The government of the United States is in the midst of debating major new undertakings, ranging from health care to climate change to energy development to tax reform.  Yet far more fundamental is a basic but stealth shift in national priorities—in the form of a rapid and pervasive expansion of government power over the private sector of the economy.

Although no serious discussion is occurring in the nation about the desirability of shifting economic power from individual decision-makers to the national government, that shift is a basic characteristic of virtually every policy proposal being debated in the Congress.

Take tax policy.  A 131-page document (pdf) issued by the Treasury goes way beyond recommending the extension of some of the expiring Bush administration tax cuts.  For example, the fine print contains over a dozen ways of discouraging American firms from doing business and investing overseas.  Supposedly minor technical changes also would have a severe impact.

For example, eliminating LIFO (last in-first out) inventory accounting will raise business taxes over $60 billion in one decade.  The Treasury also wants to revive four corporate environmental taxes that were eliminated in 1969.  These four arbitrary taxes have no relation between the tax burden imposed on a company and the pollution that it generates.  This bears an uneasy resemblance to Willie Sutton, who robbed banks because that was where the money was. Inevitably a variety of technical tax provisions will increase the paperwork burden on business.  The penalties for failing to file information returns (such as Form 1099) promptly and accurately are raised in a very complicated fashion involving three tiers of penalties.

On the expenditure side, the typical stimulus project increases the power of government in private business decision-making.  The bailout of the automobile industry is really an inefficient method of financing union pension and health plans.  The stockholders are zapped and the bondholders poorly treated.  The taxpayers are left holding the bag, especially considering the restrictions on General Motors importing the really fuel-efficient cars they produce overseas.  Apparently, the new General Motors factory for building compact cars was chosen on the basis of “carbon footprint” and “community impact.”

It is hard to keep a straight face when analyzing the new “cash for clunkers” program.  For example, owners of the biggest old clunkers get a $3,500 credit for trading in the old vehicles for a new one with an improvement of just one mile per gallon.  Surely, it would save energy if the Treasury just mailed the $3,500 checks directly to Detroit!

Of course, the Obama administration is making some reductions in federal spending.  It is reportedly imposing a 9 percent reduction in the budget for the division in the Labor Department that polices fraud and other illegalities on the part of labor unions.  As noted below, a simultaneous expansion of business-oriented antitrust enforcement is taking place.

Turning to regulation, one of Ralph Nader’s biggest disappointments during his heyday as a consumer advocate was the failure of his proposal for a new Consumer Protection Agency.  However, the administration’s financial regulatory plan creates a powerful new Consumer Financial Protection Agency (CFPA).

This new free-wheeling agency takes authority now divided between the Securities and Exchange Commission (SEC) and the Federal Reserve System.  In a change guaranteed to cause confusion, the CFPA will share authority with the Federal Trade Commission.  The new regulatory agency will also have a mandate to give consumers more economic education.  Educators find that especially scary.

Moreover, the agency will have its own money pot, independent of the normal congressional appropriations process.  It will be financed directly by fees assessed on “entities and transactions” across the financial sector.

The Treasury’s financial plan contains many other expansions of government power over business.  The Federal Reserve System is given new authority to oversee any large financial entity whose failure the Fed thinks could generate “systemic risk.”  The Treasury heads a new Financial Services Oversight Council to “resolve” the inevitable jurisdictional disputes among federal agencies.  A new Office of National Insurance is to be established in the Treasury to monitor “all aspects of the insurance industry,” a sector of the economy traditionally under the province of state governments.

The SEC will require the registration of all advisers to hedge funds and other private pools of capital with assets over a given threshold.  It also will have the power to inspect the books of the advisers and to ensure compliance by their clients.  In addition, the power of the SEC will be expanded by legislative proposals to give it a more active role in guiding the compensation committees of all public companies.

The Federal Deposit Insurance Corporation will have new authority to take over and shut down financial institutions (not just banks) whose failure is deemed to pose “systemic risk.”

Viewed in their totality, these technical financial changes would represent a historic expansion of government.  Sadly, there is little comfort in the Treasury’s warning in its 88 pages of detailed proposals:  “More can and should be done in the future.”  Comparisons with the New Deal of the 1930s are too timid.  Shades of Alexander Hamilton!

