A Republic of Spending

Jonathan S. Gould* November, 2024

Large-scale spending measures make up many of Congress’s most important recent contributions to national policymaking. Congress has appropriated trillions of dollars to respond to emergencies, fight climate change, expand social safety net programs, spur technological innovation, and strengthen national infrastructure. While the contemporary Congress’s failure to enact landmark regulatory statutes causes many to characterize it as dysfunctional, Congress in fact remains quite active—its policymaking energy is simply concentrated in the spending domain.

Congress’s use of spending rather than regulatory legislation as its primary way of shaping national policy marks a significant shift in American governance. This Article examines the causes and consequences of that change. For Congress itself, spending has several advantages over regulatory lawmaking: spending measures can circumvent the Senate filibuster, changes in both political parties have tilted the political playing field toward spending, public choice dynamics often make spending more attractive to Congress than regulating, and spending is much less vulnerable than regulation to constitutional judicial review. But from the standpoint of the public interest, there is reason for concern about spending eclipsing regulatory legislation. Spending alone does not allow Congress to address all policy problems, and many pressing national issues cannot be remedied through spending. Spending also does not always allow Congress to deploy the most effective solutions to those problems that it does address. Moreover, normative arguments in favor of spending over regulation, such as arguments based on liberty or democracy, are weaker than they appear at first glance.

This account holds several lessons for a public law literature that has too often marginalized Congress. The spending domain provides a case study of Congress acting as a central national policymaker with the judiciary playing only a marginal role; it thus illustrates a road not traveled for our otherwise court-centered constitutional system. More practically, in the face of obstacles to regulatory legislation, spending can provide Congress with a meaningful (if indirect) way of advancing regulatory goals. Institutions and doctrines change over time, however, and greater congressional reliance on spending could lead to future efforts—most notably in the courts—to narrow Congress’s spending power.

Introduction

Congress is unproductive and dysfunctional, or so the conventional wisdom goes. Critics charge an often-gridlocked Congress with being a “broken branch” that is unable to confront national challenges.¹ Today’s Congress, on this gloomy account, contrasts with that of earlier generations. Congress once produced a “Republic of Statutes”²—landmark laws so important that they “supplement[ed] and often supplant[ed] [the] written Constitution as to the most fundamental features of governance.”³ But over the course of the last half-century, the narrative goes, Congress lost the ability to legislate. The result is a shift in power toward the executive branch, the courts, and subnational governments.⁴ Public law scholarship often takes this dim view of Congress and, as a result, focuses much less on our legislative branch than on its executive and judicial counterparts.⁵

This account resonates with Congress’ failure to enact major regulatory statutes on a host of pressing issues: climate change, immigration, gun violence, and voting rights, among others. But it largely neglects Congress’s spending power. Many of Congress’s most important policy interventions take the form of spending, rather than regulating either directly or through delegations to agencies. Congress has exercised the power of the purse since the Founding. More recently, though, it has begun to spend record sums—including by enacting multiple bills spending more than a trillion dollars each—and many of its most high-profile legislative achievements in the twenty-first century have involved spending. Congress has spent trillions of dollars to respond to emergencies,⁶ expand social safety net programs,⁷ spur scientific research and technological innovation,⁸ and strengthen the nation’s physical infrastructure.⁹ It has also used spending to address some policy problems traditionally thought to be more fitting subjects for regulation, most notably climate change.¹⁰

All told, recent Congresses have spent a staggering amount of money. To be sure, the American welfare state is still smaller than those of peer nations,¹¹ and much of the Republican Party is committed to significant spending reductions.¹² Yet Congress has spent aggressively in pursuit of a wide variety of policy goals. This turn to spending was especially pronounced during the Covid-19 pandemic, but it would be a mistake to view it as a short-term trend. Analysis of the subject-matter of major statutes, the share of pages of enacted spending versus nonspending legislation, and the arc of overall federal spending together show that Congress has, over a period of decades, retained and at times expanded its ability to spend while becoming less productive in enacting regulatory legislation.¹³

One reason for Congress’s turn to spending over regulatory legislation is simple: the filibuster. Senate rules impose a de facto supermajority requirement on regulatory legislation, with the body able to close debate and proceed to a final vote only with a three-fifths supermajority. The budget reconciliation process, however, allows Congress to circumvent this requirement for some spending measures. When the Senate is closely divided and the prospect of bipartisan cooperation on many issues is low, congressional leaders have little choice but to pursue spending rather than regulatory measures, at least when those regulatory measures are ones that divide the parties.¹⁴

Important as the filibuster and reconciliation process are, there is much more to the story. Most major spending legislation passes not through reconciliation but rather through regular order, typically with significant bipartisan support.¹⁵ Beyond the filibuster and reconciliation, then, what accounts for the turn to spending? Changing politics reinforce the trend toward spending, as the Democratic and Republican Parties have each become more open to large-scale spending, to differing degrees and for very different reasons.¹⁶ Alongside these evolving politics are longstanding public choice insights that explain why Congress is often incentivized to enact spending rather than regulatory legislation: spending proposals are not as likely as regulatory ones to mobilize opposition from concentrated interests, the political costs of inaction to Congress are usually much higher for failing to spend than for failing to regulate, and spending bills typically provide legislators greater opportunity to claim credit for particularized benefits.¹⁷ Further, Congress legislates in the shadow of future judicial review, and constitutional doctrine curbs Congress’s ability to enact regulatory legislation while largely leaving its ability to spend money intact.¹⁸ Together, Senate procedure, political changes, public choice dynamics, and the prospect of judicial review all point in the same direction: each makes spending more attractive to Congress than regulatory legislation.¹⁹

What should we make of these dynamics? Spending is a critically important policymaking tool, and Congress’s ability to spend money should not be taken for granted. Spending can address pressing policy problems, promote the general welfare, and advance equality. A Congress unable to spend money would represent a significant failure of governance. Continued spending activity by Congress represents one of the first branch’s essential powers and serves as a counterweight to executive and judicial power in other domains.

