENDING
POWER
ELIZABETH L. BROWN†
A
BSTRACT
Congress’s spending power allows the federal government to spend
money to provide for the general welfare of the United States. While
this “general welfare” language was initially understood as barring
Congress from apportioning money for local purposes, the Supreme
Court’s interpretation of the spending power has treated this limitation
as effectively nonjusticiable. Consequently, the spending power has
provided Congress with an attractive carrot to coax states into enacting
regulations that Congress could not achieve through its other powers.
This Note challenges the notion that the general welfare limitation
of the Spending Clause should be considered nonjusticiable. Instead, it
calls for a return to the original understanding that the spending power
could not be exercised to promote purely local purposes, an
understanding that the Court adopted in its earlier spending cases.
Relying on principles of collective action federalism and the
“substantial effects” test from United States v. Lopez, this Note
proposes distinguishing between general and local spending by looking
at the anticipated effects of the spending beyond the recipient of the
funds itself.
Copyright © 2022 Elizabeth L. Brown.
† Duke University School of Law, J.D. expected 2022; University of Mississippi, B.A. 2019.
My thanks to Professor Neil Siegel for his feedback and guidance regarding this Note as well as
Sadie Kavalier, Jonathan Ellison, Tranae Felicien, Michelle Lou, and the rest of the Duke Law
Journal team for their edits and suggestions. Thanks also to my parents for their continual
support. All errors are my own.
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1106 DUKE LAW JOURNAL [Vol. 71:1105
I
NTRODUCTION
What constitutes spending that “provide[s] for the . . . general
Welfare of the United States?”
1
Many would likely be surprised at the
notion that appropriations for “public education, roads, rivers, [and]
canals” were once considered to fall outside of the scope of the general
welfare.
2
Underlying why some viewed roads and canals as beyond
Congress’s spending power was the notion that they were “purely local
objects,” and Congress could only appropriate money for national
purposes.
3
Any spending that primarily aided a specific geographic
area—in other words, local welfare spending—lacked a sufficient
national characteristic to be within Congress’s powers.
4
While today
many matters once considered purely local have national effects,
Article I, Section 8 of the United States Constitution still remains. The
question is whether it has an enforceable meaning.
In United States v. Lopez,
5
Chief Justice William Rehnquist
declared that the Supreme Court was “unwilling” to conclude that
“there never will be a distinction between what is truly national and
what is truly local.”
6
However, the Court’s jurisprudence regarding
congressional spending suggests otherwise.
7
In fact, by permitting
Congress to define the limits of “general welfare,” the Court allows
Congress to appropriate money for purposes that benefit only a select
locality instead of the nation. Due to the Court’s abdication of its role,
1. U.S. CONST. art. I, § 8, cl. 1.
2. See Thomas Jefferson, Sixth Annual Message (Dec. 2, 1806), in 10 T
HE WORKS OF
THOMAS JEFFERSON 302, 317–18 (Paul Leicester Ford ed., 1905) [hereinafter Jefferson, Sixth
Annual Message] (calling for a constitutional amendment to give Congress the power to spend to
address the quoted list of matters).
3. S.
JOURNAL, 33d Cong., 1st Sess. 365–66 (1854) (statement of President Franklin Pierce).
4. See infra Part I (tracing the historical evolution of the Spending Clause).
5. United States v. Lopez, 514 U.S. 549 (1995); see also United States v. Morrison, 529 U.S.
598, 617–18 (2000) (“The Constitution requires a distinction between what is truly national and
what is truly local.”).
6. Lopez, 514 U.S. at 567–68.
7. See South Dakota v. Dole, 483 U.S. 203, 207 n.2 (1987) (questioning the justiciability of
the “general welfare” restriction on congressional spending). In addition to the justiciability
question raised by Dole, the Court’s current taxpayer standing doctrine also contributes to the
great deference afforded to Congress for questions of federal spending. David A. Super,
Rethinking Fiscal Federalism, 118 H
ARV. L. REV. 2544, 2563–64 (2005). The issues of taxpayer
standing are beyond the scope of this Note, however. The proposed framework for enforcing
limits on Congress’s spending power applies equally to questions of conditional spending where
states have standing to raise constitutional challenges.
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Congress has impermissibly invaded the domain of local governments
through its spending projects.
The examples of such local welfare spending abound. For instance,
the American Recovery and Reinvestment Act included bailing out a
failing shopping mall, subsidizing prototype kitchen appliances for
Martha’s Vineyard residents, and funding the construction of bike
trails to a major league baseball stadium.
8
One of the more famous
examples of local welfare appropriations was the $223 million
earmarked for the Gravina Island Bridge.
9
The bridge, deemed the
“Bridge to Nowhere” by its detractors, would have connected
Ketchikan, Alaska, with its airport on Gravina Island.
10
At the time,
Ketchikan had a population of 8,900 people, and the airport served
about 85,000 people annually.
11
Due to public outcry about the
wastefulness of the bridge and the remaining $177 million that Alaska
would have needed to supplement to complete the project, Alaska
ultimately diverted the money to other projects.
12
The bridge was never
built.
13
Concerns with the Court’s current Spending Clause jurisprudence
extend beyond wasteful spending. The broad discretion awarded to
exercises of the spending power creates avenues for Congress to
subvert limitations imposed on its other powers. Since the spending
power is independent of Congress’s other enumerated powers,
14
it is
8. TOM COBURN & JOHN MCCAIN, STIMULUS CHECKUP: A CLOSER LOOK AT 100
PROJECTS FUNDED BY THE AMERICAN RECOVERY AND REINVESTMENT ACT 2, 4, 10, 17 (2009).
9. Steve Quinn, Alaska’s ‘Bridge to Nowhere’ Plan Finally Scrapped, R
EUTERS (Oct. 23,
2015, 8:06 PM), http://reut.rs/1NYLvaK [https://perma.cc/ZD9P-DTD4]; Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A Legacy for Users, Pub. L. No. 109-59,
§§ 1114(e)(2), 1702, 119 Stat. 1144, 1174, 1272, 1385 (2005).
10. Ronald Utt, The Bridge to Nowhere: A National Embarrassment, H
ERITAGE FOUND.
(Oct. 20, 2005), https://www.heritage.org/budget-and-spending/report/the-bridge-nowhere-
national-embarrassment [https://perma.cc/D8XH-SE24].
11. Id.; ‘Bridge to Nowhere’ Timeline, P
ROPUBLICA (Sept. 24, 2008, 9:23 AM), https://
www.propublica.org/article/bridge-to-nowhere-timeline [https://perma.cc/EX4X-QGHL].
12. See Quinn, supra note 9 (noting that the “projected costs exceeded $400 million,” while
Alaska only “secured a $223 million earmark”).
13. See id. (“A proposed Alaska bridge . . . has officially been scrapped.”).
14. The connection between the spending power and the other enumerated powers has been
the subject of much debate, dating back to the Founding Era itself. Albert J. Rosenthal,
Conditional Federal Spending and the Constitution, 39 S
TAN. L. REV. 1103, 1112 (1987). A
prominent position, often referred to as the Madisonian approach, viewed the spending power as
an “authorization to Congress to spend money, but only in order to carry out powers specifically
conferred elsewhere in the Constitution.” Id.; see also infra Part I.A. However, since 1936, the
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1108 DUKE LAW JOURNAL [Vol. 71:1105
not inherently problematic that Congress can use its spending power
to accomplish a goal that another power could not. The dilemma arises
due to the federal government’s status as a government of limited
powers. If Congress can use federal funds to accomplish almost any
regulatory goal, the government of limited powers is one in name
only.
15
The Spending Clause does not dictate this abandonment of limits
on congressional power. As the text itself states, Congress can spend to
“provide for the . . . general [w]elfare of the United States.”
16
While
“general welfare of the United States” is a broad category, it is not all-
consuming. General does not mean local.
17
Thus, textually,
congressional spending that provides only for local welfare does not
fall within the power granted in the Spending Clause. But
distinguishing between general and local spending is not a simple task.
A workable framework for distinguishing between spending for
the local welfare and for the general welfare is increasingly necessary
if this limitation is to be operational today. This Note proposes
determining whether spending qualifies as for the general welfare by
looking at the anticipated effects of the spending beyond the recipient
of the funds itself. When the spending targets activities or goods that
have substantial effects on individuals, localities, and states beyond the
initial grant recipient, the spending can be said to provide for the
general welfare of the United States. Otherwise, it is spending for the
local welfare and, thus, beyond the power provided to Congress under
Article I, Section 8. This framework recognizes that, in an
interconnected society, actions in one locality can have broad impacts
Court has adopted the view that the spending power is not limited by the other enumerated
powers. United States v. Butler, 297 U.S. 1, 65–66 (1936).
15. For example, Congress can impose conditions on a state’s receipt of federal funding.
These conditions can include requiring the state to enact a regulation that Congress could not
directly implement under the Commerce Clause. Consequently, Congress’s ability to bribe the
states to impose regulations that it cannot enact itself undermines the limitations on the
Commerce Clause. See Lynn A. Baker & Mitchell N. Berman, Getting off the Dole: Why the Court
Should Abandon Its Spending Doctrine, and How a Too-Clever Congress Could Provoke It To
Do So, 78 I
ND. L.J. 459, 499–502 (2003) (detailing how Congress can use the Spending Clause to
circumvent limits on other enumerated powers).
16. U.S.
CONST. art. I, § 8, cl. 1.
17. See Alexander Hamilton, Opinion as to the Constitutionality of the Bank of the United
States (Feb. 23, 1791), in 3
THE WORKS OF ALEXANDER HAMILTON 445, 484–85 (Henry Cabot
Lodge ed., 1904) [hereinafter Hamilton, Opinion on National Bank] (noting that “general
welfare” did not include “merely or purely local” purposes).
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beyond its borders.
18
Accordingly, drawing the line between local and
general welfare requires more than looking directly at the recipient of
the funding. To account for these considerations, the proposed
framework employs principles from collective action reasoning
19
and
the “substantial effects” test from Lopez.