The complicated climate change bill that recently passed the House of Representatives is a dramatic example of expanding government power over the economy.  Again, the fine print deserves far more attention than it has received.  For example, buried in the 1,201 pages of detail is a provision authorizing the Department of Transportation to require automotive manufacturers to produce vehicles that can run on methanol (wood alcohol), a fuel not widely available.

Other provisions, as expected, have little to do with the subject of global warming.  For example, contractors on some energy projects must pay employees at least the locally “prevailing wage.”  It is well known that, in practice, that means paying higher union wage scales.

Many federal departments are trying to climb aboard the economic stimulus bandwagon.  The Department of Justice wants to help out by showing that antitrust should be a “frontline issue” in the response to the problems facing the economy.  Apparently, business is not getting sued often enough.  Incredibly, one new assistant attorney general views antitrust enforcers as “key members of the government’s economic recovery team.”

When we step back and try to add up all the tax, spending, and regulatory actions and proposals of the new Obama administration, the result is clear: a cumulative squeeze on private decision-making and a more slowly growing economy in the years ahead.

In the process, private businesses will be discouraged by a host of government policies from making major new investments, especially those of a long-term nature with payoffs far in the future.  Key negative factors are the likelihood of higher taxes and greater inflation resulting from the huge budget deficits that are likely to arise in the next several decades, abetted by lax monetary policies.

The American public is likely to have a long wait until the national unemployment rate gets back down to the 7.6 percent that was reported when President Obama took office in January 2009.

One fundamental point deserves to be stressed.  In the inevitable tension in public policymaking between economic prosperity and income redistribution, for the next several years the American people can expect that income equalization will get the government’s priority over improvements in people’s living standards.  The average American, at best, will receive a more equal slice of an income pie that will be far smaller than the public expects.

Murray Weidenbaum holds the Mallinckrodt Distinguished University Professorship at Washington University in St. Louis, where he also serves as honorary chairman of the Weidenbaum Center on the Economy, Government, and Public Policy.

With the nation in the midst of an economic crisis, many groups and individuals are questioning the massive spending and so-called economic stimulus bills recently passed by Congress. This includes bailouts and appropriations known as earmarks and pork-barrel spending. Since the constitutionality of federal spending is never part of the debate, we need to re-visit Congress’ power to tax and spend.

The Taxing and Spending Clause

Congress’ power to tax and spend is found in Article I, Section 8, Clause 1 of the Constitution for the United States of America. This Clause grants Congress the power:

“To lay and collect Taxes, Duties, Imposts and Excises, to pay the debts and provide for the common Defense and general Welfare of the United States.”

Constitutional Purposes of Taxation

Pursuant to this Clause, Congress can only impose taxes for three purposes. First, to “pay the debts…of the United States.” This provision was inserted, primarily, to give the federal government the ability to extinguish the existing debts of the United States and was not intended to grant Congress the discretionary power to dream-up ways to incur new debts. Second, to “provide for the common Defense…of the United States.” This provision enumerates the primary purpose of the federal government and grants Congress the power to raise the needed revenue. Third, to “provide…for the general Welfare of the United States.” Since most federal spending falls under the third clause, which is commonly known as the General Welfare Clause, it will be the focus of this article.

Definitions of “General” and “Welfare”

In order to accurately examine the general welfare provision, it is necessary to establish the meaning of the words general and welfare.

“General. 1: involving or applicable to the whole. 2: involving, relating to, or applicable to every member of a class, kind or group.”

“Welfare. 1: the state of doing well, esp. in respect to good fortune, happiness, well-being or prosperity.”

The word welfare is derived from the words “well” and “fare” and means a “state of faring well” or “well being.” When the Framers used the word welfare in the Constitution they were using it in this context. They were not referring to government give-a-way programs for the poor, disabled, disadvantaged, etc. These programs were virtually unknown to the Framers and would have been classified, in the language of the day, as a form of poor relief.

From the above, the common definition of the general welfare phrase, as used by the Framers in the taxing clause is: “the whole group’s well being.”