A Congress that can much more readily spend money than enact regulatory legislation is severely limited, however. Most obviously, Congress is able and incentivized to address policy problems that can be tackled through spending rather than those that call for regulation. But prioritizing spending can prevent Congress from tackling a range of critical issues, such as immigration policy, criminal justice policy, the soundness of the financial system, the safety of consumer products, labor-management relations, regulation of artificial intelligence and biotechnology, and voting rights and other democracy reforms.²⁰ In the face of persistent worry about the stability of the financial system, the fate of the American worker, the threats of new technologies, and the potential for democratic backsliding, Congress’s frequent inability to deliver legislation on those and other issues may lead citizens to question whether it is capable of addressing the most important national problems. Legislative inaction on those topics may be one reason congressional approval has been conspicuously low for nearly two decades.²¹ In Richard Pildes’s words, “when democratic governments cannot deliver effectively on issues many of their members care most urgently about, that failure can lead at a minimum to distrust, alienation, withdrawal, anger, and resentment.”²²

Even for those policy challenges that Congress can address through spending, there is a problem with Congress’s inability to pass many sorts of regulatory interventions. At times, regulatory legislation could be more effective or efficient than spending as a means of accomplishing a given goal. In other instances, legislation that combines spending and regulatory interventions could be superior to spending alone.²³ Even for those who celebrate Congress’s investments to speed the clean energy transition, those investments would be even more potent if paired with certain stricter regulatory requirements. At times, the barriers to enacting regulatory legislation mean that Congress—even if it can pass spending measures—must make policy with one hand tied behind its back.

In a normative register, neither welfarist nor egalitarian theories provide support for a strict priority of Congress spending rather than regulating; to the contrary, regulatory legislation can be critical to both welfarist and egalitarian aims.²⁴ Despite some countervailing arguments sounding in ideas of coercion and democracy, it is hard to justify the asymmetry that currently exists between spending and regulatory legislation.²⁵ And a Congress that can only spend but not enact regulatory legislation, even when such legislation is popular and would address pressing national problems, is a Congress that will fail to earn the faith of the American public as an effective organ of government.²⁶

A close examination of the law and politics of congressional spending holds several lessons for public law more generally. Congress has not disappeared from the lawmaking process, as many assume, but has rather remained active—mainly by enacting spending bills rather than the landmark regulatory statutes of past eras. Neglecting spending leads to underselling the importance of Congress in the contemporary separation of powers system.²⁷ The charge of congressional gridlock and the implications for our system of governance that flow from it may well hold true for regulatory lawmaking. But spending represents an important exception, a central function of government over which Congress still exercises significant power.²⁸

The law and politics of spending also point toward a road not traveled for public law more broadly in our age of juristocracy. Congress makes decisions about federal spending with little judicial oversight of those choices.²⁹ Regulatory policy, by contrast, is often functionally made by the executive branch, with significant supervision by the courts.³⁰ Congressional spending choices therefore offer a useful counterpoint to court-centered governance that leads us to take for granted the judiciary having the last word on many issues of regulatory policy.³¹

This Article’s analysis also points toward ways in which Congress can be an effective policymaker despite the forces that push it toward spending and make legislating on regulatory topics difficult. The most dramatic possible reform is a change to the filibuster to eliminate the asymmetry in how Senate rules treat spending and regulatory legislation. But more modest changes are possible as well. Congress could, for example, free up legislative capacity for regulatory action by reducing the amount of time that it devotes to spending matters. Further, even without any changes to the legislative process, Congress could advance many regulatory policy objectives through its power of the purse. Strategic uses of subsidies, conditional spending, and financial support for federal and state regulatory enforcement efforts are all potent tools when Congress cannot enact new regulatory statutes.³²

A word on scope is in order before proceeding. This Article compares the legal and political dynamics of spending and regulatory legislation. I define federal spending broadly to include mandatory spending, discretionary spending, and those tax expenditures that serve as de facto spending even if no funds are drawn from the federal treasury.³³ By regulatory legislation, I mean legislation that imposes or modifies legal obligations, or creates or modifies legal entitlements.³⁴ On this expansive understanding, regulatory legislation includes not only paradigmatic regulatory statutes—such as financial regulatory statutes, environmental statutes, and health and safety statutes—but also civil rights statutes, voting rights statutes, and immigration statutes.³⁵ A comparison between spending and regulatory legislation, broadly defined, allows for new insights about two of the major tools of congressional policymaking.

This analysis focuses on congressional spending itself, not on conditional spending statutes that do not themselves spend money but do impose legally binding requirements on recipients of federal funds.³⁶ Perhaps most notably, large swaths of federal civil rights law take this form. Institutions that receive federal financial assistance are barred from discriminating on the bases of race, sex, or disability, all pursuant to statutes that are triggered by the receipt of federal funding.³⁷ These sorts of statutes are not spending statutes but are rather regulatory statutes in which the regulated entity is the class of parties receiving federal financial assistance. My focus is on Congress spending money to advance particular policies or programs, not on statutes that impose regulatory requirements on all recipients of federal funds.³⁸

The Article proceeds as follows. Part I provides a brief overview of Congress’s spending power and its use of that power to pursue major policy objectives in recent years, including a case study of the turn to spending as Congress’s main tool for making climate policy. Part II examines the causes of the rise of spending as a primary tool of congressional policymaking, with a focus on legislative procedure, changing political conditions, public choice dynamics, and the shadow of constitutional law. I then shift from descriptive to normative analysis. Part III assesses the trends of persistent spending and reduced regulatory legislation, examining them from the standpoint of a range of normative values, including welfare, equality, liberty, and democracy. Part IV draws some broader lessons for public law, considers possible reform, and examines possible future directions for the law and politics of spending.

