Reconciling Lopez with New Deal

• Rehnquist establishes “substantial effects” test, yet approvingly cites Wickard, which gave Congress unlimited power.

• SC was reluctant to undo New Deal powers that Congress had, because they feared consequences thereof.

• Reasonable distinction between New Deal and Lopez

• New Deal – Depression was national problem that states could not handle on their own.

• Guns – states can handle handguns in schools.

• Civil Rights – Congress did not trust states to solve problems.

• Lessig – before there were reasons for formalistic distinctions in early cases, but now there is movement toward legal realism.

Current status of commerce clause

• Even after Lopez, Congressional power is broad.

• Perez v. U.S. (1971). SC upheld federal statute outlawing intrastate extortion credit transactions.

• Lopez cites Perez as example where intrastate commerce substantially affected interstate commerce.

Does Lopez provide workable rule of law?

• Steven Calabresi

• We did not need “grand and unified theory of commerce power” in order to decide this case. Lopez was not remotely a close case.

• We will worry about close cases when they come up and when new body of CC case law has been assembled.

• Lawrence Lessig

• There is no good way in principle to sustain lines that SC drew, most especially line between commercial and non-commercial activity.

• As line is drawn in SC opinion, examples of what Congress cannot reach (family law, school curricula) are all areas of local concern.

• However, under National League of Cities v. Usery (SC sought to protect from federal regulation, on federalism grounds, state government actions that involved matters that were traditionally local concern) lower courts fell into confusion attempting to define boundaries of protected category  case was overruled by Garcia.

• Thus, tools provided by Lopez will surely fail, even though aim of protecting federalism is worthy.

Spending power United States V. Butler - Beyond enumerated powers

• Roberts 1936. Background: Prior to 1937, it was not clear whether Congress could spend for whatever purpose it wished (so long as the “general welfare” was being served), or whether Congress could only spend in order to carry out one of the other enumerated powers listed in Article I, §8. But Butler Court held that no such limitation exists – the spending (and taxing) powers are themselves enumerated powers, so Congress may spend (or tax) to achieve the general welfare, even though no other enumerated power is being furthered.

• Facts. This case involved the validity of the Agricultural Adjustment Act of 1933, a New Deal measure which sought to raise farm prices by cutting back agricultural production. The scheme was to be carried out by authorizing the Secretary of Agriculture to contract with farmers to reduce their acreage under cultivation in return for benefit payments; the payments were in turn to be made from a fund generated by the imposition of a “processing tax” on the processing of the commodity.

• Holding. SCt invalidated AAA because (1) it pursued an unconstitutional end, namely federal regulation of agriculture; and (2) it sought to purchase a “compliance which Congress was powerless to command.”

• Separate spending power. SCt first concluded that the power to “tax and spend for the general welfare” existed as a power separate and distinct from the other powers enumerated in Article I, §8. Thus the taxing-and-spending power stood on equal footing with, say, the power to regulate interstate commerce. By this standard, there was no difficulty with the Agricultural Adjustment Act.

• Not usable for regulation. But SCt rejected the contention that Congress had an independent power to “provide for the general welfare” apart from the power to tax and spend. Thus Congress may not regulate in a particular area merely on the ground that it is thereby providing for the general welfare; it is only taxing and spending which may be done “for the general welfare.” Otherwise, SCt noted, the federal government would be one of “general and unlimited powers,” rather than enumerated and limited ones.

1. States’ rights infringed. Therefore, SCt concluded, Congress had no right to regulate areas of essentially local control, including agriculture. Because Congress could not directly regulate agricultural production, it also could not coercively purchase compliance with a regulatory scheme.

1. Conditional appropriation distinguished. SCt distinguished this Act from a conditional appropriation of money (which would be valid, even under SCt’s view). What was impermissible in the Act was the fact that the farmer contractually binds himself to obey the regulations (which regulations he could not be directly commanded to obey). The use of contracts in this way, SCt argued, “would tend to nullify all constitutional limitations upon legislative power.”

• Dissent - Stone. Stone contended that majority’s second argument is dead weight because all acts of spending are such. Rejected majority’s distinction between conditional appropriations and spending premised upon contracts. He pointed out that if Congress could constitutionally make payment to farmers on condition that they reduce their crop acreage, it was absurd to hold that the measure becomes unconstitutional merely because the farmer is required to promise to reduce the acreage.