Since the general welfare phrase is annexed to the words “United States,” the whole group being referenced is a group of States called the “United States of America.” Thus, this Clause grants Congress the power: “[t]o lay and collect taxes to provide for the well being of the States in their united or collectively capacity.”

Alexander Hamilton confirmed this in Federalist Essay No. 83:

“The United States, in their united or collective capacity, are the OBJECT to which all general provisions in the Constitution must necessarily be construed to refer.” [Emphasis not added]

The Original Controversy

Following the close of the Federal (Constitutional) Convention of 1787, a controversy arose over the meaning and scope of the general welfare phrase. The Anti-Federalists, who opposed ratification of the proposed constitution, were vehemently opposed to this provision because they believed it was an abstract term and Congress alone would determine its scope and meaning. They also asserted this provision amounted to an unlimited grant of legislative power.

The Federalists asserted that the Anti-Federalists had misconstrued the construction of this provision. James Madison, who is recognized by some as the father of the Constitution, argued that the general welfare phrase was a qualifying term, not an independent grant of power. He claimed the general welfare provision could not be construed as an unlimited grant of legislative power because it was followed by an enumeration of particular powers. Since the federal government was a government of limited powers, Madison asserted the power to tax and spend was confined to the enumerated legislative fields committed to Congress by the Constitution.

The United States Supreme Court

Following his election in 1932 and the implementation of his so-called New Deal policies, much of President Franklin Roosevelt’s legislation was challenged as unconstitutional. A majority on the Court, who had been appointed by Republicans, began declaring cornerstones of the New Deal unconstitutional in 5-4 decisions. This infuriated Roosevelt and he threaten to pack the Court with justices who would be more sympathetic to his New Deal legislation.

In 1936, in the case of U.S. v. Butler, the scope of the General Welfare Clause indirectly reached the United States Supreme Court in a challenge to the Agricultural Adjustment Act of 1933. Even though the Court again ruled against the New Deal in a 5-4 decision, it laid the foundation for Congress to exercise additional taxing and spending power through the General Welfare Clause.

A little over a year after the Butler decision, the Supreme Court decided a case that dealt specifically with the General Welfare Clause. This case involved a challenge to various provisions of the Social Security Act of 1935. Since there was no constitutional authority for this type of scheme, the federal government had to find a way to bring it under the umbrella of a clause in the Constitution. That provision was the General Welfare Clause. Citing the Butler case as precedent, the Court, in Helvering v. Davis, sustained the constitutionality of the Social Security Act in a questionable 5-4 decision:

“Congress may spend money to aid in the ‘general welfare.’ There have been great statesmen in our history who have stood for other views. We will not resurrect the contest. It is now settled by decision… The conception of the spending power advocated by (Alexander) Hamilton and strongly reinforced by (Supreme Court Justice Joseph) Story, has prevailed over that of Madison, which has not been lacking in adherents (supporters).” [Bracketed words added for clarification]

Even though the Court’s ruling, in the author’s opinion, was erroneous and can be refuted in whole or in part, this analysis will focus on the views expressed by Hamilton and Story because their interpretations, if they were being followed, would render the majority of all federal spending programs, including earmarks and pork-barrel spending, unconstitutional.

NOTE: The opening clause of the Social Security Act states it is: “An Act to provide for the General Welfare.”

Hamilton’s Broad Interpretation

In his 1791 “Report on Manufactures,” Alexander Hamilton asserted the general welfare provision conferred a power separate and distinct from the specific grants of legislative power contained in the Constitution. He also claimed the specific grants of legislative power did not qualify or limit the meaning of the general welfare phrase. Therefore, Congress, according to Hamilton, had an independent and unspecified power to tax and appropriate money for the general welfare.

Even though Hamilton asserted the appropriation of money for the general welfare is totally within the discretion of Congress, he cautioned there are several limitations on their power.

First, Congress cannot use this provision as a pretext to legislate for the general welfare generally. It can only tax and spend for the general welfare of the United States.

Second, the appropriation must be applied to the whole (general) and cannot be local or particular.

“That the object to which an appropriation of money is to be made be General and not local; its operation extending in fact, or by possibility, throughout the Union, and not being confined to a particular spot.”

Third, Congress cannot use the power of appropriation to do things “not authorized in the Constitution.”