I. The Persistent Spending Power

A. Spending Power Basics

The Constitution empowers Congress to tax and spend.³⁹ This broad grant of authority contrasts with the limits on congressional power set out elsewhere in the Constitution: Congress can only enact regulatory legislation pursuant to one of its enumerated powers, but it can spend money in any way that advances the general welfare.⁴⁰ Courts defer to Congress’s determination that a given expenditure furthers the general welfare, leaving spending choices nearly entirely at Congress’s discretion.⁴¹ And Congress’s power to spend is exclusive: “No Money shall be drawn from the Treasury,” Article I provides, “but in Consequence of Appropriations made by Law.”⁴² Though institutional details have changed, and interbranch power struggles have been the norm, Congress’s role as the only branch of government able to appropriate funds has been a constant throughout our history.⁴³

Broadly speaking, congressional spending bills come in two types: mandatory and discretionary. Mandatory spending is governed by statutory criteria, often set out in longstanding statutes, rather than through the annual appropriations process.⁴⁴ As a result, mandatory spending is typically ongoing and persists unless Congress changes the underlying statute that provides for the particular spending at issue. Mandatory spending—which includes Social Security, Medicare, and interest payments on the national debt—collectively accounts for nearly two-thirds of all federal spending.⁴⁵

The remainder of federal spending is discretionary. Congress makes most appropriations on an annual basis,⁴⁶ though it sometimes enacts longer-term appropriations measures.⁴⁷ Spending touches nearly every area of federal policy: Congress funds the operation of federal agencies and the military, creates and sustains social welfare programs, provides funds to state and local governments, and supports scientific research.⁴⁸ When Congress creates grant programs, it can direct funds toward different sorts of recipients (such as states, localities, or private entities), make awards to all who meet eligibility criteria or instead through a competitive grant program, and provide funds on a one-time basis or in a more sustained way.⁴⁹ Though discretionary spending makes up less than half of all federal spending, one of Congress’s primary functions is deciding which discretionary programs to fund and in what amounts.

Discretionary spending levels are typically set through the annual appropriations process, which is governed by a thicket of statutes, cameral rules, and longstanding norms.⁵⁰ But Congress frequently deviates from that process. It sometimes authorizes spending but does not subsequently appropriate funds.⁵¹ Conversely, it sometimes appropriates money without previous authorizing legislation, in excess of the amounts authorized, or after authorization has expired.⁵² Congress also enacts some high-profile spending measures outside of the normal appropriations process altogether.⁵³ And it sometimes uses appropriations bills to advance policy goals unrelated to spending, including through appropriations riders that can change substantive law.⁵⁴ When Congress does not pass a regular appropriations measure, it generally enacts a continuing resolution, which provides temporary funding based on the previous year’s funding formula, often with some adjustments.⁵⁵

A policymaking tool closely related to direct spending is tax expenditures, which take the form of tax deductions, exclusions, or exceptions for favored activities or entities. Major categories of tax expenditures include subsidies for home ownership, retirement savings, and charitable contributions, among many others.⁵⁶ It will often appeal to Congress to use tax expenditures, since doing so is a means of providing a subsidy without appropriating funds. As such, some (though not all) scholars view tax expenditures as tantamount to spending.⁵⁷ In some key respects, tax expenditures more closely resemble mandatory rather than discretionary spending: Tax expenditures are not subject to the annual appropriations process, they usually persist unless modified or repealed, and any person or entity that meets applicable statutory requirements can claim the benefit of a tax expenditure.⁵⁸

B. Spending or Regulatory Legislation?

Historically, many of Congress’s most important policy achievements have been regulatory statutes. The past half-century, however, has witnessed a steady decline in Congress’s productivity in enacting such statutes. At the same time, Congress has continued to appropriate funds from the federal fisc, and recent years have featured multiple trillion-plus-dollar spending measures that eclipse spending in earlier eras. This section traces each of those shifts.

1. Declining regulatory legislation, persistent spending. Regulatory statutes are central to American law and touch nearly every area of life and commerce. Yet most landmark regulatory statutes are products of earlier eras: the Progressive Era,⁵⁹ the New Deal,⁶⁰ and the 1960s and early 1970s.⁶¹ Paradigm-shifting regulatory statutes from these periods—like the National Labor Relations Act, the Civil Rights Act, and the Clean Air Act—all seem beyond the reach of today’s Congress. One study of environmental lawmaking, for example, compared “[e]arlier Congresses” that were “celebrated for enacting sweeping, demanding environmental laws” with a contemporary “Congress [that] passes almost no coherent, comprehensive environmental legislation and displays no ability to deliberate openly and systematically in response to changing circumstances and new information.”⁶² Similar declines in legislative productivity exist in other areas. For decades, Congress has produced either minimal or no legislation across a host of major policy domains, including immigration,⁶³ labor,⁶⁴ gun control,⁶⁵ and voting rights .⁶⁶

