The Upside Down Constitution: Part II (The Spending Power)

Having explained some of what I like about Michael Greve’s new book, The Upside Down Constitution, I will now offer one criticism of the book.  Michael believes that Congress has a spending power that allows it to spend money even if there is no other enumerated power.  This is the Hamiltonian interpretation, which allows spending for the general welfare, rather than the Madisonian interpretation, which limits Congress to spending on the enumerated powers.

The Madisonian interpretation would further the competitive federalism that Michael desires much more than the Hamiltonian interpretation in two ways.  First, Michael believes that programs where the federal government raises the funds and then shares those funds with the states – such as Medicaid – are a significant problem.  He seems to believe they are a bigger problem than programs like Medicare, which are exclusively federal.  He believes that the states drive such Medicaid funding and make it bigger than it otherwise would be.

Well, assuming that is true, the best way to stop such programs is to adopt the Madisonian interpretation, which would prevent the federal government from spending for the general welfare.  That would stop federal funding of Medicaid.  Instead, the states would have to raise the funds themselves.

But there is a second way that the Madisonian interpretation would help with competitive federalism.  It would also stop exclusively federal programs, such as Medicare and Social Security, which I believe are bigger and worse than Medicaid.  Under the Madisonian interpretation, Medicare and Social Security could also not be enacted at the federal level.  They would have to occur at the state level, but competitive federalism – without any Supreme Court intervention – would significantly constrain them.  If any state sought to redistribute from the young to the old the way that Medicare or Social Security does, people would leave that state in droves.  Thus, the most problematic features of Medicare and Social Security could not occur if they were required to exist at the state level.

The Madisonian interpretation of the spending power thus would address not only Michael’s problem with grants to the states, but also much exclusively federal spending. Somehow, though, Michael misses this opportunity.  While he justifies his position in the book as saying that federal spending can sometimes produce net benefits, in the real world the costs are enormous and greatly outweigh the benefits.  The only reason that I can figure for why Michael rejects the Madisonian interpretation – and here I am only half kidding – is that he is a neo-Hamiltonian and can’t bear to reject Hamilton’s reading.

Despite this one criticism, let me conclude by repeating my strong praise for Michael’s book.  It is essential reading for anyone who views the Constitution as a means of promoting the liberty and wealth of the nation.

Reader Discussion

Law & Liberty welcomes civil and lively discussion of its articles. Abusive comments will not be tolerated. We reserve the right to delete comments - or ban users - without notification or explanation.

on June 10, 2012 at 06:52:51 am

I would add, let's cut all taxes to zero percent, then we would have equal tax rates for all. Then we could shut down all governments, and let the natural order prevail. Isn't this Freedom?

If the Hamiltonian view is for Congress to be able to spend money on anything, then what's the problem? Let them spend away.

If the Madisonian view is to follow the Constitution - strictly - then you folks should be for Madison.

Jefferson wanted a small Federal government. Hamilton did not.

read full comment
Image of Eric Hodgdon
Eric Hodgdon
on June 10, 2012 at 15:25:05 pm

Serious cuts, or cuts of a rational nature regarding our Federal-National government will start with Defence. Hold Defence to the same as NASA's. Or if there are too many frightened Americans, then keep the underwater arm of the Navy only. The sub fleets are more than adequate for all viable necessities current to tasks required. Ground based forces are not required. Only National Guard units are required, because we are at peace with all other nations. Air Force, same. Cut out 95% - they are not required. Besides, aviation fuel is needed for those who will use it for creating profit - not for wasting it fools errands.

Enough said, write to your Congress-persons, and lets get back to the reality of our founding - Small decentralized government.

read full comment
Image of Eric Hodgdon
Eric Hodgdon
on June 12, 2012 at 10:31:41 am

You know, it is sad that in all the discussions about spending for the - general - welfare, no one seems to care to note that the formats referred to are actually spending for the benefits of particular classes of persons.

Medicare for those of a certain age group (and economic classification)

Medicaid for those of a certain economic classification

Social Security for those who "survive" beyond a certain age and who have had certain classes of incomes derived from "work."

Education may come close, but at the time of expenditure, is directed to a limited set of classes.

A highway or bridge for all to use, something where one can apply the concept of universal benefit may be "general," the major fiscally destructive programs are not.

read full comment
Image of Richard Schweitzer
Richard Schweitzer

Law & Liberty welcomes civil and lively discussion of its articles. Abusive comments will not be tolerated. We reserve the right to delete comments - or ban users - without notification or explanation.