“No objection ought to arise to this construction from a supposition that it would imply a power to do whatever else should appear to Congress conducive to the General Welfare. A power to appropriate money with this latitude which is granted too in express terms would not carry a power to do any other thing, not authorised in the constitution, either expressly or by fair implication.”

When the States adopted the Constitution they agreed to unite specially – not generally. As stated by Alexander Hamilton in Federalist Essay No. 32, the Constitution would only establish a “partial union” between the States. A limited union equals limited powers. In other words, the States are only united within the scope of the limited powers delegated to the federal government. Thus, this provision cannot be construed to grant Congress the power to tax and spend to do things “not authorized in the Constitution” because the States are not united outside of the delegated powers and the general welfare provision is restricted to the States in their united capacity.

Story’s Commentaries on the Constitution

Joseph Story was a Justice on the United States Supreme Court from 1811-1845. In his 1833 commentaries on the Constitution, which the Court adopted in 1937, Story supported Hamilton’s assertions concerning the general welfare provision.

Story agreed with Hamilton that the general welfare provision was a component of the taxing power and not a grant of legislative power:

“The power to lay taxes is a power exclusively given to raise revenue, and it can constitutionally be applied to no other purposes. The application for other purposes is an abuse of the power; and, in fact, however it may be in form disguised, it is a premeditated usurpation of authority.”

He also supported Hamilton’s assertion that appropriations must be general:

“A power to lay taxes for any purposes whatsoever is a general power; a power to lay taxes for certain specified purposes is a limited power. A power to lay taxes for the common defence and general welfare of the United States is not in common sense a general power. It is limited to those objects. It cannot constitutionally transcend them. If the defence proposed by a tax be not the common defence of the United States, if the welfare be not general, but special, or local, as contradistinguished from national, it is not within the scope of the constitution.”

Things not Authorized in the Constitution

If Congress cannot use the power of appropriation to do things “not authorised in the Constitution, either expressly or by fair implication,” then where would one look to find a basic blueprint so this rule can be followed?

Ironically, that would be a Federalist Essay written by James Madison. In Essay No. 45, he distinguished the external powers granted to the federal government from the domestic powers reserved to the States:

“The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part; be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people; and the internal order, improvement, and prosperity of the State.

The operations of the federal government will be most extensive and important in times of war and danger, those of the State governments in times of peace and security.”

As stated by Madison, the powers of the federal government pertain, for the most part, to external or foreign affairs and do not extend to the life, liberty or property of the people of the several States. This constitutional principle, standing alone, disproves any assertion that Congress was granted broad authority under the General Welfare Clause. It also negates any claim that Congress was granted the authority to establish and fund domestic social programs under the guise of the general welfare. Thus, any appropriation to fund these programs is unconstitutional irrespective of whether it meets the general (apply to the whole) test.

In his analysis, Justice Story stated the federal government had not been granted the authority to meddle with the “systems of education, the poor laws, or the road laws, of the states.” Yet, Congress is using the general welfare provision to encroach in all of these areas despite the fact that it does not have the constitutional authority to do so under any provision of the Constitution.

Since the federal government was not granted any general authority over social or domestic issues within the several States, Congress is unconstitutionally taxing the American people “to do things not authorised in the constitution.”

Justice Story also addressed the appropriation of money for foreign purposes:

“If the tax be not proposed for the common defence, or general welfare, but for other objects, wholly extraneous, (as for instance, for propagating Mohammedanism among the Turks, or giving aids and subsidies to a foreign nation, to build palaces for its kings, or erect monuments to its heroes,) it would be wholly indefensible upon constitutional principles.”

Despite this limitation, Congress is using the general welfare provision as its constitutional authority for appropriating billions of dollars for foreign aid programs like those mentioned by Story. Congressional abuse has become so pervasive that Congress taxes the American people to build homes and fund birth control programs in foreign countries. As stated by Story, this type of spending is “wholly indefensible upon constitutional principles.”

NOTE: The Founders would have categorized Social Security as a form of poor relief. Thus, as stated by Story, the federal government never had the constitutional authority to tax and spend to establish this program in the first place. Yet, the Supreme Court adopted Story’s interpretation of the general welfare provision and then used it to declare the Social Security Act constitutional.