Empirical evidence supports the widely held view that Congress’s production of major regulatory statutes has slowed. David Mayhew, a leading political scientist, has compiled a comprehensive dataset of important statutes enacted from 1947 to 2018.⁶⁷ During the first half of that period (1947–82), Congress enacted fifty-seven important statutes imposing new regulatory requirements on the private sector or modifying the content of existing regulatory law.⁶⁸ During the second half of that period (1983–2018), Congress enacted only twenty-five such statutes. The dearth of major regulatory legislation since the 1980s is especially pronounced for the smaller subset of statutes that Mayhew defines as “historically important,” roughly one-tenth of his total. Of the twenty-four historically important statutes enacted during the second half of the time period covered by Mayhew’s data set (1983–2018), only two imposed significant new regulatory requirements: the Affordable Care Act⁶⁹ and the Dodd-Frank Wall Street Reform and Consumer Protection Act.⁷⁰ Both were enacted in 2010, during a rare moment in which Democrats controlled the White House and held large majorities in the House and Senate.⁷¹ Nearly all legislation in recent decades that Mayhew classifies as historically important, however, has not resembled the landmark regulatory statutes of the mid-twentieth century. Of the historically important legislation that Mayhew identified from 1982–2018, fourteen statutes involved changes in spending policy, tax policy, or both; three had the main effect of removing existing regulatory requirements; and five related to foreign affairs or national security.⁷² Put simply, statutes that impose regulatory mandates make up a relatively small share of the most important contemporary legislation. The Mayhew data, though a crude measure in some respects, provides support for the widely held view that Congress has slowed in its pace of enacting significant regulatory statutes.⁷³

Additional analysis of Congress’s legislative output further supports the view that a greater share of Congress’s energy is going toward spending rather than regulatory legislation. One way of measuring how much of Congress’s attention is devoted to spending-related matters is by comparing the number of pages of legislative output of spending-related legislation to other types of legislation.⁷⁴ Original empirical analysis, based on pages in the United States Statutes at Large, shows a steady increase in the share of spending-related legislation, as measured by legislative pages. In the 1970s and 1980s, spending-related statutes never made up more than half of total pages of legislative output, and often made up less than one-quarter of total pages. Pages of spending-related legislation first comprised around half of the total legislative output in the late 1990s. Several times in the 2010s, pages of spending-related legislation made up upwards of two-thirds of total legislative pages.⁷⁵ To be sure, measures of legislative pages are not a precise measure of how Congress is allocating its time or what its priorities are. Nor is the length of a statute a measure of its importance; some of the most important statutes are quite short. Nonetheless, changes in the number of legislative pages enacted over time is a standard metric used by political scientists studying legislative productivity.⁷⁶ And analysis of pages of spending-related versus other legislation demonstrates a clear trend toward Congress doing a greater share of its lawmaking through spending-related measures.

In terms of dollars, federal spending has continued apace even though Congress has at times struggled to enact spending legislation. Criticisms of the budget process are many: Congress routinely misses deadlines for enacting the annual budget resolution,⁷⁷ it has not completed all of its spending bills on time since 1996,⁷⁸ it has become heavily reliant on continuing resolutions,⁷⁹ and its failure to enact spending measures has led to costly government shutdowns.⁸⁰ Despite these challenges, however, outlays steadily increased since the mid-twentieth century. Annual federal spending was generally less than $1 trillion from the end of World War II until the mid-1960s, $1–2 trillion from the mid-1960s to the late 1980s, $2–3 trillion in the 1990s and 2000s, and more than $3 trillion since (all figures in inflation-adjusted dollars).⁸¹ Similar increases appear when evaluating spending as a percentage of GDP. Annual federal spending ranged from 13–23 percent of GDP during the second half of the twentieth century, has ranged from 17–32 percent of GDP in the twenty-first century, and has not fallen below 20 percent of GDP in any year since 2008.⁸² The trend of generally rising federal spending holds across many policy areas, from national defense to health care, housing assistance to veterans’ benefits.⁸³ Nondefense discretionary spending as a percentage of GDP is lower than it was in the mid-twentieth century, but, except in times of emergency, it has consistently been roughly 3–4 percent of GDP since the 1980s.⁸⁴ Further, though Congress has occasionally attempted to create institutional rules to rein in spending, those efforts have largely failed.⁸⁵ The result is continued spending—as a means of continuing to fund longstanding operations and programs, as a way for the majority party to fulfill various policy objectives, and as a response to emergencies.

2. Major new spending initiatives. The major legislative enactments of the first Trump and Biden Administrations exemplify Congress’s openness to large-scale new spending, even in the face of gridlock on many regulatory issues. Recent Congresses have spent record amounts of money, often on a bipartisan basis and often outside of the traditional budget process. Despite frequent changes in partisan control of both the executive and legislative branches, a common feature of the contemporary Congress is major new spending initiatives even as efforts to enact major nonspending (and nontax) legislation have often faltered.

A new wave of congressional spending began with the Covid-19 pandemic, under a Republican White House and Senate. In the first year of the pandemic, Congress enacted two major spending bills: the CARES Act,⁸⁶ which totaled $2.2 trillion, and the Consolidated Appropriations Act of 2021,⁸⁷ which combined omnibus annual appropriations of $1.4 trillion with $900 billion in further pandemic relief measures.⁸⁸ The Covid-19 spending bills provided economic relief for individuals—in the form of stimulus checks for most Americans and expansions of unemployment insurance—along with financial support for businesses and subnational governments.⁸⁹ Those bills were heralded as “remarkable” for both their size and bipartisan support.⁹⁰ Critically, they marked what some described as a sea change from Republicans’ traditional small-government stance, garnering the support of the sitting Republican president and nearly all congressional Republicans.⁹¹ The exceptional nature of the pandemic emergency certainly enabled these bills, but it does not detract from the massive scale and bipartisan nature of Congress’s response.

