The Rehnquist Court (1986-1987). Seated, from left to right: Justices Thurgood Marshall and William J. Brennan, Chief Justice William H. Rehnquist, and Justices Byron R. White and Harry Blackmun. Standing, from left to right: Justices Sandra Day O'Connor, Lewis F. Powell, Jr., John Paul Stevens, and Antonin Scalia
Alexander Hamilton argued that Congress can spend money in a broad fashion in order to “provide for the common defense and general welfare of the United States.” In other words, he read the second part of the Taxation Clause as providing the purpose of federal spending.
James Madison, however, took a narrower view. He argued that the “common defense and general welfare” part of the Clause was a limitation, which required that taxes, duties, imposts and excises be used to benefit the whole country, rather than on behalf of some faction. Congress’s spending power stemmed from and was limited by the Necessary & Proper Clause which empowered Congress to spend money as necessary and proper to executing its other enumerated powers in Article I, Section 8, such as the power to establish courts or post offices. The Hamiltonian alternative, he thought, would undermine the enumerated powers scheme on which our federalism is based. In U.S. v. Butler (1936), the Supreme Court adopted Hamilton’s view that Congress had a very broad spending power. However, the Supreme Court has also acknowledged Madison’s federalism concerns. In particular, over the following decades, the Justices imposed certain limits on Congress’s power to attach “strings” to money given to the states.
The Supreme Court has held that Congress lacks the power to direct, or commandeer states to take certain actions. For example, Congress can’t force the South Dakota legislature to vote to raise its drinking age. That would be unconstitutional. But can Congress use its spending power to pay a state money to induce it to raise its drinking age? Or, more precisely, can Congress take federal money away from a state that refuses to raise its drinking age?
“The spending power is of course not unlimited, but is instead subject to [four] general restrictions.”
The first restriction is that “the exercise of spending must be in pursuit of “the general welfare.” The second restriction is that Congress must condition funds “unambiguously” so States know what they are getting into when they accept federal funds. In this case, the condition was clear and unambiguous. The third restriction is that the conditions must relate to “the federal interest” for which the spending program was established. Fourth, “Other constitutional provisions may provide an independent bar to conditional grant of federal funds.” The Court held that the Twenty-First Amendment, which allows states to regulate alcohol, was not such a bar.
“The means [Congress] chose to address this dangerous situation were reasonably calculated to advance the general welfare.”
“The condition imposed by Congress is directly related to one of the main purposes for which highway funds are expended -- safe interstate travel.”
A condition becomes unconstitutional when “the financial inducement offered by Congress might be so coercive as to pass the point at which ‘pressure turns into compulsion.’” However, 5% of “certain federal highway funds” was “relatively mild encouragement”
Justice O'Connor's dissent: “The establishment of a minimum drinking age of 21 is not sufficiently related to interstate highway construction to justify so conditioning funds appropriated for that purpose.” Congress cannot impose conditions “because of an attenuated or tangential relationship to highway use or safety”
“If the rule were otherwise, the Congress could effectively regulate almost any area of a State's social, political, or economic life on the theory that use of the interstate transportation system is somehow enhanced.”
“The difference turns on whether the requirement specifies in some way how the money should be spent, so that Congress' intent in making the grant will be effectuated.”
“Congress has no power under the Spending Clause to impose requirements on a grant that go beyond specifying how the money should be spent.”
In 1984, Congress enacted a law to encourage states to raise their drinking age. That statute allowed Elizabeth Dole, the Secretary of Transportation, to withhold a percentage of federal highway funds from states with a drinking age lower than twenty-one. South Dakota, which allowed nineteen-year-olds to purchase light beer, sued the Secretary. In Chapters 17 and 18 we will study New York v. United States (1992) and Printz v. United States (1997). These cases held that Congress lacks the power to direct, or commandeer, states to take certain actions. Because Congress could not force the state legislature to raise its drinking age, South Dakota argued that Congress could not accomplish that same objective by taking away federal funds.
The Supreme Court rejected this argument. Chief Justice Rehnquist wrote the majority opinion.