20
To that end, this Note proceeds as follows. Part I discusses
historical understandings of Congress’s spending power, beginning
with the debate between Alexander Hamilton and James Madison over
its limits and the views of several early presidents. It then examines the
Court’s interpretation of the Spending Clause. Part II presents a new
conception of the “general welfare” limitation. It briefly outlines some
principles of collective action reasoning, showing how certain activities
internal to a state or locality may have broader impacts that the states
do not account for or are unable to address. It then defines the general
welfare limitation and applies it to several examples of congressional
spending. Part III addresses additional reasons for this limitation,
noting why judicial intervention is necessary and why the Court’s
existing jurisprudence is insufficient to maintain the federal
government’s status as a government with limited powers, even with
added scrutiny of the coercive nature of some conditional spending
applied in National Federation of Independent Business v. Sebelius
(NFIB).
21
I.
THE DISAPPEARING “GENERAL WELFARE” LIMITATION
While multiple interpretations of the scope of Congress’s power
to provide for the general welfare have existed since the Founding Era,
the prominent early views lacked a belief that the first clause of Article
I, Section 8 gave Congress unlimited discretion in its spending
determinations. This Part discusses these original interpretations of the
18. See, e.g., Michele Starnini, Marián Boguñá & M. Ángeles Serrano, The Interconnected
Wealth of Nations: Shock Propagation on Global Trade-Investment Multiplex Networks, S
CI.
REPS., Sept. 11, 2019, at 1, 1–2 (discussing how economic crises in one country can cause
international impacts); Todd Sandler, Overcoming Global and Regional Collective Action
Impediments, 1 G
LOB. POL’Y 40, 40 (2010) (discussing the rise of positive and negative “cross-
border flows”).
19. See C
LINT PEINHARDT & TODD SANDLER, TRANSNATIONAL COOPERATION: AN
ISSUE-BASED APPROACH 16–18 (2015) (discussing collective action problems).
20. See United States v. Lopez, 514 U.S. 549, 560 (1995) (“Where economic activity
substantially affects interstate commerce, legislation regulating that activity will be sustained.”).
21. Nat’l Fed. of Indep. Bus. v. Sebelius (NFIB), 567 U.S. 519, 585 (2012).
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1110 DUKE LAW JOURNAL [Vol. 71:1105
Spending Clause and the development of the Court’s current
abandonment of restrictions on general welfare. It begins with the
debate between Hamilton and Madison about the clause’s relationship
to the other Section 8 powers. Then, it discusses the views of several
early presidents on the extent to which Congress could appropriate
money under the clause for improvement programs within states.
Finally, it addresses the Supreme Court’s treatment of the Spending
Clause from United States v. Butler
22
to South Dakota v. Dole
23
and how
current jurisprudence has departed from the early understandings of
the clause.
Under these initial interpretations of the Spending Clause, a key
limit on Congress’s power could be found in the phrase “general
welfare” itself: by stating spending should be for the general welfare,
the clause denied Congress the ability to solely spend for local
welfare.
24
Despite this historical understanding, the Supreme Court has
suggested that Congress is owed such great deference on the question
that a general welfare limitation may be nonjusticiable.
25
A. The Hamilton-Madison Debate over the Spending Clause
The initial dispute over the breadth of congressional power under
the Spending Clause centered around whether the clause even
provided an independent grant of power and if so, how broad that grant
extended. Hamilton, advocating for a broad understanding of the
clause, contended that it “embraces a vast variety of particulars, which
are susceptible neither of specification nor of definition” but those
particulars included only “[g]eneral and not local” appropriations.
26
Madison instead saw the clause as limited to spending for the other
22. United States v. Butler, 297 U.S. 1 (1936).
23. South Dakota v. Dole, 483 U.S. 203 (1987).
24. See, e.g., 39 A
NNALS OF CONG. 1841 (1822) (statement of President James Monroe)
(stating that Congress cannot “apply money in aid of the State administrations, for purposes
strictly local, in which the nation at large has no interest, although the State should desire it”); S.
JOURNAL, 33d Cong., 1st Sess. 364–69 (1854) (statement of President Franklin Pierce) (discussing
how proposed spending toward a “purely local object” was not within any of the classes of
appropriations for which the Constitution authorizes Congress to legislate); Hamilton, Opinion
on National Bank, supra note 17 (“Congress . . . cannot rightfully apply the money they raise to
any purpose merely or purely local.”).
25. Dole, 483 U.S. at 207 n.2.
26. Alexander Hamilton, Report on Manufactures
(1791), in 2 THE FOUNDERS’
CONSTITUTION 446, 446–47 (Philip B. Kurland & Ralph Lerner eds., 1987) [hereinafter Hamilton,
Report on Manufactures].
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enumerated powers.
27
While Hamilton’s viewpoint ultimately won out
in the courts and has come to be the dominant view,
28
the shared
understanding of limits on the spending power suggests that the current
acquiescence to Congress’s appropriation whims is misguided.
Hamilton’s approach to the clause has been categorized as having
two forms: a “strong” and “weak” version.
29
In its strongest form, the
clause extends far beyond spending by providing “an independent
power . . . to enact any law in furtherance of the general welfare of the
United States.”
30
Hamilton had indicated his support for this broad
grant of power at the Constitutional Convention but adopted a more
limited approach to the clause after ratification.
31
The weak
Hamiltonian view understood the Spending Clause as “a grant of
power to spend for the general welfare.”
32
As Hamilton articulated in
his 1791 Report on Manufactures, the clause gives Congress discretion
“to pronounce, upon the objects, which concern the general [w]elfare,
and for which under that description, an appropriation of money is
requisite and proper.”
33
This discretion was not unlimited under the
weak Hamiltonian position.
34
Only “[g]eneral and not local”
27. James Madison, Speech in the House of Representatives on the Bank Bill (Feb. 2, 1791),
in 2
THE FOUNDERS’ CONSTITUTION, supra note 26, at 446, 446.
28. United States v. Butler, 297 U.S. 1, 65–66 (1936); Jeffrey T. Renz, What Spending Clause?
(Or the President’s Paramour): An Examination of the Views of Hamilton, Madison, and Story on
Article I, Section 8, Clause 1 of the United States Constitution, 33 J.
MARSHALL L. REV. 81, 86–87
(1999).
29. Renz, supra note 28, at 87.
30. Id. at 103.
31. See 5 T
HE DEBATES IN THE SEVERAL STATE CONVENTIONS ON THE ADOPTION OF THE
FEDERAL CONSTITUTION 584, 588 (Jonathan Elliot ed., Philadelphia, J.B. Lippincott Co., 2d ed.
1901) [hereinafter E
LLIOT’S DEBATES] (noting Hamilton’s proposed grant of the “power to pass
all laws which [Congress] shall judge necessary to the common defence and general welfare of the
Union” to the federal legislature); Hamilton, Report on Manufactures,
supra note 26, at 447
(discussing that the spending power was “qualifi[ed]” by the requirement that “the object to which
an appropriation of money is to be made be General and not local; its operation extending in fact,
or by possibility, throughout the Union, and not being confined to a particular spot”); Rosenthal,
supra note 14 (noting Hamilton as a proponent of the view that the spending power is “a grant of
power to spend . . . but only for general, as distinguished from local or particularistic, purposes”).
32. Renz, supra note 28, at 124.
33. Hamilton, Report on Manufactures, supra note 26, at 447.
34. See Hamilton, Opinion on National Bank, supra note 17 (noting that spending money
for a “merely or purely local” purpose was an “exception” to Congress’s discretion).
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1112 DUKE LAW JOURNAL [Vol. 71:1105
appropriations would be permitted.
35
Appropriations whose
operations were “confined to a particular spot” would not qualify.
36
Madison viewed the spending power as limited solely to spending
involving the other enumerated powers.
37
He understood the clause
primarily as “explain[ed] and qualif[ied]” by the other clauses in
Article I, Section 8 and not as an expansion of Congress’s enumerated
powers.
38
For Madison, the constitutionality of congressional spending
focused on an inquiry into whether the “particular measure” to which
the money would be spent was “within the enumerated authorities
vested in Congress.”
39
Madison’s interpretation has clear faults. It
arguably nullifies the general welfare portion of the clause of any
meaning.
40
The Necessary and Proper Clause would cover most, if not
all, of the purposes Madison articulated for the spending power.
41
As
Justice Joseph Story put it, Madison’s argument suggests that the
clause providing the spending power “ought not to be in the
Constitution.”
42
Consequently, Hamilton’s weak position eventually emerged as
the leading view when the Supreme Court announced its adoption of it
in United States v. Butler.
43
Notably, though, both positions in the early
spending power debate understood the clause as restricted. Even
Hamilton’s interpretation suggested that Congress’s discretion over
spending should not apply when spending on local matters.
44
B. Early Presidential Views on the Spending Clause
Original understandings of the impermissibility of localized
congressional spending are further evident from the practice of several
35. Hamilton, Report on Manufactures, supra note 26, at 447.
36. Id.
37. Renz, supra note 28, at 108–09.
38. T
HE FEDERALIST NO. 41, at 47 (James Madison) (J. & A. McLean 1788); 4 ELLIOT’S
DEBATES, supra note 31, at 567.
39. 4 E
LLIOT’S DEBATES, supra note 31, at 552.
40. 1 J
OSEPH STORY, COMMENTARIES ON THE CONSTITUTION OF THE UNITED STATES
§ 919 (Thomas M. Cooley ed., 4th ed. 1873).
41. Renz, supra note 28, at 121.
42. S
TORY, supra note 40.
43. See United States v. Butler, 297 U.S. 1, 66 (1936) (“[T]he 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. But the adoption of the broader construction leaves the power
to spend subject to limitations.”).
44. Hamilton, Opinion on National Bank, supra note 17.
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early presidents who used their veto power to check what they viewed
as congressional expenditures outside of the spending power. From
Thomas Jefferson to James Buchanan, nearly every president took the
position that Congress could not spend federal funds for internal
improvements like roads and canals, since such expenditures were
viewed as targeting local, rather than national, objects.
45
Jefferson’s election in 1800 marked a triumph for Madison’s
interpretation in the executive branch.