Congress continued to aggressively deploy its power of the purse in the early Biden Administration. Bolstered by unified Democratic control on Capitol Hill, the Administration’s first major legislative initiative was the American Rescue Plan (ARP),⁹² a third spending bill spurred by the pandemic. Unlike earlier pandemic relief packages, ARP passed through the budget reconciliation process and along party lines.⁹³ The $1.9 trillion package focused on short-term but ambitious federal spending measures.⁹⁴ It provided for additional stimulus checks; extended unemployment benefits; expanded assistance to low-income Americans, including Supplemental Nutrition Assistance Program (SNAP) benefits, child and dependent tax credits, housing assistance, and Affordable Care Act subsidies; and allocated billions in funding for schools, public health, and state and local governments.⁹⁵ ARP’s proponents celebrated the bill as “the most far-reaching anti-poverty legislation” in decades, with the potential to cut child poverty in half.⁹⁶ Despite partisan divisions in Washington, ARP enjoyed broad public support, including from a majority of Republican voters.⁹⁷

While the pandemic was an obvious spur to greater federal spending, the Biden Administration also sought to direct spending in pursuit of other policy goals untethered from a particular emergency. It achieved three major bipartisan victories.⁹⁸ The Infrastructure Investment and Jobs Act (IIJA)⁹⁹ provided for $550 billion in new spending “to upgrade the nation’s roads, bridges, pipes, ports, broadband and other public works.”¹⁰⁰ The IIJA allocated $550 billion in new investments, including $110 billion for roads and bridges, $55 billion for water infrastructure, and $12.5 billion for electric-vehicle charging stations and zero-emission school buses.¹⁰¹ The CHIPS and Science Act¹⁰² provided $52.7 billion in subsidies for U.S. semiconductor production and an investment tax credit for chip plants, while also authorizing $200 billion over ten years to support scientific research.¹⁰³ The Honoring Our PACT Act¹⁰⁴ was the largest expansion of veterans’ benefits in three decades, at a projected cost of $280 billion of mandatory spending over ten years to support veterans harmed by toxic substances during their service.¹⁰⁵ Perhaps most important, however, was the emergence of spending as Congress’s tool of choice to address the climate crisis. I examine that effort next.

C. Climate Legislation: A Turn to Spending

No context better exemplifies Congress’s shift away from regulatory legislation and toward spending than efforts to fight climate change. After failed attempts to enact regulatory legislation to reduce carbon emissions, supporters of climate action in Congress pivoted toward advocacy for large-scale spending bills that would promote renewable energy and a greener economy. The turn to spending culminated in the enactment of historic 2022 legislation containing clean energy tax credits that analysts estimated may exceed $1 trillion.¹⁰⁶ While the passage of that legislation was seen by many as the culmination of decades-long efforts, it in fact marked a discontinuity: a shift away from regulatory legislation and toward spending in the climate sphere.

For decades, regulatory initiatives were the cornerstones of federal environmental law. The major environmental statutes of the twentieth century are regulatory statutes, setting out requirements binding on private parties and delegating power to administrative agencies to do the same.¹⁰⁷ In the early twenty-first century, many who were concerned about climate change sought to enact a federal cap-and-trade program, a regulatory scheme that would have set a ceiling on carbon emissions while allowing companies to trade pollution permits, thereby creating a market-based incentive to lower emissions.¹⁰⁸ A Republican president, George H.W. Bush, had earlier signed cap-and-trade legislation for airborne sulfur dioxide pollution, in response to acid rain.¹⁰⁹ States adopted cap-and-trade programs as part of efforts to control carbon emissions.¹¹⁰ Congress considered bipartisan cap-and-trade bills several times during the early 2000s, but such efforts never resulted in the enactment of legislation.¹¹¹

Senate procedure and changing politics combined to doom Congress’s efforts to enact cap-and-trade legislation. The closest that a cap-and-trade bill came to becoming law was the American Clean Energy and Security Act,¹¹² which passed the House in 2010 but was never brought to the Senate floor. The proximate cause was Senate rules: The bill’s proponents were simply unable to garner the sixty votes needed to break an anticipated Senate filibuster.¹¹³ The Senate’s supermajority cloture threshold nearly always necessitates bipartisanship, which is challenging given political polarization, and also lowers the number of senators who industry opponents must persuade to oppose a bill.¹¹⁴ Further, though some conservatives had previously supported cap-and-trade policies, many came to brand them an “economy-killing tax,” which in turn made regulatory initiatives aimed at curbing emissions using market incentives a political third rail.¹¹⁵

In contrast, the political conditions for spending measures to address climate change are considerably more favorable. Senate rules allow Congress to spend on climate-related matters without facing a Senate filibuster.¹¹⁶ Politically, spending money to promote greener sources of energy does not raise energy costs for consumers and in some instances even lowers them.¹¹⁷ Further, because climate-related spending can provide concentrated economic benefits to industry, a climate spending package has natural allies in producers of solar, wind, and other renewable energy sources.¹¹⁸ And fossil fuel companies are less likely to oppose subsidies for renewable energy than they are to oppose climate regulation. Subsidies for renewables pose a less direct threat to fossil fuel company profits and can even benefit such firms if they have investments in renewables alongside their core fossil fuel business.¹¹⁹ As one commentator noted, “by mostly focusing on financial rewards rather than punitive regulations,” advocates argue that climate spending “could build crucial political support among businesses and industries in the years to come.”¹²⁰

These dynamics help to explain why supporters of climate action in Congress shifted their focus toward spending. The Green New Deal called for spending on transportation and infrastructure to reduce dependence on fossil fuels, but it made no mention of cap and trade.¹²¹ Progressive advocates argued that public investments made through budget reconciliation are key to climate policy.¹²² Climate spending was central to the proposed Build Back Better bill, with more than half a trillion dollars dedicated to clean energy incentives and tax credits.¹²³ Commentators noted that this spending-focused approach to climate represented a strategic shift away from the historic focus on regulation as the best means for Congress to fight climate change.¹²⁴

This shift in strategy bore fruit with the passage of the Inflation Reduction Act of 2022.¹²⁵ The law was hailed as “the most ambitious action ever taken by the United States to try to stop the planet from catastrophically overheating.”¹²⁶ It included tax incentives to encourage consumers to purchase electric vehicles, financial inducements for electric utilities to pivot toward using renewable energy sources like wind or solar power, funds for oil companies that reduce their greenhouse gas emissions, and funds to spur development of green technologies.¹²⁷ All told, the value of these incentives is expected to exceed $1 trillion.¹²⁸ To be sure, implementing these programs requires administrative policymaking by federal and state agencies, but the use of carrots (largely tax credits) rather than sticks was key to the law’s passage. Its reliance on spending prompted less opposition from the fossil fuel industry, with one former senator characterizing the bill as an “easier [political] lift” because it was “all incentives.”¹²⁹

* * *

Taken together, this recent history shows a clear pattern: Congress has slowed its pace of regulatory lawmaking, while passing some record-high spending measures. This change matters for both policy outcomes and the performance of our governing institutions. Before evaluating the trend, however, the next Part examines why it has occurred.