Earmarks and Pork-Barrel Spending Defined

After doing an online search to find some easy to understand definitions, I settled on the ones found on Wikipedia because they are accurate and touch on the constitutional rules placed on Congress’ power to tax and spend under the general welfare provision.

EARMARK: “a congressional provision that directs approved funds to be spent on specific projects…Typically, a legislator seeks to insert earmarks that direct a specified amount of money to a particular organization or project in his/her home state or district.”

PORK BARREL SPENDING: “government spending for localized projects secured solely or primarily to bring money to a representative’s district…benefits are concentrated in a particular area but whose costs are spread among all taxpayers.”

The reader will note the use of the words local and particular in defining the scope of these terms. Since congressional spending for the general welfare cannot be local or particular, these appropriations are, in the words of Justice Story, “not within the scope of the constitution.”

Here is an easy to understand example of how this type of spending works and why it is unconstitutional. At the present time, Congress imposes a general gasoline tax of 18.4 cents per gallon throughout the United States. When Congress writes a spending bill and a powerful member of Congress wants to buy some votes from the folks back home, he places an earmark in the legislation to have a 3 million dollar bicycle trail built in his home State or congressional district. The money for the project is appropriated from the general fund of the United States where the gasoline taxes were deposited with other taxes of a general nature. Thus, taxes from the general fund were used to finance a local or particular project within an individual State. This is unconstitutional. The project was not for the welfare of the States in their united capacity. This is unconstitutional. Since building bicycle trails in the States is “not authorised in the Constitution, either expressly or by fair implication,” the appropriation failed this test and is unconstitutional.

In other words, Congress cannot impose a general tax throughout the United States, put the money in the general fund of the United States, appropriate money from the general fund of the United States, and then spend the money for a local or particular project.

Summary of the Rules for Taxing and Spending

Every tax and appropriation that is not to pay the debts or provide for the common defense of the United States is constitutionally governed by the following rules.

1-The tax and appropriation must be for something authorized in the Constitution. If this rule is met, then the second rule comes into play.

2-The appropriation must be general, i.e., apply to the States in their united or collective capacity. Congress cannot tax and appropriate money for local or particular projects.

Every dollar contained in every spending bill passed by Congress for the “general Welfare of the United States” must meet both of these requirements to be constitutional. When these rules are applied, we find the majority of all federal taxes being imposed by Congress either fund programs and projects not authorized in the Constitution or are for local or particular projects. Thus, the majority of all federal spending, outside of the general operating expenses of the federal government, is unconstitutional because these two rules are either ignored or violated by Congress.

Conclusion

When federal taxation and spending is placed under a constitutional microscope for examination, we find the document has been infected by a wealth-eating virus called “members of Congress.” These individuals, who took an oath to support the Constitution prior to taking office, have disregarded the interpretations and limitations expressed above and unconstitutionally adopted a new interpretation of the general welfare provision. Their interpretation deletes words, disregards words, changes the meaning of the words “general” and “welfare,” and is absent of any of the limitations expressed by the Founders. In short, members of Congress claim they have the unlimited power to tax, spend, and legislate, as long as they cite the general welfare as the constitutional authority for the legislation.

And to add insult to injury, congressional appointees in the federal judiciary have constructed an obstacle course that makes it almost impossible for the American people to use the legal system to stop Congress from  taxing them to fund programs not authorized in the Constitution.

Now that we know the Congress of the United States has been violating the taxing and spending clause of the Constitution for decades and pushing the nation to the brink of economic ruin, the question is: what are we going to do about it? Our children and grand children are waiting for our decision.

Bob Greenslade [send him email] is a regular participant in Tenth Amendment Center comments and has been writing for  http://www.thepriceofliberty.org since 2003.

[Courts and Congress: America's Unwritten Constitution. By William J. Quirk. Transaction Publishers, 2008. Xviii + 312 pages.]

Courts and Congress defends a revolutionary thesis. If asked, who has the final say in our government on the meaning of the Constitution, most people would say, the Supreme Court. The Court itself agrees: in the famous Planned Parenthood v. Casey (1992) decision, it declared that it could not consider reversing Roe v. Wade (1973), because the American people had come to look to the Court as their guide.