46
As president, Jefferson called
for a constitutional amendment to provide Congress with the ability to
appropriate money for “public education, roads, rivers, canals, and
such other objects of public improvement” because such spending was
not included in Congress’s enumerated powers.
47
Madison himself
vetoed a congressional bill aimed at funding internal improvements.
48
Though James Monroe departed from the Madisonian approach,
49
he
adopted the distinction of national versus local spending as the
limitation.
50
He remarked that Congress cannot “apply money in aid of
the State administrations, for purposes strictly local, in which the
nation at large has no interest, although the State should desire it.”
51
Under his view, not all internal improvements were barred: Congress
could appropriate money to fund certain roads that promoted national
interests in transportation for commerce and national security.
52
This distinction between national and local spending
appropriations transcended party lines. Democratic-Republican,
Whig, and Democratic presidents understood the spending power as
45. See Lynn A. Baker, Constitutional Ambiguities and Originalism, 103 NW. U. L. REV. 495,
513 (2009) [hereinafter Baker, Constitutional Ambiguities and Originalism] (“[N]umerous
Congresses from 1800 to 1860 enacted legislation providing for internal improvements . . . .
[A]lmost every President during that period vetoed such legislation as unconstitutional.”). The
exceptions to this were James Monroe, in the later part of his presidency, and John Quincy
Adams. Id. at 513 n.77; David E. Engdahl, The Spending Power, 44
DUKE L.J. 1, 29 (1994).
46. See Letter from Thomas Jefferson to Albert Gallatin (June 16, 1817), in 2 T
HE
FOUNDERS’ CONSTITUTION, supra note 26, at 452, 452 (noting that the belief that Congress’s
spending power is “restrained to those [powers] specifically enumerated” was a “landmark”
division between the Federalists and the Democratic-Republicans).
47. Jefferson, Sixth Annual Message, supra note 2.
48. 30 A
NNALS OF CONG. 211–13 (1817) (statement of President James Madison).
49. See 39 A
NNALS OF CONG. 1838 (1822) (statement of President James Monroe) (rejecting
the view that Congress has “no right to expend money, except in the performance of acts
authorized by the other specific grants [of the Constitution]”).
50. Id. at 1841.
51. Id.
52. Id.
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1114 DUKE LAW JOURNAL [Vol. 71:1105
excluding local appropriations despite their parties’ differing views of
national power generally.
53
Jefferson, Madison, and Monroe were all
Democratic-Republicans.
54
President John Tyler, a Whig,
55
vetoed a
bill that “blend[ed] appropriations for numerous objects but few of
which agree[d] in their general features” even though his party
generally supported congressionally funded internal improvements.
56
Presidents Franklin Pierce and James Buchanan, both Democrats,
57
vetoed bills involving land grants to the states based on their view of
the congressional spending power.
58
Pierce noted that the Constitution
did not give the federal government power over “purely local
objects.”
59
From his perspective, allowing Congress to fund those local
projects would transform the states into mere lobbyists for the “bounty
of the federal government.”
60
Buchanan likewise argued that such non-
53. See, e.g., supra note 46 and accompanying text; Adam Silver, Consensus and Conflict: A
Content Analysis of American Party Platforms, 1840–1896, 42 S
OC. SCI. HIST. 441, 442–43 (2018)
(noting that the Democratic-Republican and Democratic parties viewed the national
government’s role as limited while the Whigs “adopted more positive government, prostatist
positions”).
54. Thomas Jefferson, U
NIV. OF VA.: MILLER CTR., https://millercenter.org/president/
jefferson [https://perma.cc/WWG3-MYKV]; James Madison,
UNIV. OF VA.: MILLER CTR., https:/
/millercenter.org/president/madison [https://perma.cc/3VP9-WGXR]; James Monroe, U
NIV. OF
VA.: MILLER CTR., https://millercenter.org/president/monroe [https://perma.cc/J86B-QBAA].
55. John Tyler, U
NIV. OF VA.: MILLER CTR., https://millercenter.org/president/tyler [https://
perma.cc/SV97-FM4E].
56. Letter from John Tyler, President of the United States, to the House of Representatives
(June 11, 1844), in 5 A
COMPILATION OF THE MESSAGES AND PAPERS OF THE PRESIDENTS 2183,
2184–85 (James D. Richardson ed., 1897) [hereinafter Tyler Letter]; Silver, supra note 53, at 443.
Tyler distinguished between permissible appropriations (improvements aimed at “the security
from the storms of our extended Atlantic seaboard of the vessels of all the country”) and
impermissible ones (improvements addressing “mere local influences”). Tyler Letter, supra, at
2184–85.
57. Franklin Pierce, U
NIV. OF VA.: MILLER CTR., https://millercenter.org/president/pierce
[https://perma.cc/462S-VR7U]; James Buchanan, U
NIV. OF VA.: MILLER CTR., https://
millercenter.org/president/buchanan [https://perma.cc/35PK-6E4B].
58. S.
JOURNAL, 33d Cong., 1st Sess. 361, 367 (1854) (vetoing a land grant to states for
asylums); Letter from James Buchanan, President of the United States, to the House of
Representatives (Feb. 24, 1859), in 7 A
COMPILATION OF THE MESSAGES AND PAPERS OF THE
PRESIDENTS, supra note 56, at 3074, 3074, 3076, 3078 [hereinafter Buchanan Letter] (vetoing a
land grant to states for colleges). Both Pierce and Buchanan saw no distinction between
Congress’s purchase of land for the states and a direct monetary grant to the states; thus, their
determinations that Congress could not appropriate money to the states for the proposed benefits
barred a land grant for the same purpose.
S. JOURNAL, 33d Cong., 1st Sess. 367 (1854) (statement
of President Franklin Pierce); Buchanan Letter, supra, at 3079.
59. S.
JOURNAL, 33d Cong., 1st Sess. 365 (1854) (statement of President Franklin Pierce).
60. Id. at 365–66.
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national spending would encourage legislators to focus on funding
local projects only benefitting their constituents rather than the
nation.
61
Thus, the spending power’s exercise for local projects could
undermine its efficacy for promoting the general welfare.
Together, these early views on the congressional spending power
point to an original understanding that the spending power was limited
by more than Congress’s discretion. It was understood that, at
minimum, Congress could not spend for “any purpose merely or purely
local.”
62
Reading the language of the clause solely as a grant of power
requires ignoring or discounting this history. The existence of this
limitation is of limited value without a method of enforcement, either
as a self-imposed restraint by Congress or as administered by the
courts. Both the historical examples discussed above and the current
political incentives demonstrate the improbability that Congress will
effectively apply this limitation itself. Thus, the Court’s doctrine on the
spending power plays a key role in the continued existence of the
general welfare limitation on congressional spending.
C. Butler, Helvering, Dole, and the Court’s Reluctance to Police
Spending
Despite the historical understandings about the local limit on
Congress’s discretionary spending for the United States’ general
welfare, the Supreme Court has retreated from enforcing any strict
restraints on this discretion. This Section tracks that development over
time. It begins with United States v. Butler, where the Court first
embraced the Hamiltonian interpretation and the distinction between
general and local.
63
Then it moves on to Helvering v. Davis
64
and
Steward Machine Co. v. Davis,
65
in which the Court upheld
congressional spending programs by noting their connection to
improving the national welfare. This Section concludes by discussing
South Dakota v. Dole and the Court’s turn toward viewing a general
welfare limitation as nonjusticiable.
61. Buchanan Letter, supra note 58, at 3076.
62. Hamilton, Opinion on National Bank, supra note 17.
63. United States v. Butler, 297 U.S. 1, 65–67 (1936) (“[T]he purpose must be ‘general, and
not local.’” (quoting Hamilton, Report on Manufactures, supra note 26, at 447)).
64. Helvering v. Davis, 301 U.S. 619 (1937).
65. Steward Mach. Co. v. Davis, 301 U.S. 548 (1937).
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1116 DUKE LAW JOURNAL [Vol. 71:1105
In United States v. Butler, the “first key case on the scope of the
Spending Clause,”
66
the Court addressed the debate between Madison
and Hamilton over the proper interpretation of the spending power.
67
Following the guidance of Justice Story in his Commentaries on the
Constitution, the Court adopted Hamilton’s interpretation as the
correct understanding for the clause and determined that Congress’s
spending power extended beyond its other enumerated powers.
68
The
Court also approved of Hamilton’s limitation on the scope of
congressional spending, stating that Congress could not appropriate
federal funds only for local welfare.
69
The Court in Butler did not
provide guidelines for the scope of general welfare, as it invalidated the
implicated congressional act on other grounds.
70
But the Court made
clear that it had the authority to invalidate spending for local purposes
despite the broad discretion afforded to Congress in determining what
provides for the general welfare.
71
The following year, in Helvering v. Davis, the Court showed its
reluctance to enforce limitations on the concept of general welfare but
maintained a distinction “between one welfare and another, between
particular and general.”
72
Helvering involved a challenge to the Social
Security Act’s pension and lump sum payments to persons over age
sixty-five.
73
The Court pointed to the national nature of the financial
insecurity of older people in the United States and the potential
problems that would arise in relying on the individual states to all
establish their own programs.
74
The Court noted that incongruence
between the states raised spillover concerns: any state that enacted an
old age pension program could attract the elderly to move into the state
which could overburden that state’s resources.
75
Thus, since Congress
was addressing a national problem, its spending promoted the general
66. Samuel R. Bagenstos & Ilya Somin, Common Interpretation: The Spending Clause,
C
ONST. CTR., https://constitutioncenter.org/interactive-constitution/interpretation/article-i/
clauses/755 [https://perma.cc/3KK6-YX8Y].
67. Butler, 297 U.S. at 65–66.
68. Id. at 66.
69. Id. at 66–67.
70. Id. at 68.
71. Id. at 67.
72. Helvering v. Davis, 301 U.S. 619, 640 (1937).
73. Id. at 634–36.
74. Id. at 644.
75. See id. (“A system of old age pensions . . . is a bait to the needy and dependent elsewhere,
encouraging them to migrate and seek a haven of repose.”).
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welfare.
76
In conducting its analysis, the Court noted the evolving
nature of the “general welfare,” stating that “[n]eeds that were narrow
or parochial a century ago may be interwoven in our day with the well-
being of the Nation.”