II. Why a Republic of Spending?

Why has Congress continued to spend money, often in historically large amounts, even as its productivity in enacting regulatory statutes has declined? One answer is that some policy goals require public spending: Congress has little choice but to appropriate funds if it wants to create and sustain a social safety net, maintain the military, or improve national infrastructure. But the necessity of spending for policymaking is only part of the story. Four other forces incentivize legislators to prioritize spending over regulatory legislation. First is legislative procedure, especially Senate rules that favor spending over regulation. Second, changes in the two major political parties create a political environment much more favorable to spending than regulation. Third, a collection of public choice dynamics can prompt Congress to pursue spending over regulatory legislation, although the longstanding character of public choice dynamics does not explain the turn toward spending rather than regulatory legislation over time. Fourth, constitutional doctrine is more deferential toward congressional spending choices than toward regulatory legislation, and that asymmetry may widen in the future. These forces are of course closely intertwined—procedural rules are products of party politics and public choice dynamics, for example—but it is helpful to consider them individually to see the multiple currents all pushing toward spending over regulatory legislation.

A. Bifurcated Legislative Procedure

Congress’s procedural rules make it easier to spend than to enact regulatory legislation. The Senate’s cloture rule, Rule XXII, requires a supermajority vote in order to close debate and move to a final vote on ordinary legislation.¹³⁰ Since 1975, that rule has required the assent of three-fifths of senators duly chosen and sworn in order to close debate, which equates to sixty senators when all Senate seats are filled.¹³¹ In the nearly half-century that the contemporary cloture rule has been in effect, Republicans have never held sixty Senate seats, and Democrats have done so only briefly.¹³² The sixty-vote cloture requirement has therefore almost always functioned as a de facto bipartisanship requirement, preventing the majority party from closing debate on legislation without the support of some minority party members.

Polarization in Congress in the late-twentieth and early twenty-first centuries made the supermajority cloture requirement a major cause of legislative gridlock. During that period, congressional Republicans became significantly more conservative and congressional Democrats became somewhat more liberal.¹³³ With the parties sharply divided, the cloture rule allows a unified minority party to block legislation favored by the majority party. Polarized parties use the filibuster far more frequently than in earlier, less-polarized eras,¹³⁴ leading bills to fail even when they have the strong support of the White House, a majority of the House, and a majority (but not a supermajority) of the Senate.¹³⁵ The cloture rule, combined with partisan divisions and widespread use of the filibuster, means that the only high-profile legislation subject to the filibuster that can pass in the contemporary Congress are bipartisan measures. The limits on legislative action imposed by the cloture rule led many to condemn the rule as a major cause of congressional gridlock.¹³⁶

The difficulty of garnering sixty votes to close debate in the Senate has led the body to create exceptions to the sixty-vote threshold.¹³⁷ The most important of the Senate’s majoritarian exceptions is the budget reconciliation process.¹³⁸ The choreography of the reconciliation process is elaborate, but its most salient feature is that it allows the Senate to close debate on some spending or tax measures with a simple majority vote.¹³⁹ Critically, however, the reconciliation process is limited to legislation relating to spending and taxation—not regulation. This limitation is set out in the Byrd rule,¹⁴⁰ which, roughly speaking, distinguishes between revenue-related provisions, which are allowed under reconciliation, and regulatory provisions, which are not.¹⁴¹ This line is notoriously difficult to apply in practice, and the parties frequently disagree about whether a given provision may be included in a reconciliation bill.¹⁴² To simplify, however, the Byrd rule forecloses major changes to regulatory law through reconciliation, even if those changes impact the federal fisc. The Byrd rule has impeded both parties’ attempts to include regulatory changes in reconciliation bills: It tied Republicans’ hands during their efforts to repeal the Affordable Care Act in the late 2010s,¹⁴³ and it stopped Democrats from raising the minimum wage in 2021.¹⁴⁴

The reconciliation process has shaped the legislative agendas of presidents of both parties. The first Trump Administration’s signature legislative accomplishment, the Tax Cuts and Jobs Act,¹⁴⁵ passed through reconciliation, on party lines and with a bare majority.¹⁴⁶ Its other major legislative effort, an unsuccessful attempt to repeal the Affordable Care Act, was likewise pursued through reconciliation.¹⁴⁷ The Biden Administration’s two largest legislative successes—the American Rescue Plan and the Inflation Reduction Act—were both enacted through reconciliation. Both became law on bare party-line votes that fell far short of the sixty votes needed under the ordinary cloture rule.¹⁴⁸ The content of both were influenced by the Byrd Rule.¹⁴⁹ Bills ineligible for reconciliation, by contrast, must clear (but frequently fail to clear) the higher cloture threshold. The Biden Administration’s most high-profile nonspending legislative effort, an attempt to pass major voting rights legislation, was doomed by the cloture rule.¹⁵⁰

In sum, the Senate cloture rule, combined with the exception for budget reconciliation, is a critical institutional feature pushing Congress toward spending rather than regulatory legislation. Yet there has to be more to the story. Because Congress’s rules are endogenous, reconciliation not only tilts the playing field toward spending but also reflects an underlying congressional preference for spending that must be explained by other factors.¹⁵¹ Further, despite the importance of reconciliation, that process still accounts for a minority of overall spending bills.¹⁵² Most spending legislation is still enacted outside of the reconciliation process. I therefore turn next to the other conditions that push Congress to spend rather than regulate, even outside of reconciliation.