William Quirk, one of the most original Constitutional theorists of our time, challenges this view. No, he does not challenge judicial review, the power of the Court to find laws unconstitutional: this he finds solidly based. He criticizes the Court for abuses of interpretation; but so long as the Court sticks to the language of the document, all is well.

So far, you may ask, what is original about that? Do not many other critics of the Court attack its at-times-bizarre interpretive methods? Quirk’s originality rests in his taking literally, and emphasizing, a part of the Constitution that most writers ignore. According to Article III, Section 2, the jurisdiction of the Supreme Court lies almost totally up to Congress. The Court has original jurisdiction only in cases involving disputes among the states and in cases where foreign diplomats are a party. Its appellate jurisdiction is subject to whatever “rules and exceptions” Congress chooses to make. So far as lower federal courts are concerned, they stand completely at the mercy of Congress. If it wished to do so, Congress could abolish the lower federal courts altogether.

Thus, if Congress does not like the decision of the Court in Roe v Wade and its successor cases, it can take away the right of the Court to hear any cases on appeal that involve abortion. True enough, that would still leave the decision on the books, and it would presumably be binding on other courts; but in practice, it might be difficult to sustain it. If a court decided to allow restrictions on Roe contrary to the mandate of the Supreme Court, this ruling could not then be appealed to that court for reversal. Congress might, by getting rid of the federal courts completely, leave abortion entirely in the hands of the state courts. In like fashion, of course, for other controversial areas. Quirk points out that until 1875, the lower federal courts did not have the right to hear appeals from state court decisions about federal law. By using its Article III powers, Congress could radically reshape constitutional law.

One might at first think that Quirk has made a mistake. Is he not blowing out of proportion a passage that really deals only with setting up rules of procedure for the federal courts? History buffs will be aware of the famous case of ex parte McCardle (1868), in which the Reconstruction Congress withdrew the right of the Court to hear a case, while that very case was pending before the Court; but is not this use of Article III an aberration? Surely, like the famous Tenure of Office Act, this was an example of how extreme that Congress was, rather than a guide to sound constitutional practice.

To those inclined to think so, the ruling of the Court in McCardle will come as a surprise. It fully recognized the right of Congress to withdraw its jurisdiction. The Court said,

We are not at liberty to inquire into the motives of the legislature. We can only examine its powers under the Constitution; and the power to make exceptions to the appellate jurisdiction of this court is given by express words… It is quite clear, therefore, that this court cannot proceed to pass judgment in this case, for it no longer has jurisdiction of the appeal; and the judicial duty is not less fully performed by declining ungranted jurisdiction than in exercising firmly that which the Constitution and the laws confer. (pp. 289–90)

It is Quirk’s great merit to show that Congress’s power to limit the federal courts is a recurring theme in American history. Quirk is a Jeffersonian; and he points out that Jefferson and his followers feared the potential for abuse in federal judicial power and acted to curb it. The Federalists had secured the appointment of a number of Federalist judges in the Judiciary Act of 1801.

The Republicans replied to the Judiciary Act of 1801 by repealing it in the Judiciary Act of 1802. The 1802 act repealed “federal question” jurisdiction. It stripped the new judges of their offices. (p. 178)

Congressional power under Article III is far from a theoretical question. Congress has in fact acted to limit the federal courts in several notable instances. By the early 1930s, a majority of Congress had come to think that the courts often acted in an improperly antilabor way by issuing injunctions that forbade unions to strike. Employers who claimed that unions were a threat to their property did not have to go through the long and involved process of a civil suit. Once an injunction against a union had been issued, the court could instead hold the union in contempt and inflict civil and criminal penalties. Accordingly, in the Norris-LaGuardia Act (continually misspelled in the book), Congress, exercising its Article III authority, took away the power of federal courts to issue injunctions in labor cases. An interesting question, not discussed in the book, is why Franklin Roosevelt did not resort to this tactic in his disputes with the Court.