77
The Court therefore determined that
establishing the distinction between local and general belonged
primarily to Congress, subject only to rational basis review.
78
Steward Machine Co. v. Davis, which involved Congress’s
authorization of grants to the states to use for unemployment
compensation, also addressed the use of the spending power to further
national welfare.
79
The Court discussed the massive unemployment
problem the country faced nationwide during the Great Depression
and the need for federal action to avoid mass starvation.
80
Further,
while some states had established their own unemployment assistance
programs, others held out in order to remain economically
advantageous for businesses, shifting the burden of supporting the
unemployed to the nation.
81
Thus, Congress’s decision to permit grants
to the states to aid with their administration of unemployment
compensation promoted the general welfare by encouraging all states
to aid the jobless in a time of national crisis.
82
In South Dakota v. Dole, the Court delineated the limitations on
Congress’s conditional spending power.
83
The Court noted that the
spending power can be exercised only “in pursuit of ‘the general
welfare,’” but then questioned the justiciability of the general welfare
limitation.
84
In a footnote, the Court cited Buckley v. Valeo
85
to support
this uncertainty over the general welfare limitation.
86
In Buckley, in
response to the appellants’ argument that Congress’s spending was
contrary to the general welfare, the Court stated that general welfare
76. Id. at 645.
77. Id. at 641.
78. Id. at 640–41.
79. Steward Mach. Co. v. Davis, 301 U.S. 548, 577, 586–87 (1937).
80. Id. at 586.
81. Id. at 587–88.
82. Id. at 586–87.
83. South Dakota v. Dole, 483 U.S. 203, 207–08 (1987).
84. See id. at 207 & n.2 (noting the question of “whether ‘general welfare’ is a judicially
enforceable restriction at all”).
85. Buckley v. Valeo, 424 U.S. 1 (1976).
86. Dole, 483 U.S. at 207 n.2.
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1118 DUKE LAW JOURNAL [Vol. 71:1105
should be understood as a grant of power rather than as a limitation.
87
The Buckley appellants’ argument centered on the word “welfare” and
not the word “general” in general welfare: they did not attack
Congress’s spending on a contention that it was for local rather than
general welfare, but that it was poor policy and destructive to welfare.
88
The Court rightly rejected this position on the grounds that Congress
defines what spending promotes welfare.
89
This nonjusticiability of the
question of whether spending provides for welfare is separate from the
question of whether spending is for local or general purposes. While
the footnote in Dole signaling a potential rejection of the general
welfare limitation fails to distinguish between these two questions, the
Court’s brief analysis of whether the conditional spending at issue in
the case promoted the general welfare did mention the interstate
nature of the problem Congress sought to address.
90
Thus, the Court
sent mixed messages in Dole of its understanding of the general welfare
limitation, but clearly indicated its unwillingness to treat it like a
veritable limitation.
The suggestion in Dole that general welfare is nonjusticiable was
not an inevitable, or even a necessary, outcome as the Court’s previous
cases and the historical understandings of the spending power
demonstrate. The Court itself acknowledged in its spending cases that
Congress’s spending power “extend[s] only to matters of national, as
distinguished from local welfare.”
91
The difficulty arises in trying to
make that distinction. Yet, the Court need not throw up its hands and
declare the task impossible. Instead, it should return to the principles
articulated in cases like Helvering and Steward Machine Co. for
understanding why congressional spending that may look localized
instead presents a need for national action: the individual states and
localities face problems that they are unable to effectively solve
themselves.
87. Buckley, 424 U.S. at 90–91; Brief of the Appellants at 145, 151, Buckley v. Valeo, 424
U.S. 1 (1976) (Nos. 75-436, 75-437), 1975 WL 441595, at *145, *151.
88. See Brief of the Appellants, supra note 87, at 145 (arguing that “[d]irect government
subsidies to candidates and parties are contrary to the ‘general welfare’” by listing various harms
that such subsidies cause, such as “reduc[ing] the amount of influence that citizens have over their
representatives”).
89. Buckley, 424 U.S. at 90–91.
90. Dole, 483 U.S. at 207 n.2, 208.
91. United States v. Butler, 297 U.S. 1, 67 (1936).
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II.
COLLECTIVE ACTION AND “GENERAL WELFARE”
The Court’s reluctance to impose limits on the spending power
leaves Congress with the ability to skirt constraints on its other powers
so long as it is willing to use federal funds to entice states or localities
to do its bidding. However, as Hamilton duly noted, Congress “cannot
rightfully apply the money [it] raise[s] to any purpose merely or purely
local.”
92
Given Congress’s use of spending for regulatory aims and the
interconnected nature of modern U.S. society, determining what
purposes are “purely local” may require more than looking at the
recipient of the federal dollars.
93
Federal spending may be aimed at one
locality to address a broader national problem that exists due to
externalities caused by the actions of the locality. In certain cases,
Congress may be the only governmental body positioned to recognize
and adequately respond to those externalities.
94
Therefore, a framework to identify congressional spending that
provides for the general welfare of the United States should distinguish
between spending that is truly local and that which appears local but
serves a broader purpose. This Part proposes such a framework, using
the principles of collective action reasoning to demonstrate why certain
internal activities may impact national welfare. Section A explains the
basics of collective action federalism which suggests that individual
states may be ill-equipped to resolve certain issues and that the federal
government should intervene in such situations. Section B presents a
framework for distinguishing between local and general welfare using
this collective action basis. The proposed framework is then applied in
Section C to different existing and proposed spending programs: the
highway spending in Dole, the Lake Jackson Ecopassage, and the Gun-
Free School Zones Act reimagined as a conditional spending program.
92. Hamilton, Opinion on National Bank, supra note 17, at 485.
93. See, e.g., Matthew C. Waxman, National Security Federalism in the Age of Terror, 64
S
TAN. L. REV. 289, 339–43 (2012) (discussing how spending to promote counterterrorism efforts
in individual localities is necessary to avoid “‘domestic safe havens’ for terrorists” that could cause
“national-level” harms).
94. See Robert D. Cooter & Neil S. Siegel, Collective Action Federalism: A General Theory
of Article I, Section 8, 63 S
TAN. L. REV. 115, 138 (2010) (“[W]hen a negative externality is purely
national, or nearly so, the central government should control it.”).
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1120 DUKE LAW JOURNAL [Vol. 71:1105
A. An Overview of Collective Action Federalism
In a federal system, one of the key questions is of allocation:
determining which matters will be addressed by the national
government and which are left to the more local levels of government.
In drawing the line, some have focused on the abilities of the different
levels of government to recognize and resolve problems. Collective
action reasoning suggests that some problems cannot be solved by
individual actors and require coordination.
95
In some of these cases, a
more local, smaller government entity likewise may be unable to
recognize and resolve the issue while the larger government entity
could.
96
The connection between resolving collective action problems and
the powers given to Congress in the Constitution has been previously
recognized.
97
In a 2010 article, Professors Robert Cooter and Neil
Siegel proposed a theory of “collective action federalism” that framed
the Article I, Section 8 powers as “a coherent set” that “mostly address
two kinds of spillovers: interstate externalities and national markets.”
98
Under their model, Section 8 “authoriz[es] Congress to tax, spend, and
regulate when two or more states face collective action problems.
Conversely, governmental activities that do not pose collective action
problems for the states are ‘internal to a state’ or ‘local.’”
99
Where these
collective action problems exist, states are less effective than the
national government at resolving the issues.
100
Thus, as a guiding
principle for federalism, they argue that looking toward the existence
of collective action problems ensures that both the national and local
governments have “the power to do what each does best.”
101
The
federal government addresses problems that the states alone cannot,
while leaving the states to handle their own internal matters.
95. PEINHARDT & SANDLER, supra note 19, at 45–46.
96. Cooter & Siegel, supra note 94, at 137–38.
97. See generally id. (discussing the connection between Article I, Section 8 and collective
action problems).
98. Id. at 118–19.
99. Id. at 119.
100. See id. at 118 (“[M]uch of what the federal government does best is to solve collective
action problems that the states cannot solve on their own.”).
101. Id.
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The basic problem for states in addressing these collective action
problems is their inability to fully account for various externalities.
102
The issue of river pollution demonstrates this problem. Imagine that,
to encourage companies to create jobs in their states, Arkansas and
Mississippi permit factories to dump chemicals and other waste in the
Mississippi River without restrictions.
103
Louisiana, which is
downstream, cannot fully clean up its section of the river so long as
those upstream companies continue their actions. If Mississippi alone
sought to take action by regulating dumping, it would face a similar
problem to Louisiana and risk the loss of businesses to Arkansas where
they could continue dumping. Thus, Mississippi may hold out until
Arkansas also acts, not knowing that Arkansas may make the same
calculus, leading to unabated pollution.
104
The value of cleaning up the
river may be enough to encourage Mississippi to act regardless, but the
state may not choose the socially-optimal amount of regulation.
105
Mississippi could underregulate in this context for two reasons: first, its
regulations would be ineffective in completely solving the problem,
and second, some of the benefits of the regulations or costs of not
regulating would be felt outside of its borders (for example, in
Louisiana).
106
In other words, Mississippi would not internalize some
of the effects of the pollution since they are not felt within the state’s
borders. To solve this issue of river pollution, the states would either
need to work together, requiring numerous decisionmakers and
legislative bodies to reach an agreement, or look to the national
government for help.
Under the “internalization principle,” which calls for power to be
placed with “the smallest unit of government that internalizes the
102. Abigail R. Moncrieff, Cost-Benefit Federalism: Reconciling Collective Action Federalism
and Libertarian Federalism in the Obamacare Litigation and Beyond, 38 A
M. J.L. & MED. 288,
292 (2012).
103. Waste dumping in the Mississippi River is no mere hypothetical. See, e.g., Blythe
Bernhard, Mississippi River Is Awash in Toxins, Report Finds, S
T. LOUIS POST-DISPATCH (Mar.
23, 2012), https://www.stltoday.com/news/local/metro/mississippi-river-is-awash-in-toxins-report-
finds/article_6305c4a5-7db6-5ed6-a53b-22e79d96f18e.html [https://perma.cc/4ZNL-2G69] (reporting
that “[m]ore than 12.7 million pounds of toxic chemicals . . . were dumped into the Mississippi
River in 2010”).
