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United States
Main article: Taxing and Spending Clause
The United States Constitution contains two references to "the General Welfare", one occurring in the Preamble and the other in the Taxing and Spending Clause. It is only the latter that is referred to as the "General Welfare Clause" of this document. These clauses in the U.S. Constitution are exceptions to the typical use of a general welfare clause, and are not considered grants of a general legislative power to the federal government as the U.S. Supreme Court has held:
Thomas Jefferson explained the latter general welfare clause for the United States: “[T]he laying of taxes is the power, and the general welfare the purpose for which the power is to be exercised. They [Congress] are not to lay taxes ad libitum for any purpose they please; but only to pay the debts or provide for the welfare of the Union. In like manner, they are not to do anything they please to provide for the general welfare, but only to lay taxes for that purpose.”[6]
- the Preamble to the U.S. Constitution "has never been regarded as the source of any substantive power conferred on the Government of the United States or on any of its Departments";[2][3] and,
- that Associate Justice Joseph Story's construction of the Article I, Section 8 General Welfare Clause—as elaborated in Story's 1833 Commentaries on the Constitution of the United States—is the correct interpretation.[4][5] Justice Story concluded that the General Welfare Clause is not an independent grant of power, but a qualification on the taxing power which included within it a power to spend tax revenues on matters of general interest to the federal government.
In 1824 Chief Justice John Marshall described in obiter dictum a further limit on the General Welfare Clause in Gibbons v. Ogden: "Congress is authorized to lay and collect taxes, &c. to pay the debts and provide for the common defence and general welfare of the United States. ... Congress is not empowered to tax for those purposes which are within the exclusive province of the States."[7]
The historical controversy over the U.S. General Welfare Clause arises from two distinct disagreements. The first concerns whether the General Welfare Clause grants an independent spending power or is a restriction upon the taxing power. The second disagreement pertains to what exactly is meant by the phrase "general welfare."
The two primary authors of the The Federalist essays set forth two separate, conflicting interpretations:
While Hamilton's view prevailed during the administrations of Presidents Washington and Adams, historians argue that his view of the General Welfare Clause was repudiated in the election of 1800, and helped establish the primacy of the Democratic-Republican Party for the subsequent 24 years.[11]
- James Madison advocated for the ratification of the Constitution in The Federalist and at the Virginia ratifying convention upon a narrow construction of the clause, asserting that spending must be at least tangentially tied to one of the other specifically enumerated powers, such as regulating interstate or foreign commerce, or providing for the military, as the General Welfare Clause is not a specific grant of power, but a statement of purpose qualifying the power to tax.[8][9]
- Alexander Hamilton, only after the Constitution had been ratified, argued for a broad interpretation which viewed spending as an enumerated power Congress could exercise independently to benefit the general welfare, such as to assist national needs in agriculture or education, provided that the spending is general in nature and does not favor any specific section of the country over any other.[10]
Prior to 1936, the United States Supreme Court had imposed a narrow interpretation on the Clause, as demonstrated by the holding in Bailey v. Drexel Furniture Co.,[12] in which a tax on child labor was an impermissible attempt to regulate commerce beyond that Court's equally narrow interpretation of the Commerce Clause. This narrow view was later overturned in United States v. Butler. There, the Court agreed with Associate Justice Joseph Story's construction in Story's 1833 Commentaries on the Constitution of the United States. Story had concluded that the General Welfare Clause was not a general grant of legislative power, but also dismissed Madison's narrow construction requiring its use be dependent upon the other enumerated powers. Consequently, the Supreme Court held the power to tax and spend is an independent power and that the General Welfare Clause gives Congress power it might not derive anywhere else. However, the Court did limit the power to spending for matters affecting only the national welfare.
Shortly after Butler, in Helvering v. Davis,[13] the Supreme Court interpreted the clause even more expansively, conferring upon Congress a plenary power to impose taxes and to spend money for the general welfare subject almost entirely to its own discretion. Even more recently, the Court has included the power to indirectly coerce the states into adopting national standards by threatening to withhold federal funds in South Dakota v. Dole.[14] To date, the Hamiltonian view of the General Welfare Clause predominates in case law.