Again, in the 1950s, there was a Congressional outcry against several Supreme Court decisions that were deemed unduly protective of the civil liberties of members of the Communist Party. Senator William Jenner introduced a bill to withdraw the appellate jurisdiction of the Court in such cases; and although the measure failed to pass, its constitutionality was not seriously challenged. Opponents, such as Senator Jacob Javits of New York, claimed rather that the bill was unwise. One eminent law professor, Arthur J. Freund, who opposed the Jenner Bill, responded in this way when asked whether it was constitutional to limit the Supreme Court’s jurisdiction: “You can’t challenge the constitutionality of a constitutional provision” (p. 234).

The famous Engel v. Vitale (1962) decision, which held recitation by a public school teacher of a prayer in class to be unconstitutional, and the failure of a proposed constitutional amendment to overturn it to gain sufficient votes, aroused Senator Jesse Helms in 1979 to propose a “stripper” bill, as this sort of legislation is called, but it also failed of passage. In a number of instances, though, Congress has in fact stripped the federal courts of jurisdiction, and several such laws remain on the books today.

In recent years, a number of scholars have maintained that the Article III power of Congress is limited and that it cannot, e.g., bring it about that a constitutionally protected right is withdrawn from judicial scrutiny. Supporters of this position can appeal to the weighty authority of Justice Story, who thought that Congress was required to extend the full “judicial power” mentioned in the Constitution to the federal courts. Quirk successfully shows, though, that there is an extremely strong case that Congress does have the power to strip the federal courts of jurisdiction.

If Congress has the power, should it use it? Would not doing so remove a necessary check on Congress? Quirk does not think so. In his view, again a Jeffersonian one, Congress is the dominant branch of the American government; unlike the courts, it is directly subject to the will of the people. If one objects that majority rule can deprive a minority of its rights, Quirk responds that rights are safer with the people than with unelected courts. Murray Rothbard, by the way, thought much the same, especially in his later years.

To the argument that stripper bills would introduce chaos into the judicial system, since without appeal to a highest court, there would be no guarantee of uniform rulings in different jurisdictions, Quirk again has an answer. Is not experimentation desirable? Why should we not have varying rules, suited to local conditions?

If Congress has such power over the Supreme Court, why is it reluctant to use it when the Court abuses the Constitution? Quirk locates the answer in what he terms The Happy Convention. The principal aim of most members of Congress is to secure reelection to office. In order to do this, Congress avoids controversial moral and cultural issues whenever possible. Far better to have the Supreme Court, an unelected body that voters cannot unseat, take the blame for unpopular decisions.

Similarly, the Constitution clearly gives Congress the sole power to declare war. But, wishing to avoid blame should a war go badly, Congress has abdicated its power to the president. It is better, Congress thinks, for him to take the blame for Vietnam or Iraq. By its own lights, the Congressional policy has been remarkably successful. Most incumbents are reelected. The cost, though, is a severe one. Our actual Constitution, one of congressional preeminence, has been replaced by the Happy Convention, in which the president and Supreme Court have supplanted Congress. No Jeffersonian can accept this.

David Gordon covers new books in economics, politics, philosophy, and law for The Mises Review, the quarterly review of literature in the social sciences, published since 1995 by the Mises Institute. He is author of The Essential Rothbard, available in the Mises Store.

This review originally appeared in The Mises Review, Fall 2008.

It has not been a good week for the Republic.  It took quite a bit of trampling of the Constitution, but the bailout bill passed, as I suspected it would.

The bailout failed the first time it was brought to the House.  Undaunted, the Senate pressed on by attaching the bailout as an amendment to another House passed bill that was pending in the Senate.  The new bailout version had new taxes, so according to the Constitution it should not have originated in the Senate.

The rallying cry heard all over the Hill the past two weeks was that Congress must act.  Our economy is facing a meltdown.  Would this bill fix it?  Nobody could really explain how it would.  In fact, few demonstrated any real understanding of credit markets, of derivatives, of credit default swaps or mortgage-backed securities.  If they did, they would have known better than to vote for this bill.

All they knew was that this administration was saying some frightening things, and asking for a lot of money.  And when has Congress ever been able to come up with a better solution to a problem than to throw more of your money at it?  So that is what Congress did, enacting a financial PATRIOT Act in the process.