104. See P
EINHARDT & SANDLER, supra note 19, at 20–25 (discussing how countries are
incentivized to take no action to reduce pollution where other countries also take no action to
avoid imposing costs on themselves without a reciprocated benefit).
105. Moncrieff, supra note 102, at 293–94.
106. Id.
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1122 DUKE LAW JOURNAL [Vol. 71:1105
effects of its exercise,”
107
this Mississippi River pollution example
would necessitate federal action. While the most immediate costs and
benefits of action flow beyond each of the three states’ borders, they
can be internalized by the nation.
108
The nation cannot simply pass on
the costs of inaction to others. Further, rather than relying on the
individual state governments to each ratify a proposal, the national
government would unite the various stakeholders in one body to
address the issue with a majority vote.
109
These same principles can
apply to the provision of national public goods.
110
Alternatively, if instead of a polluted river, the example pertained
to a lake located within one state, that state would face fewer
difficulties in trying to clean up the water by itself. The dilemma
regarding a business moving to another state due to policy differences
would remain, but the state’s voters and policymakers could inform
themselves of the issue and decide whether the value of a nonpolluted
lake outweighs those costs.
111
In such cases, the primary effects of the
policy choice would stay within the state. Federal expenditures in such
a situation where the effects are internalized within a state would
involve extensive contributions from nonbeneficiaries, whereas
requiring the state itself to fund the project would place the burden on
those who will primarily benefit from it.
112
Conversely, federal
expenditures in cases with interstate spillovers would spread the costs
among beneficiaries rather than placing the burden on one state and
allowing the other affected states to free ride.
113
Thus, collective action federalism provides an answer to the power
allocation question of federalism by pointing toward the effects of the
107. Cooter & Siegel, supra note 94, at 137 (emphasis omitted).
108. Neil S. Siegel, Free Riding on Benevolence: Collective Action Federalism and the
Minimum Coverage Provision, 75
LAW & CONTEMP. PROBS. 29, 46 (2012) (noting that
“internalizing an interstate pollution externality requires collective action among the affected
states, which justifies federal intervention” (emphasis omitted)).
109. Cooter & Siegel, supra note 94, at 141.
110. Id. at 137 (discussing the internalization principle in the context of federal spending for
national parks). Public goods, such as clean air, are those that multiple people can benefit from
without reducing their benefits to any individual person or without imposing an additional cost,
and that cannot feasibly be denied to people. P
EINHARDT & SANDLER, supra note 19, at 17.
111. See Cooter & Siegel, supra note 94, at 137–38 (discussing how “people affected by a
policy have more reason to inform themselves about it and to influence it”).
112. See id. (noting how “a local public good can be financed by a local tax, which primarily
hits the beneficiaries and misses nonbeneficiaries”).
113. Id.
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problem.
114
Where the problem presents costs and benefits that cross
state lines, collective action problems can arise that suggest the federal
government should step in.
115
If instead the consequences of a policy
choice will predominantly impact the residents of that state with
limited external effects, those in the state should be free to make that
choice without intervention from nonbeneficiaries and should not pass
on the costs of funding those local policies to those nonbeneficiaries.
116
B. A New Conception of “General Welfare”
These principles can provide an interpretative basis for general
welfare in the Spending Clause: whenever Congress is spending to fund
an interstate public good or to address an interstate negative
externality, its action “provide[s] for the . . . general [w]elfare of the
United States.”
117
In such cases, congressional action addresses public
benefits and costs that would otherwise be overlooked,
underaddressed, or unaddressed by a failure of individual state action.
However, when Congress spends to address purely local or intrastate
activities that lack significant impacts on other states, Congress’s
actions are addressing the welfare of a locality or state, rather than that
of the United States. In applying this collective action understanding
of general welfare as a limitation on congressional power, those cases
of intrastate welfare are beyond Congress’s constitutional spending
power. In those situations, if Congress cannot rely on another
enumerated power to justify its spending, it has intruded into the
domain reserved to the states under the Tenth Amendment.
118
This Note proposes using a similar framework to the substantial
effects test outlined in Lopez to determine what spending qualifies as
general welfare.
119
Under this framework, Congress’s spending will be
presumed to provide for the general welfare of the United States when
the funding targets activities or goods that have a substantial effect
beyond the individuals, localities, and states where the money
immediately goes. In such cases, though an actual collective action
114. See id. at 144 (discussing how collective action federalism supports “assign[ing] power to
the smallest unit of government that internalizes the effects of its exercise” (emphasis omitted)).
115. Id. at 137–38, 159.
116. Id. at 138.
117. U.S.
CONST. art. I, § 8, cl. 1.
118. See id. amend. X (“The powers not delegated to the United States by the Constitution,
nor prohibited by it to the States, are reserved to the States respectively, or to the people.”).
119. See United States v. Lopez, 514 U.S. 549, 560 (1995) (“Where economic activity
substantially affects interstate commerce, legislation regulating that activity will be sustained.”).
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1124 DUKE LAW JOURNAL [Vol. 71:1105
problem may not exist, the broad impact of the spending suggests that
Congress is addressing costs or benefits that are not adequately
addressed otherwise. Alternatively, if the effects of that spending only
have a limited impact on the United States or if the impact is too
attenuated, the costs and benefits associated with that good or activity
are likely already internalized within the recipient state or locality. A
state or locality’s inaction does not alter the analysis. A refusal to use
spending or regulation to address that good or activity, despite
Congress’s determination of its benefit, does not transform spending
with a localized impact into one with national effects. Additionally, in
cases of conditional spending, both the spending and the condition
would need to satisfy the general welfare limitation to be a permissible
use of congressional spending power.
While this reading of the general welfare limitation is not the only
way to distinguish between local and general spending, there are a few
reasons why this formulation is valuable if a general welfare limitation
is to be enforced. First, the historical articulations of the limitation
discuss the ability of states to address certain measures or the limited
nature of the benefits beyond state boundaries.
120
In his message to
Congress regarding his veto of internal improvements, Monroe noted
that “the [s]tates individually[] would be fully adequate” to address the
proposed improvements.
121
Likewise, Pierce stated that the spending
he vetoed targeted programs that the states had already established on
their own.
122
Second, the key cases where the Court developed its
spending doctrine relied on the ineffectiveness of state action in
explaining why congressional spending was promoting the general
welfare.
123
For example, assistance for the elderly through old age
pensions was justified congressional spending in Helvering due to the
inability of the “laws of the separate states [to] deal with it
effectively.”
124
Additionally, this framework also addresses the need
for a nonstatic notion of general welfare.
125
When incentives,
interactions, and information change, activities with effects once
120. S. JOURNAL, 33d Cong., 1st Sess. 365–66 (1854) (statement of President Franklin Pierce);
39 A
NNALS OF CONG. 1859 (1822) (statement of President James Monroe).
121. 39 A
NNALS OF CONG. 1859 (1822) (statement of President James Monroe).
122. S.
JOURNAL, 33d Cong., 1st Sess. 365–66 (1854) (statement of President Franklin Pierce).
123. Helvering v. Davis, 301 U.S. 619, 640–41, 644 (1937); Steward Mach. Co. v. Davis, 301
U.S. 548, 586–89 (1937).
124. Helvering, 301 U.S. at 644.
125. See id. at 641 (“Nor is the concept of general welfare static.”).
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circumscribed to a particular region may have broader effects. Lastly,
it acknowledges that matters appearing local may implicate the general
welfare of the United States.
An initial challenge of using the existence of interstate public
goods or spillovers is determining how broadly to view these
categories. In a highly interconnected society, mere policy differences
between states can cause spillover effects. To the extent that foot
voting occurs, policy decisions in one area can attract or repel
residents.
126
For proponents of federalism, the diversity of policy
decisions among the states is one of its primary benefits.
127
An
interpretation of national power that could conceivably be
manipulated to allow Congress to eliminate many, if not all, of these
differences would be self-defeating and, thus, undesirable.
However, requiring Congress to demonstrate the existence of a
collective action problem that states are unable to solve before it can
use its spending power also presents problems. For one, it would
constrain Congress’s ability to act proactively. A too strenuous
requirement would likely require Congress to make formal findings in
order to spend.
128
Further, imposing any real limit on the capacity of
Congress to spend for localized welfare could have significant
repercussions. There are over a thousand spending grants to state and
local governments within the Catalog of Federal Domestic
Assistance.
129
Questioning the constitutional legitimacy of some of
these programs may lead to an elimination of programs that states,
126. See Ilya Somin, Foot Voting, Federalism, and Political Freedom, in FEDERALISM AND
SUBSIDIARITY, NOMOS LV, at 83, 90–91 (James E. Fleming & Jacob T. Levy eds., 2014)
(discussing the ability of a foot voter to select between different state or local policies).
127. See Michael W. McConnell, Federalism: Evaluating the Founders’ Design, 54
U. CHI. L.
REV. 1484, 1493–94 (1987) (reviewing RAOUL BERGER, FEDERALISM: THE FOUNDERS’ DESIGN
(1987)) (describing the ability of localities to differ from each other as an “important advantage[]”
of federalism); Somin, supra note 126, at 83 (describing foot voting as “a tool for enhancing
political freedom”).
128. Cf. United States v. Lopez, 514 U.S. 549, 562–63 (1995) (“Congress normally is not
required to make formal findings as to the substantial burdens that an activity has on interstate
commerce.”).
129. R
OBERT JAY DILGER & MICHAEL H. CECIRE, CONG. RSCH. SERV., R40638, FEDERAL
GRANTS TO STATE AND LOCAL GOVERNMENTS: A HISTORICAL PERSPECTIVE ON
CONTEMPORARY ISSUES 9–10 (2019). The Catalog of Federal Domestic Assistance contains
listings of federal financial assistance programs available to state and local governments,
organizations, and individuals. U.S.
GEN. SERVS. ADMIN., 2019 CATALOG OF FEDERAL
DOMESTIC ASSISTANCE I–II (2019).