B. Changing Politics

A second factor that enables federal spending is the changing politics of the two parties. Over time, the Democratic Party has become more open to large-scale public spending, and the Republican Party has softened somewhat on spending even as it has become increasingly hostile toward regulation. These changes help explain the rise of spending legislation relative to regulatory legislation, and in particular shed light on why some major spending bills can pass with bipartisan support even when Congress is sharply polarized on many regulatory matters.

1. The Democratic Party. Over time, Democrats have become less restrained in using spending to pursue their policy objectives. After the Global Financial Crisis, the Obama Administration feared negative political and economic effects if it supported a stimulus larger than $1 trillion.¹⁵³ Just over a decade later, many Democratic officials came to agree that those fears were misplaced,¹⁵⁴ and multiple trillion-plus-dollar spending initiatives were core to the Biden Administration’s legislative agenda.¹⁵⁵ What changed?

One reason for greater Democratic support for spending measures is that the party became more progressive as a general matter. Democratic voters moved leftward, both on the whole and on issues relating to federal spending.¹⁵⁶ The party platform embraced progressive planks.¹⁵⁷ This leftward shift was also enabled by the defeats or retirements of moderate and conservative Democratic lawmakers, many from the South.¹⁵⁸ A more progressive Democratic Party became more open to greater federal spending.

Crises necessitating government spending likewise helped make Democrats more comfortable with large-scale spending. The Covid-19 pandemic resulted in a “seismic shift” in American politics by changing “attitudes about the role of government in helping the economy.”¹⁵⁹ One year into the pandemic, 83 percent of Democratic voters reported they would rather the federal government increase social welfare spending rather than reduce the deficit.¹⁶⁰ Housing assistance, the child tax credit, and expanded unemployment support poll especially highly, both among Democratic voters and more generally.¹⁶¹ Democrats prioritizing social welfare spending over concern about deficits represents a shift away from the prevailing fiscal attitudes during the Clinton and Obama Administrations.¹⁶² And an extended period of low interest rates and low inflation made plausible Democratic arguments that large-scale spending was possible without economic blowback.¹⁶³

Further, parts of the Democratic Party embraced an optimistic view of spending’s potential. Government spending can spur private sector activity, from housing construction to the development of vaccines, semiconductors, and green technology. Biden Administration Treasury Secretary Janet Yellen called for “modern supply side economics” to “address[] longer-term structural problems” and “invest[] in a sustainable environment.”¹⁶⁴ Progressive commentators sounded similar themes.¹⁶⁵ When Democratic agendas focus on promoting infrastructure and technologies that serve the public good, spending is a necessary part of such agendas.

The biggest downside of spending, for either party, is that it must be paid for either through present tax revenue or through borrowing. But many Democrats came to view these facts as not especially limiting. On the tax side of the ledger, spending can be especially attractive to Democrats when they can spend without either raising taxes on the middle class or increasing the deficit. In an age of high inequality, even large public investments can often be paid for through tax increases only on the wealthy. In one annual budget proposal, for example, the Biden Administration proposed $5.8 trillion in federal spending while also reducing the deficit—an outcome possible through proposed tax increases on a small number of the wealthiest Americans.¹⁶⁶ Similarly, in advocating for Build Back Better, the Biden White House claimed the legislation would have increased social spending and reduced the deficit, all without raising taxes on Americans with annual incomes of less than $400,000.¹⁶⁷ And the Inflation Reduction Act was financed not by increases in income taxes but rather on increased money for IRS enforcement, a new tax on company stock buybacks, and a corporate minimum tax—all revenue-raising provisions that did not directly affect the personal finances of the overwhelming majority of voters.¹⁶⁸ When spending programs can be paid for predominately or entirely without raising middle class taxes, Democrats can more easily pursue large-scale spending initiatives.

Further, many Democrats came to view budget constraints as less limiting than in the past. An extended period of high debt and low interest rates led some to conclude that debt is “free,” or at least that “the amount of debt that the U.S. can easily sustain is a lot larger than people used to think.”¹⁶⁹ Further, some argued that one lesson of the response to the Covid-19 pandemic is that bond markets did not police increased government spending; instead, “[g]overnments around the world issued debt as not seen since World War II, and yet interest rates plunged.”¹⁷⁰ This interpretation held special appeal on the left wing of the Democratic Party. “If money was a mere technicality,” the reasoning went, “[a]ction on social justice, climate change, the Green New Deal[] all seemed within reach.”¹⁷¹

2. The Republican Party. Unlike the Democrats, contemporary Republicans regularly seek to cut federal spending, especially spending on social welfare programs.¹⁷² The hard-right House Freedom Caucus is especially opposed to federal spending.¹⁷³ Yet Republicans as a whole have softened somewhat on spending, especially in times of emergency, while at the same time becoming increasingly strident in their opposition to regulation. The result is a Republican Party that is more open to spending—as a relative matter—as compared to other sorts of legislative action.