In its embarrassment at being called a “Do-Nothing Congress” the 110th Congress took decisive action and did SOMETHING.  No matter that it was the wrong thing.  In fact, it wasn’t until the Senate had a chance to load it up with even MORE spending, when it was finally inflationary and horrible enough, at $850 billion instead of a mere $700 billion, that it passed – and with a comfortable margin, in spite of constituent calls still coming in overwhelmingly against it.  57 members switched their vote!

The market went down anyway.  Our nation is now just that much more in the hole.  You will pay your part of this mess through inflation, and very likely hyperinflation.

Sometimes doing nothing is much better than thrashing about aimlessly.  When one is caught in quicksand, for example, or when one doesn’t understand economics and finds oneself in the position Congress was in for the past two weeks, with decades of irresponsible monetary policy coming to a head.

Why should we trust the same people who said just a few months ago that the economy was perfectly sound?  The same people who just knew there were weapons of mass destruction?  The same people that crammed the PATRIOT Act down our throats?  Why not consult the people who had the foresight and understanding to see this coming?  They would have recommended such logical actions as repealing the Community Reinvestment Act, which forces banks to make bad loans, or allowing the market to set interest rates instead of the Federal Reserve system.

How about abolishing the Federal Reserve altogether?  There are many things that could have been done, but don’t expect Congress take a course of action that comes from a place of understanding and competence when they could just spend money.

This bailout will be the legacy of the 110th “Do-Something” Congress, along with record low approval ratings.  Here’s hoping the 111th Congress will be a “Do the Right Thing” Congress, and will focus on repealing and abolishing what is wrong with government instead of reinforcing it.

Ron Paul is a republican member of congress from Texas.

Recently Congress passed the American Housing Rescue and Foreclosure Prevention Act., also known as the Housing Bill.  Its passage was lauded by many who are legitimately concerned about foreclosures and the housing market in our country’s economy.  I was asked how I could vote against a bill to help American homeowners, but I found this bill to have more to do with helping big banks than helping average Americans.

The answer is that there is more to any bill than its name or the headlines surrounding it.  If one only paid attention to bill titles, one could happily vote for almost any bill put to a vote on the floor.  Titles do not tell the complete story of a bill’s provisions, and many titles are downright deceptive and come close to emotional blackmail of legislators.

But we cannot afford to be fooled by fancy titles. 

The housing bill could perhaps be more aptly named The Big Banking Bailout at Taxpayer Expense Act as large sections of it were written by big banking lobbyists according to Evans and Novak reporter Tim Carney’s Capitol Hill sources.  At least that title would be honest.

Also, many of these magnanimous sounding foreign aid bills and so-called human rights resolutions have counterproductive and hypocritical language tucked into the fine print. The recent bill on China was a good example.  This resolution calls on China to hold meetings with the Dalai Lama without preconditions, when that is something our own government will not do with Iran.

How our government has the authority to tell China what to do it beyond me, especially when we demand something so hypocritical.  On foreign aid bills and legislation that on the surface seems very charitable, upon closer examination we find strings attached and a lot of manipulation of the marketplace.  Many times, these bills purport to help the destitute, but actually help multinational corporations or prop up dictators that might otherwise be deposed by their people.

The other point to take into consideration on legislation and House resolutions is that intentions are not enough.  It is not enough to want to solve a problem with legislation, and name a bill to that effect.  The crafters of the legislation need to demonstrate a clear and honest understanding of the problem, in order to put forward a realistic strategy to solving it.

Too many times, I just don’t see that.  Instead I see more taxes, more restrictions, more violations of the Constitution, and more unintended consequences.

One shouldn’t judge legislation based on titles, good intentions, or what someone says the bill will do.  Imagine if all the legislation in the history of this country actually did what the title of the bills proclaimed they would do.

How very different this country would be!  There would be no poverty, no drugs, no crime.  In fact if it was that easy, Congress by now would have probably repealed the law of gravity, and supply and demand as well, and replaced them with unlimited wealth and given all Americans the power of flight.  What a fanciful world our legislators live in at times!

Though I am at times accused of being mean-spirited regarding the many bills I vote against, I don’t so much think of my vote as against the legislation, as much as FOR the Constitution, according to my duties as a Congressman.

Ron Paul is a republican member of Congress from Texas.