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1126 DUKE LAW JOURNAL [Vol. 71:1105
localities, and individuals have relied on and may open a Pandora’s box
of judicial activism.
The proposal uses the flexible standard of a substantial effects test
to address these concerns. While a Lopez-like restriction in the context
of the Spending Clause is subject to many of the critiques of Lopez
itself,
130
this Note proposes such a restriction because it draws from a
test that the Court has already approved of, and courts can
competently address questions of degree. First, given the reliance
interests involved in existing federal spending programs, it is more
feasible to enforce a restriction that would add some teeth to
federalism constraints without toppling the existing system. The line
drawing involved in the substantial effects test allows a court to
consider the specific facts involved in each program rather than
requiring analysis under a hardline rule.
131
The indeterminacy of the
rule’s application in a given situation is no more problematic than First
Amendment and substantive due process cases.
132
Such uncertainty
issues may call for deference in particularly close cases, but other
situations involving lengthy causal chains to demonstrate substantial
national effects would receive no deference.
133
The substantial effects
test is imperfect, and drawing lines between national and local objects
has historically presented difficulties,
134
but so long as “[t]he
Constitution requires a distinction between what is truly national and
what is truly local,”
135
courts cannot abandon policing the distinction
due to legal uncertainty. Despite its shortcomings, the Court has settled
on the substantial effects test as a method for drawing that line in
130. See, e.g., Brannon P. Denning & Glenn H. Reynolds, Rulings and Resistance: The New
Commerce Clause Jurisprudence Encounters the Lower Courts, 55 A
RK. L. REV. 1253, 1253–56
(2002) (noting the reticence of the lower courts to invalidate congressional statutes after Lopez);
Christy H. Dral & Jerry J. Phillips, Commerce by Another Name: The Impact of United States v.
Lopez and United States v. Morrison, 68 T
ENN. L. REV. 605, 605 (2001) (stating that the Lopez
test is “too imprecise to provide any sort of basis for a credible and predictable limitation on
congressional power”).
131. See United States v. Morrison, 529 U.S. 598, 610–16 (2000) (discussing and applying
various considerations in determining whether the act in question satisfied the substantial effects
test).
132. Steven G. Calabresi, “A Government of Limited and Enumerated Powers”: In Defense
of United States v. Lopez, 94
MICH. L. REV. 752, 804–06 (1995).
133. See id. at 804 (noting that difficult line-drawing does not require total deference since
“[s]ome assertions of the federal commerce power are truly beyond the pale”).
134. See Dral & Phillips, supra note 130, at 625–26 (discussing a prior “federal-local
distinction” test).
135. Morrison, 529 U.S. at 617–18.
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another context. Extending it to the Spending Clause would
reinvigorate the boundary between local and general welfare.
C. Applying the “General Welfare” Limitation
Given the case-specific nature of an interstate effects analysis,
demonstrating its application in practice requires a few examples to
show how the framework could be used to determine the legitimacy of
congressional spending. This Section applies the general welfare
limitation proposed above to the highway funding at issue in Dole, the
Lake Jackson Ecopassage, and the Gun-Free School Zones Act at issue
in Lopez reimagined as a condition on spending.
1. Federal Highway Funding in Dole. To first demonstrate the
impacts of adopting the general welfare limitation, this Subsection
addresses the spending at issue in Dole. In Dole, Congress conditioned
a portion of federal highway funds on a state raising its minimum
drinking age to twenty-one.
136
Applying the general welfare limitation
more rigorously to that spending would not change the result of the
case. Interstate highways are a quintessential public good because they
are nonrival and nonexcludable.
137
Further, a primary benefit of the
interstate highway system is its aid of transportation between the major
cities across the nation by easing the movement of goods across state
lines.
138
Thus, the involved spending funded a good with substantial
benefits beyond the individual state where the road would be built.
The condition placed on the funding also sought to address
interstate effects caused by non-uniform drinking ages.
139
The “lack of
uniformity in the States’ drinking ages created ‘an incentive to drink
and drive’ because ‘young persons commut[ed] to border States where
the drinking age [was] lower.’”
140
A state’s attempt to reduce the
alcohol-related fatalities of its young drivers by raising its drinking age
136. South Dakota v. Dole, 483 U.S. 203, 205 (1987).
137. See P
EINHARDT & SANDLER, supra note 19, at 17 (explaining that pure public goods are
nonrival because one individual’s consumption of a good does not detract others’ opportunities
to consume, and that pure public goods are nonexcludable because the good’s benefits are
available to both payers and nonpayers alike).
138. S
TAFF OF H.R. COMM. ON PUBLIC WORKS, 91ST CONG., BENEFITS OF INTERSTATE
HIGHWAYS 5, 7–9 (Comm. Print 1970).
139. Dole, 483 U.S. at 209.
140. Id. (alteration in original) (quoting P
RESIDENTIAL COMM’N ON DRUNK DRIVING, FINAL
REPORT 11 (1983)).
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1128 DUKE LAW JOURNAL [Vol. 71:1105
was undercut by its neighbors maintaining a lower drinking age.
Eighteen- to twenty-one-year-olds would typically drive across state
lines to drink and then return to the roads of their home state, thereby
perpetuating the problem of young, intoxicated drivers that the state
had attempted to solve.
141
These “blood borders” made up half of the
total borders between states.
142
Consequently, the states on their own
were unlikely to address this problem. Congress used conditional
spending to entice the states to solve this national, cross-border
problem. Therefore, the spending properly falls within the general
welfare limitation.
2. The Lake Jackson Ecopassage. The Lake Jackson Ecopassage
was built between 2009 and 2010 with $3.4 million in federal stimulus
money from the American Recovery and Reinvestment Act.
143
The
Ecopassage is a wall and culvert system underneath a portion of U.S.
Highway 27 that reduces the number of wildlife casualties that occur
on the road.
144
Prior to the Ecopassage’s construction, the stretch of the
highway “had the highest documented road mortality (for animals) of
any in the world.”
145
The Ecopassage may also reduce human fatalities
on the road given the danger of hitting an alligator or “cinder block”
sized turtles while traveling along a roadway.
146
Despite these benefits,
the one-mile Ecopassage
147
does not have substantial effects beyond
the locality where it was built. The principal benefit of the Ecopassage
is its reduction of animal deaths on the part of the road crossing Lake
Jackson.
141. See Measures To Combat Drunk Driving: Hearing Before the Subcomm. on Surface
Transp. of the S. Comm. on Com., Sci., and Transp., 98th Cong. 6 (1984) (statement of Sen. Frank
R. Lautenberg, Member, S. Comm. on Com., Sci., and Transp.) (discussing the problem of
“border slaughter”).
142. Id. at 36 (statement of Douglas M. Fergusson, Vice President for Highway Traffic Safety,
Nat’l Safety Council).
143. Joe Follick, Turtle Lives Hinge on Eco-Passage, L
EDGER (June 27, 2009, 9:36 PM), https:/
/www.theledger.com/article/LK/20090627/news/608076240/LL [https://perma.cc/56Y9-HAET];
T
OM COBURN, 100 STIMULUS PROJECTS: A SECOND OPINION 1, 11 (2009).
144. Lake Jackson Ecopassage, A
TLAS OBSCURA, https://www.atlasobscura.com/places/lake-
jackson-ecopassage [https://perma.cc/8JE2-A9MA].
145. Id.
146. Michael Markarian, Florida Turtle Tunnel Protects Motorists Too, H
UFFPOST, https://
www.huffpost.com/entry/florida-turtle-tunnel-pro_b_218084 [https://perma.cc/K3N6-EJPN] (last
updated Dec. 6, 2017).
147. Id.
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Although this local benefit is clear, determining how the
Ecopassage impacts the welfare of those beyond the locality is more
difficult. People who value the preservation of ecosystems may
consider themselves benefitted by the Ecopassage, even if they never
visited the project themselves, but the connection to the general United
States requires drawing a lengthy chain of events over an extended
period of time. The Ecopassage is located on a United States highway
near the Florida-Georgia border.
148
However, appropriations for a one-
mile stretch of roadway
149
lack the broad impact of generalized
highway funding, especially since the federal government built
alternative highways that reduce interstate travel on the road.
150
Only
those who drive through that mile-long segment during a time in which
an animal would have otherwise crossed the road are directly impacted.
Those drivers are likely to be locals. While their safety on public
roadways is important, it is not of national concern. The goal of
protecting the environment is likewise laudable, but in cases like the
Ecopassage, the proper authority to address this issue is the local
government because the need for the project was sufficiently
internalized. The local county commission had recognized the problem
and sought to address it.
151
A private donor had bought and donated
the additional land the state needed to complete the project.
152
Even
the Ecopassage’s supporters acknowledge that it was “a community-
based project.”
153
In light of the local nature of the project, the
appropriation to fund the Ecopassage would be impermissible under
the general welfare limitation.
Congressional funding of the Ecopassage also raises the issue of
aggregation. Congress did not fund it to save Lake Jackson’s turtles but
to create jobs as part of the stimulus package of the American
Recovery and Reinvestment Act.
154
The cumulative spending of the
148. Lake Jackson Ecopassage, supra note 144.
149. Markarian, supra note 146.
150. See U.S. 27, AA
ROADS, https://www.aaroads.com/guides/us-027-fl [https://perma.cc/
DUF7-97P2] (last updated May 3, 2015) (noting that U.S. 27 has been “[s]upplanted by Interstate
75”).
151. Markarian, supra note 146.
152. Id.
153. Id.
154. See C
OBURN, supra note 143 (discussing the Ecopassage as one of the projects included
as part of the American Recovery and Reinvestment Act’s attempt to “jumpstart the economy”);
C
OUNCIL OF ECON. ADVISERS, EXEC. OFF. OF THE PRESIDENT, ESTIMATES OF JOB CREATION
FROM THE
AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009, at 2 (2009) (noting that
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1130 DUKE LAW JOURNAL [Vol. 71:1105
numerous projects had national effects. But that does not transform a
local project into one with national effects. Permitting Congress to
piece together hundreds of localized spending projects with no shared
character besides their cumulative ability to impact the broader United
States obliterates the notion of a limitation. While aggregation has
been used in the context of the Commerce Clause,
155
the aggregation
involved in these types of spending programs differs since the programs
are not all necessary pieces for an effective regulatory regime,
156
but
rather funding divvied up by politicians to benefit the individual
localities they represent. Aggregation would be proper in cases of
broad spending programs that involve a specific shared characteristic,
but where that characteristic is itself a broad concept like impacting the
national economy, such aggregation should not save otherwise
unconstitutional appropriations.
