The Constitution Provides Answers to Our Federal Debt Problem

The national debt, currently at $36.3 trillion and growing, is a boulder weighing on economic prosperity. The money lent to the government with every purchase of a note, bill, or bond, as investors collect their guaranteed interest payments, could otherwise fund private, innovative activities that would raise living standards nationwide.

This week, Donald Trump re-entered the Oval Office armed with his team of small-government warriors in the self-styled Department of Government Efficiency, seeking to reduce the untenable size of the federal government through executive action. However, Elon Musk, who will help lead DOGE, just walked back the commission’s goal of finding $2 trillion in spending cuts.

The reality, which Musk seems now to be grasping, is that the executive branch cannot tame the national debt on its own. President Trump and his team need Congress, too, and the federal judiciary. To rein in the national debt, Congress and the judiciary must recommit themselves to the text of our founding document, and particularly to the original meaning of Article I, Section 8, Clause 1 of the U.S. Constitution. 

For ninety years, Congress and the Supreme Court have treated Congress’ first enumerated power as one of both taxing and spending. The clause reads, “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States …” The clause has been read to grant Congress an independent power to spend for the “general welfare” of the United States beyond the power Congress already has from the Necessary and Proper Clause to spend in pursuit of its other enumerated powers. 

It is this reading that sustains the legality of many entitlement programs, such as Social Security and Medicaid, that otherwise would be difficult to uphold under Congress’ regulatory powers.  

The historical evidence, however, overwhelmingly supports the proposition that this clause was intended only as a grant of the single power to tax for the national purposes specified in the grant, namely, “to pay the Debts and provide for the common Defence and general Welfare.” The entire clause was a replacement for the eighth article of the Articles of Confederation, which provided that requests for contributions shall be made to the states to cover “expenses that shall be incurred for the common defense or general welfare.” The Constitution empowered Congress to raise taxes directly on the American people for this purpose rather than rely on the rather unreliable state governments. Edmund Randolph and John Rutledge’s initial draft of the clause supports this interpretation; it provided that Congress shall have power to “raise money by taxation, unlimited as to sum, for the past & future debts and necessities of the union.”  

Gouverneur Morris, the head of the committee that drafted the Constitution’s actual language, also understood that the final language conferred merely a power to tax. According to Albert Gallatin, speaking some years later, Morris had attempted to alter to a semicolon the comma that separated the grant of taxing power from the list of national purposes for which taxes may be laid. He did so seeking to create an independent power “to provide for the common defense and general welfare.” The ever-watchful Roger Sherman caught him in the act and had the comma restored. 

To be sure, adhering to the best original meaning of the text would call into question large swaths of federal spending, including entitlements. This would be the most effective way to rein in the national debt. There may be little appetite, however, to challenge the constitutionality of entitlement programs. And though many at the Founding disagreed with him, no less a figure than Alexander Hamilton argued there was an independent power to spend for the general welfare. Such a spending power might therefore be within the range of plausible originalist meanings. 

Even if there is no appetite to undo modern entitlement programs, and even if the two-powers reading of the clause is within the range of originalist meanings, the modern doctrine still goes well beyond even the original Hamiltonian understanding of the clause. In particular, Congress today often uses its spending power not in pursuit of the general welfare, but rather as a means of purchasing regulatory compliance from the states with promises of spending. The Supreme Court upheld such tactics in 1987 when it approved Congress’ threat to withhold highway funds from South Dakota if the state did not raise its drinking age to conform with the rest of the nation. 

Congress and the executive branch routinely deploy such bribery, as when the Obama administration promised states the possibility of funding if they adopted the administration’s preferred national educational curriculum in its so-called “Race to the Top” initiative. Another example includes the various “incentive payments” that HUD doles out to organizations that adopt the disastrous “housing first” approach to homelessness. 

Such efforts are not spending for the general welfare but are rather regulations beyond the enumerated powers under the guise of the spending power. In all of the above examples, Congress could direct the desired outcome through regulatory legislation if only it had the constitutional authority to do so. If Congress could accomplish the objective without spending a single dollar – in sharp contrast to most entitlement programs and disaster relief – it is difficult to see how Congress is exercising its power to spend for the general welfare. The spending is merely incidental to the real objective, which is regulatory. 

Even today the Supreme Court differentiates between a tax with incidental regulatory impacts and a penalty whose purpose is regulatory. The court should make the same distinction in the context of Congress’ spending power. “There is an obvious difference between a statute stating the conditions upon which moneys shall be expended,” the court once held, “and spending to purchase compliance.” The court was right then, and the modern Supreme Court should recover this sensible distinction. 

If conservatives have no appetite to rein in entitlement spending, they should at least root out the unconstitutional but now ubiquitous practice of bribing states with promises of spending. Without the power to bribe the states, Congress might also find its power of the purse a lot less attractive. 

No matter which originalist interpretation conservatives elect to adopt, the text of the Constitution is where the real savings can be found. 

This article was originally published by RealClearPolitics and made available via RealClearWire.