Power of the Purse

“The Big Spenders in Congress are at it again…. They’ve been inventing their miracle cures for which there are no known diseases.”

President Ronald Reagan, Remarks to Ohio Veterans’ Organization Columbus, October 4, 1982

“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.”

US Constitution, Article I, Section 9, Clause 7

This clause is known as the “Appropriations Clause”. The Appropriation Clause is essential to Congress’ “power of the purse” or the power to spend money.

Appropriation is defined as “an act of a legislature authorizing money to be paid from the treasury for a specific purpose”.

The authority for Congress to spend money comes from Article 1, Section 8, Clause 1. Please see “The Power of Congress to Tax”. https://barbbaran.wordpress.com/2013/04/12/power-of-congress-to-tax/

At the Constitutional Convention, the Appropriations Clause first appeared as a proposed division of authority between the House and Senate. The original proposal stated that all money bills had to originate in the House, and the senate could not amend or alter the bills. The final result of compromise was that the Senate could amend money bills and that the Legislative Branch appropriates all money by law. This process is explained in Article 1, Section 7, Clause 2. Please See “How Does a Bill Become a Law? https://barbbaran.wordpress.com/2013/04/06/how-does-a-bill-become-a-law/

The Appropriations Clause is also important in the separation of powers. It limits the Executive branch’s access to the treasury funds.

In Federalist 58, James Madison explains,

“The House of Representatives cannot only refuse, but they alone can propose the supplies requisite for the support of the government. They, in a word, hold the purse—that powerful instrument by which we behold, in the history of the British Constitution, an infant and humble representation of the people gradually enlarging the sphere of its activity and importance, and finally reducing, as far as it seems to have wished, all the overgrown prerogatives of the other branches of government. This power over the purse may, in fact, be regarded as the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure.”

Justice Joseph Story, in Commentaries on the Constitution of the United States, explains the separation of powers further, “to preserve in full vigor the constitutional barrier between each department…that each should possess equally…the means of self-protection.”

He further wrote:

“And the [legislature] has, and must have, a controlling influence over the executive power, since it holds at its own command all the resources by which a chief magistrate could make himself formidable. It possesses the power over the purse of the nation and the property of the people. It can grant or withhold supplies; it can levy or withdraw taxes; it can unnerve the power of the sword by striking down the arm that wields it.”

The second part of the clause states that an account of expenditures appropriated by Congress must be published periodically.

In Article 1, Section 9, Clause 7, we the people deny everyone in Government the right to spend money, which has not been authorized by law.

We the people receive assurance that our tax money is being spent for authorized purposes and an opportunity from time to time to see how our money is being spent.

References:

US Constitution

http://www.heritage.org/constitution/#!/articles/1/essays/67/appropriations-clause

Online Dictionary

Findlay, Bruce Allyn and Findlay, Esther Blair. Your Rugged Constitution. Stanford: Stanford University Press, 1950

Hannaford, Peter. The Quotable Ronald Reagan. Washington, DC: Regnery Press, 1998

Power of Congress to Tax

“ Government is the peoples’ business, and every man, woman, and child becomes a shareholder with the first penny of tax paid.”

Ronald Reagan, Address to the NYC Partnership Association, January 14, 1982

“*The Congress shall have 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;**but all Duties, Imposts and Excises shall be uniform throughout the United States.” Article 1, Section 8, Clause 1 US Constitution

The power of Congress to levy direct taxes is described in Article 1, Section 2, Clause 3. This is discussed in my post, “The Great Compromise” from February 27, 2013. The clause above generally deals with the process of indirect taxation.

* Spending Clause

This clause is labeled the “Spending Clause”. The taxing power of Congress represented in this clause is known as indirect tax. Duties are defined as a tax on goods imported into a country. Impost is to levy a tax as a charge or penalty. Excises are an internal tax levied on the manufacture, sale, or consumption of a commodity or any of various taxes on privileges often assessed in the form of a license or fee. The producers of goods and services will pass these charges to the consumer. This makes the tax indirect to the people.

According to this clause, the Congress may only levy these kinds of taxes to pay the debts and provide for the common defense and general welfare. The debts may be monies borrowed from other countries or other groups. Common defense would include the financial support of the military and groups such as National Guard. The Congress or the Courts have never strictly defined the general welfare.

Initially, the Congress and Executive branches were careful about spending money for the general welfare. They defined spending for the general welfare as something that would benefit all the States. An example might be that money would be allocated for building a lighthouse and maintaining a harbor where goods would be imported and exported to benefit all people in all states. Something that Congress might not fund would be building a recreation center in a local community. This action would not benefit all.

Over the years, this clause has come to mean whatever the Congress wants it to mean. Thus we have funding for some very unusual projects over the years. The spending is based on the will of the Congress. The will to spend (other people’s money) should be strongly influenced by the input from the constituents of each Congressional District and each State.

** Uniformity Clause

The Uniformity Clause directs that the indirect taxes imposed by Congress must be the same throughout the country. Example would be if there is a tax on vehicles, gasoline, tobacco, or cosmetics, it must be the same throughout the whole country.

An important example of paying taxes:

When they came to Capernaum, those who collected the two-drachma tax came to Peter and said, “Does your teacher not pay the two-drachma tax?”

He said, “Yes.” And when he came into the house, Jesus spoke to him first, saying, “What do you think, Simon? From whom do the kings of the earth collect customs or poll tax, from their sons or from strangers?”

When Peter said, “From strangers,” Jesus said to him, “Then the sons are exempt.”

“However, so that we do not offend them, go to the sea and throw in a hook, and take the first fish that comes up; and when you open its mouth, you will find a shekel. Take that and give it to them for you and Me.”

Matthew 17: 24-28

We the people give Congress the power to collect the money necessary to provide for defense if necessary and to take care of needs at home.

The benefit to we the people is that the federal government is strong enough to do and finance the things authorized by the Constitution.  The taxes levied by the Congress are fair in that the rate is the same across all the States.

References:

Bible, NASV

Findlay, Bruce Allyn and Findlay, Esther Blair. Your Rugged Constitution. Stanford: Stanford University Press, 1950

Hannaford, Peter. The Quotable Ronald Reagan. Washington, DC: Regnery Press, 1998

http://www.heritage.org

Webster’s Dictionary and Merriam Webster online