3. The Gun-Free School Zones Act. After the Supreme Court
overturned the Gun-Free School Zones Act in Lopez, President Bill
Clinton suggested reinstating the restriction indirectly “by linking
[f]ederal funds to enactment of school-zone gun bans.”
157
Specifically,
he suggested conditioning existing money for “safe schools” on a
state’s enactment of the ban.
158
This proposal demonstrates how the
existing conditional spending framework creates opportunities for
undermining the existing limitations of the Commerce Clause. In some
cases, the general welfare limitation would restrict that avenue.
Federal funding of K–12 schools primarily produces a local
benefit. Students are educated within their communities, and the
federal money directed to a school district will be spent for the benefit
of the district’s students. This money does not substantially impact
those beyond the locality receiving the funds. Of course, some may
disagree. For example, Justice Stephen Breyer’s dissent in Lopez
the stimulus spending aimed to “save and create jobs, as well as to cushion the economic downturn
and make crucial public investments”).
155. See Gonzales v. Raich, 545 U.S. 1, 20–22 (2005) (applying the aggregating approach to
conclude that growing medical marijuana for personal use affects interstate commerce).
156. Cf. id. at 22 (upholding Commerce Clause regulation of intrastate activities since their
exclusion “would leave a gaping hole in the CSA”).
157. Todd S. Purdum, Clinton Seeks Way To Retain Gun Ban in School Zones, N.Y.
TIMES
(Apr. 30, 1995), https://www.nytimes.com/1995/04/30/us/clinton-seeks-way-to-retain-gun-ban-in-
school-zones.html [https://perma.cc/CQ9S-JLCG].
158. The President’s Radio Address, 1
PUB. PAPERS 611 (Apr. 29, 1995).
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argues that there are national benefits to a strong educational system.
159
Still, the localized nature of effects of the spending are further
prominent when the spending is directed at school safety as the
individuals potentially impacted by an “unsafe” school are those
attending or working at the school.
The condition itself suffers from the same problem. Even
accepting the existence of some effects beyond the recipient locality,
the primary effects of gun possession in a school zone are sufficiently
internalized such that the states and localities have acted as they saw
necessary.
160
The problem for the conditional spending under the
general welfare analysis for the Lopez regulation is not the attenuated
connection to commercial markets,
161
but the attenuation of the
connection beyond the locality in general. While the Court in Lopez
took issue with the tenuous link between possession of a gun in a school
zone and economic activity,
162
a court applying the general welfare
limitation would not look to impacts on interstate commerce, but the
extent to which a direct link can be drawn from the activity addressed
by the spending condition to the welfare of the nation. With a greater
number of steps necessary to connect the proposed condition in Lopez
and welfare beyond just the state choosing to regulate in order to
receive funds, the tie to general welfare is less viable. Accordingly, the
general welfare limitation would bar a congressional refashioning of
the regulation at issue in Lopez as a condition on federal spending.
This Section has sought to provide a method for distinguishing
between general and local welfare that draws on preexisting
interpretative frameworks, collective action federalism, and the
substantial effects test from Lopez. By looking toward the effects of a
particular problem, the proposal draws the line between local and
general based on the ability of the local or national government to
provide a solution to the problem, thus grounding the test in the
159. See United States v. Lopez, 514 U.S. 549, 620–22 (1995) (Breyer, J., dissenting) (noting
that “guns in schools significantly undermine the quality of education” and that poor education
impacts the ability of American workers to compete internationally).
160. See id. at 581–82 (Kennedy, J., concurring) (discussing the various measures of different
states and localities to address guns in schools).
161. See id. at 560 (majority opinion) (noting how “the possession of a gun in a school zone
does not” implicate “economic activity”).
162. See id. (“Even Wickard, which is perhaps the most far reaching example of Commerce
Clause authority over intrastate activity, involved economic activity in a way that the possession
of a gun in a school zone does not.”).
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1132 DUKE LAW JOURNAL [Vol. 71:1105
question of power allocation in a federal system. The test provides
courts a means to reinvigorate the general welfare limitation while
retaining flexibility to recognize the interconnectedness of modern
society.
III.
THE NEED FOR THE “GENERAL WELFARE” LIMITATION
An immediate challenge facing the proposed general welfare
limitation is its call for judicial intervention into issues of federalism. A
common argument against such intervention rests on the idea that the
states are sufficiently protected by political safeguards.
163
When
Congress’s actions seem to promote the interests of the states by
funding their local projects or the implementation of a regulatory
scheme, this argument that the states do not need judicial protection
appears even stronger.
164
Further, Congress’s decision to use a
conditional spending grant, rather than directly regulating when
possible, can promote federalism by allowing the states to participate
in what would otherwise be homogenous national programs.
165
The
Court’s intervention in imposing a general welfare limitation would
strip states of money they want and have come to expect. So, why
enforce this limitation?
This Part seeks to answer that question. At its core, the limitation
seeks to ensure that the division between the spheres of government is
not a mere historical relic in the spending context. Local governments
that are closer to a particular need should be expected to spend as
necessary to respond to that need. Injecting federal funds in these
contexts can overestimate the utility of a particular good.
166
Further,
imposing limitations on congressional power to protect state power in
other contexts only can mean so much while the spending power
remains an open avenue to bypass those restrictions.
163. Herbert Wechsler, The Political Safeguards of Federalism: The Role of the States in the
Composition of the National Government, 54
COLUM. L. REV. 543, 558–59 (1954).
164. See Erin Ryan, Negotiating Federalism, 52 B.C.
L. REV. 1, 38–39 (2011) (discussing the
role of state actors in promoting conditional spending grants).
165. See Samuel R. Bagenstos, Viva Conditional Federal Spending!, 37 H
ARV. J.L. & PUB.
POL’Y 93, 97–98 (2014) (arguing that conditional spending is a form of cooperative federalism
that involves state participation, with complete nationalization as the alternative).
166. See generally Alison F. DelRossi & Robert P. Inman, Changing the Price of Pork: The
Impact of Local Cost Sharing on Legislators’ Demands for Distributive Public Goods, 71 J.
PUB.
ECON. 247 (1999) (noting how Congress’s willingness to pay for certain goods for a locality can
be significantly greater than the individual locality’s willingness).
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This Part proceeds in two sections. It first discusses how political
safeguards in the spending power context are not independently
effective to police limits on congressional power. Despite arguments
that the spending power has “a built-in inner political check,”
167
political incentives for congresspeople encourage seeking spending for
one’s locality. In the conditional spending context, states are pressured
to comply with Congress’s demands since they can lack an alternative
funding basis. Then, the final section notes how the Court’s existing
limitations on conditional spending focus more on the way in which
Congress enacts the spending. As a result, these other limitations serve
only as procedural bars rather than addressing the problem of
Congress invading the domain of the states.
A. The Ineffectiveness of Political Safeguards
Due to the desirability of passing the expense for local projects to
the national government, states often are incentivized to acquiesce to
federal intervention. For state officials, refusing offered money is
difficult as they risk the bad optics of tax revenue partially funded by
their residents flowing to other states only instead of benefitting their
residents.
168
With federal money available, local interest groups are
empowered to “forc[e] reluctant executive and legislative officials to
accept the federal program.”
169
While states do not always accept
offered federal money, as demonstrated by the states that have refused
the Medicaid expansion funding,
170
their decision to turn down the
funds is “severely constrained” due to a “lack of equivalent, alternative
sources of revenue.”
171
A state’s ability to tax is limited by the amount
taken by the federal government: whatever money the federal
government takes through taxation is unavailable to states.
172
Following the imposition of the caps on state and local tax deductions
167. Ronald D. Rotunda, The Implications of the New Commerce Clause Jurisprudence: An
Evolutionary or Revolutionary Court?, 55 A
RK. L. REV. 795, 821 (2002).
168. See Follick, supra note 143 (quoting Florida’s Department of Transportation Assistant
Secretary as stating that it “[didn’t] make any sense” for the state to refuse funding for the Lake
Jackson Ecopassage because the money would otherwise go to a different state).
169. Paul L. Posner & Stephen M. Sorrett, A Crisis in the Fiscal Commons: The Impact of
Federal Expenditures on State and Local Governments, 10 P
UB. CONT. L.J. 341, 353 (1978).
170. Status of State Medicaid Expansion Decisions: Interactive Map, K
AISER FAMILY FOUND.
(Sept. 8, 2021), https://www.kff.org/734275c [https://perma.cc/H7HG-FU9U].
171. Lynn A. Baker, Conditional Federal Spending After Lopez, 95
COLUM. L. REV. 1911,
1936 (1995).
172. Id. at 1936–37.
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in the 2017 Tax Cuts and Jobs Act, one of the protections of a state’s
tax base from federal taxation was reduced, potentially increasing the
pressure on the states to accept federal funding.
173
In the case of conditional funding, there are often two groups of
states: those that already comply with or want to implement the
condition, and those that are otherwise unwilling to comply without
financial persuasion.
174
Since congresspeople are unlikely to impose a
condition with which their constituents would disapprove, such
conditions will likely only be implemented when the first group of
states, those that approve of the condition, are in the majority.
175
For
the legislators themselves, “a vote in favor of the conditional grant is
nearly always a vote to impose a burden solely on other states”: comply
or subsidize another state.
176
These conditions effectively act as a
method for the procondition states to bully the other states into
compliance.
Regarding localized spending, federal funding of a local project
allows legislators to benefit their constituents at the expense of the
nation. With most legislators naturally inclined to seek such funding,
any representative who chooses to abstain from pursuing special
funding for their constituents chooses to impose all of the cost of
funding other localized projects without returning any benefit.
