Steve Simpson

The astonishing size and scope of our federal government is no longer news to anyone who has been paying attention to the ongoing budget battles in Washington, D.C. But what may be surprising is that not all of the blame for our bloated, controlling federal government lies with Congress. The U.S. Supreme Court shoulders much of the blame as well.

Take, for example, federal entitlement programs like Social Security, Medicare and Medicaid. Nowhere does the Constitution authorize Congress to tax some citizens to pay for the savings or health care of others. As James Madison said in 1794, the Constitution does not “grant a right to Congress of expending, on objects of benevolence, the money of their constituents.”

Nonetheless, in 1937, in a case called Helvering v. Davis, the Supreme Court concluded that the constitution allowed Congress to do just that. George Davis, the plaintiff, was a shareholder of Edison Electric Corporation. He wanted to stop the company from making the payments and payroll deductions that the Social Security Act required, so he sued. Echoing Madison’s point, he argued that the Constitution does not allow Congress to transfer wealth from one citizen to another and the Tenth Amendment—which says that the powers not delegated to Congress remain with the people and the states—prevents it.

The Supreme Court disagreed. It found the power to require citizens to fund Social Security in the so-called “general welfare” clause of Article I, section 8. That section gives Congress the power to collect taxes and other forms of revenue “to pay the Debts and provide for the common Defence and general Welfare of the United States.” Until the 1930s, this clause was widely viewed as a limitation on Congress’s power to tax and spend. That is, by limiting spending to the common defense and general welfare, the Framers were making clear that Congress could raise and spend money only to discharge its other enumerated powers.

Those powers include raising and supporting the armed forces, establishing the Post Office, passing immigration and bankruptcy laws, and regulating interstate and foreign commerce. They don’t extend to just anything Congress thinks is worthy of federal largesse. As James Madison argued, interpreting the general welfare clause as an independent power to tax and spend would turn the Constitution’s doctrine of enumerated powers on its head.


Steve Simpson

Steve Simpson is a senior attorney at the Institute for Justice. He litigates primarily free speech cases in the state and federal courts across the country.