177
Further, localized spending projects arise often to coax politicians to
support other legislation through coalition-building and logrolling,
where legislators agree to support each other’s pet projects to get
support for their own.
178
Permitting localized spending can promote a
“race to the bottom” of legislators attempting to form bargains with
173. See GRANT A. DRIESSEN & JOSEPH S. HUGHES, CONG. RSCH. SERV., R46246, THE
SALT CAP: OVERVIEW AND ANALYSIS 3 (2020) (noting that the elimination of the State and
Local Tax (“SALT”) deduction could require state and local governments to “match any
reduction in SALT revenue resulting from the cap with a reduction in spending on services
provided or increases in other revenue sources”); Brian Galle, Does Federal Spending Coerce
States: Evidence from State Budgets, 108 N
W. U. L. REV. 989, 992 (2014) (arguing that deductions
of state taxes from federal taxable income protects the state’s tax base because taxation at two
levels could reduce the state’s tax base but the SALT deduction “effectively offers states a
matching grant to impose their own taxes”).
174. Baker, supra note 171, at 1935–36.
175. Id. at 1940–41.
176. Id. at 1946.
177. Baker, Constitutional Ambiguities and Originalism, supra note 45, at 523.
178. Diana Evans, Policy and Pork: The Use of Pork Barrel Projects To Build Policy
Coalitions in the House of Representatives, 38 A
M. J. POL. SCI. 894, 894–95 (1994).
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each other to maximize the benefit to their localities and the cost on
those represented by the non-coalition members.
179
Further,
congressional spending in a legislator’s district can increase their
reelection chances.
180
In such cases, it is a lack of spending that may
impose a political cost; thus, the incentive to spend is augmented.
While in the country’s early history this tendency could be
rebuffed by a presidential veto,
181
presidents today face political
backlash from those who would have benefitted from such localized
spending and are unlikely to accept the cost of vetoing such
legislation.
182
Often these local spending projects are packaged with
necessary and massive spending bills such that most presidents hesitant
to support the objectionable spending would not ultimately veto those
bills.
183
Consequently, the political branches are incentivized to allow
this localized spending and are unlikely to police themselves.
B. The Insufficiency of the Coercion Limitation
While the Court’s invalidation of a condition on federal spending
in NFIB recognized the coercive problem presented by such
spending,
184
this renewed limitation on Congress’s spending power is
unlikely to reel in congressional spending. Chief Justice John Roberts’s
analysis in NFIB rested on three specific aspects of the Affordable
Care Act (“ACA”): it involved a significant portion of a state’s annual
budget, it placed a new condition on an established program, and it
179. Baker, Constitutional Ambiguities and Originalism, supra note 45, at 523.
180. See Steven D. Levitt & James M. Snyder, Jr., The Impact of Federal Spending on House
Election Outcomes, 105 J.
POL. ECON. 30, 50–51 (1997) (estimating that “an additional $100 per
capita” spent in an incumbent’s district “earns the incumbent approximately 2 percent more of
the vote”).
181. See discussion supra Part I.B.
182. Baker, Constitutional Ambiguities and Originalism, supra note 45, at 524.
183. See, e.g., Burgess Everett, Sarah Ferris, Marianne Levine & Melanie Zanona, Trump
Backs Down, Signs Stimulus Package, P
OLITICO (Dec. 27, 2020, 9:28 PM), https://politi.co/
3nWYTkk [https://perma.cc/Y7MT-BCYG] (noting that despite having “railed against” a
spending bill, former President Donald Trump “decided to sign the bill and not leave office amid
a maelstrom of expired benefits and a government shutdown”). Even if the president did veto
those bills, Congress could override that veto. See Philip Ewing, Congress Overturns Trump Veto
on Defense Bill After Political Detour, NPR (Jan. 1, 2021, 2:35 PM), https://www.npr.org/2021/01/
01/952450018/congress-overturns-trump-veto-on-defense-bill-after-political-detour [https://
perma.cc/G62X-335G] (noting that the Senate voted eighty-one to thirteen to override Trump’s
veto of the 2021 National Defense Authorization Act).
184. See Nat’l Fed. of Indep. Bus. v. Sebelius (NFIB), 567 U.S. 519, 581–84 (2012)
(characterizing the spending at issue as “a gun to the head”).
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1136 DUKE LAW JOURNAL [Vol. 71:1105
used the states’ commitment to that program to coerce them into
adopting a “new” program.
185
First, the spending at issue in NFIB was massive, with states facing
a “threatened loss of over 10 percent of a [s]tate’s overall budget.”
186
Second, the ACA enacted a post-acceptance condition on an
“entrenched” program.
187
A state which failed to comply with the
condition of Medicaid expansion would lose its entire existing
Medicaid funding even after it had developed significant statutory and
administrative schemes for the initial Medicaid program.
188
Third, in
the ACA, Congress instituted “a condition that did not merely change
the existing program but leveraged states’ desire to remain in that
program to get them to participate in a separate program.”
189
As the
Chief Justice stated, Congress did not merely expand the existing
Medicaid categories, but transformed it into part of a broader national
health insurance scheme.
190
The newly eligible persons under the
Medicaid expansion condition are treated differently than those in the
preexisting categories.
191
This change to Medicaid was so significant
that states could not have foreseen it when they accepted the funding
originally.
192
Altogether, these circumstances presented states with no
real choice but to accept and were thus coercive.
193
This framework for finding coercive spending is unlikely to
address the concerns of expansive congressional spending and the
Lopez loophole except in the most egregious cases. The coercion
limitation of NFIB does not meaningfully restrict Congress’s ability to
spend. The Chief Justice’s opinion establishes that, despite the
concerns regarding the states’ lack of alternative funding,
194
sizeable
grants alone are insufficient to be coercive based on the ultimate
decision to maintain the expansion as a separate funding program
185. Id. at 580–85; see also Samuel R. Bagenstos, The Anti-Leveraging Principle and the
Spending Clause After NFIB, 101 G
EO. L.J. 861, 864–65 (2013) (arguing that NFIB “is best read
as adopting a principle that will find coercion only where all three of these conditions are present
at the same time”).
186. NFIB, 567 U.S. at 582.
187. Bagenstos, supra note 185, at 873.
188. NFIB, 567 U.S. at 581.
189. Bagenstos, supra note 185, at 873.
190. NFIB, 567 U.S. at 583.
191. Id. at 584.
192. Id.
193. Id. at 588.
194. These also are discussed in Part III.A of this Note.
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untied to the pre-expansion funds.
195
If the post-NFIB limitation on
coercive spending is roping existing large federal grants into new and
unforeseeable programs, the limitation is more procedural than
substantive. The Chief Justice’s problem with the conditional spending
was the way Congress implemented it, rather than the spending in the
first place.
196
Thus, post-NFIB, Congress’s ability to avoid the
Commerce Clause limitations through conditional spending remains
intact, with the slight restriction that it cannot tie large portions of the
states’ budgets to compliance.
This coercion limitation, even if applied more strenuously than
NFIB suggests, is unable to address the political race to the bottom of
localized spending enabled by the current complete deference to
Congress’s understanding of general welfare. Enforcing the other
limitations presented in Dole could provide an alternative method of
addressing some of the concerns of conditional spending.
197
Justice
Sandra Day O’Connor articulated a stronger application of the
germaneness requirement in Dole which would limit Congress’s
conditional spending power by placing requirements on how the
money would be spent, thereby constraining the scope of regulatory
power under the Spending Clause.
198
However, it is unclear how much
this principle would limit Congress’s spending in actuality.
199
Further,
it is ultimately an indirect way to address the underlying problem with
Congress’s spending in these contexts—that Congress has invaded the
local domain reserved to the states.
200
195. See NFIB, 567 U.S. at 587 (“The Court today limits the financial pressure the Secretary
[of Health and Human Services] may apply to induce States to accept the terms of the Medicaid
expansion.”); Bagenstos, supra note 185, at 877 (“Even as limited by the Court’s judgment, the
Medicaid expansion offers states large amounts of federal money that have been obtained as
general federal taxes from the residents of states.”).
196. See NFIB, 567 U.S. at 583–84 n.14, 585 (noting that, while impractical, Congress could
have repealed Medicaid and reimplemented it with the new conditions without raising a coercion
problem and that “[n]othing in our opinion precludes Congress from offering funds under the
Affordable Care Act to expand the availability of health care, and requiring that States accepting
such funds comply with the conditions on their use”).
197. Baker & Berman, supra note 15, at 522–23.
198. South Dakota v. Dole, 483 U.S. 203, 215–16 (1987) (O’Connor, J., dissenting).
199. Samuel R. Bagenstos, Spending Clause Litigation in the Roberts Court, 58
DUKE L.J. 345,
369–71 (2008); Baker, supra note 171, at 1961–62.
200. See Dole, 483 U.S. at 217 (O’Connor, J., dissenting) (discussing the ability of the
unrestrained spending power to allow Congress “to invade the states’ jurisdiction” (quoting
United States v. Butler, 297 U.S. 1, 78 (1936))).
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The general welfare limitation proposed here instead places the
distinction between federal and local at the forefront of the analysis,
ensuring that the purpose for the restriction on Congress’s power is not
lost in the phrasing of a particular doctrinal test. Since the Constitution
places “purely local” objects beyond Congress’s grasp,
201
maintaining
the power allocation it sets forth requires determining what is purely
local. By focusing on whether the spending has a substantial impact
outside of the targeted locality, the proposed test looks to the
competencies of the national and local governments—in other words,
the power allocation question of federalism.
C
ONCLUSION
The Court’s current Spending Clause doctrine has drifted far from
the original understanding of Congress’s spending power as restricted
to general, rather than local, purposes. This Note has proposed a
possible method for reinforcing the distinction between general and
local by looking to the effects of a proposed spending program beyond
the locality where the funds initially go. While self-restraint by
Congress in exercising its power only for general purposes would be
preferred, political incentives suggest that this is unlikely. Instead, the
courts must ensure that the distinction between national and local in
the spending context is not a mere relic of the Founding Era.
201. Hamilton, Opinion on National Bank, supra note 17.