Mainstream Republicans in the early twenty-first century at times supported expanded federal spending, despite opposition from hardliners. The second Bush Administration, with the support of a Republican Congress, “steadily increased domestic discretionary spending,” including by “expand[ing] the Medicare entitlement to cover outpatient prescription drugs.”¹⁷⁴ This turn resulted in part from ideological shifts—the rise of “compassionate conservatism”¹⁷⁵—and in part from interest group dynamics that made it challenging for Republicans to cut domestic spending.¹⁷⁶ The Trump Administration was likewise open to expansive federal spending. When first running for president, Donald Trump eschewed traditional Republican rhetoric about deficit reduction in favor of promises not to cut entitlement programs.¹⁷⁷ Some prominent congressional Republicans called for greater domestic spending during that period.¹⁷⁸ Many Republicans embraced their own version of industrial policy, often pitched as necessary to support red-state economies and ensure U.S. global competitiveness.¹⁷⁹ And the advent of the pandemic led many of the same Republicans who strongly opposed regulatory interventions (such as mask and vaccination mandates)¹⁸⁰ to support large-scale spending in the form of the CARES Act and the Consolidated Appropriations Act of 2021.¹⁸¹ Republican-led federal spending in response to Covid-19 was so significant that one prominent economist dubbed 2020 the “year Reaganism died.”¹⁸²

Republican voters are perhaps even more open to spending than their elected officials. Large majorities of Republican voters supported cash payments to individuals during the pandemic.¹⁸³ Research on self-identified Tea Party members revealed, perhaps surprisingly, considerable support for many forms of government spending. A majority supported Social Security and Medicare, opposed cuts to those programs, and even supported tax increases if necessary to maintain those programs.¹⁸⁴ Further, large majorities “favor[ed] generous social benefits for Americans who ‘earn’ them,” though they are concerned about benefits to categories of recipients whom they view as unworthy.¹⁸⁵ As the Republican Party continues to court working class voters,¹⁸⁶ it is fair to expect that significant shares of the party coalition will support at least some types of social welfare spending. To be sure, Republican voters often elect representatives who pledge to (and do) cut social welfare spending. Underlying public opinion, however, reveals a more mixed picture of how Republican voters view spending.

Republican support for spending should not be overstated. It remains commonplace for mainstream Republicans to call for cuts in federal spending, especially social welfare spending. The far-right Freedom Caucus is especially hostile to spending.¹⁸⁷ But a Republican embrace of at least some spending has been stark enough to prompt one commentator to ask: “How did the party of fiscal sanity become the party of the biggest spending increase in modern history?”¹⁸⁸

By contrast, many Republicans are unambiguously opposed to regulation, and that opposition has become more strident over time. The Affordable Care Act’s individual mandate,¹⁸⁹ for example, was originally developed by conservatives as a market-oriented reform that would enable an expansion of health coverage while retaining a framework of private insurers.¹⁹⁰ Despite this pedigree, the mandate sparked major opposition among ideological conservatives and was nearly struck down by the Supreme Court.¹⁹¹ A cap-and-trade system to reduce carbon emissions followed a similar arc. The policy was “originally a conservative idea because it’s a market-based approach to environmental regulation,” but “the term ‘cap and trade’ has [since] become a dirty word for many Republicans.”¹⁹²

Several constituencies on the right have driven rising Republican opposition to regulation. The Tea Party “want[ed] no government regulation of their own businesses, homes, and property” and was “prickly about any use of government regulations to limit the pure autonomy of businesses and owners of private property.”¹⁹³ Certain large funders pushed the Republican Party toward more libertarian positions on regulatory policy.¹⁹⁴ Some conservative legal elites are “products of a new constellation of conservative institutions committed to a set of [libertarian] ideological principles rather than corporate interests.”¹⁹⁵ In generations past, many conservatives “made their peace with the regulatory state” when regulations sought to correct market failures.¹⁹⁶ Today, conservative opposition to regulation has become more ideological, and Republican elected officials at times run to the right of even big business on regulatory policy.¹⁹⁷

The Republican Party, in short, is much more stridently opposed to regulation as compared to spending. While it is difficult to imagine Republicans supporting most new regulatory legislation, under certain conditions Republicans have supported spending measures. Republican support for pandemic relief, infrastructure spending, industrial policy, and veterans’ benefits provide recent examples.¹⁹⁸ Even during the 2023 debt ceiling crisis, Republican congressional leadership maintained that it did not intend to cut Social Security or Medicare, which collectively make up a massive share of federal spending.¹⁹⁹ To be sure, congressional Republicans’ willingness to spend requires that the stars align with respect to both political factors (such as Republican control of government²⁰⁰) and economic ones (such as low inflation²⁰¹). But even with these provisos, Republicans are less hostile toward spending than regulation.

* * *

An additional change in the parties has also made regulatory legislation relatively more difficult to pass as compared to spending legislation: the weakening of party leaders. Passing major legislation, especially in an age of highly polarized parties, often requires that party leaders maintain discipline among their members. Under conditions of fragmentation—characterized by “the internal diffusion of power away from the party leadership to individual party members and officeholders”²⁰²—it can be especially difficult for majority parties to secure the coalitions necessary for legislating. Party leaders in the early twenty-first century are considerably weaker than in earlier eras.²⁰³ This dynamic has most obviously affected Republicans—most prominently in the form of revolts by hard-right House members against efforts by multiple Republican Speakers to cut bipartisan deals—but fragmentation exists among congressional Democrats as well.²⁰⁴

Legislating of any type will be more difficult with weaker party leaders, but there are reasons to think that weak party leaders might have special difficulty shepherding regulatory legislation through Congress. Spending legislation presents the opportunity for party leaders, even weak ones, to secure the votes of wavering members by including funding for projects or policies favored by those members. Further, when factions within a party are divided on a spending-related question (say, how large a fiscal stimulus ought to be), a compromise is often struck between the larger figure favored by one faction and the smaller number favored by another. For many sorts of regulatory legislation, it is often harder to either buy the votes of wayward party members or design policy that constitutes an acceptable middle ground for multiple competing factions. It is certainly possible—congressional history contains many examples of party leaders doing just that—but differences between spending and regulatory legislation, combined with weak party leaders, are likely another reason for the relative ease of spending as compared to regulatory measures.

C. Public Choice Dynamics

Procedural rules and changes in the two parties help explain why Congress has more easily enacted spending bills as compared to regulatory ones. But these more recent dynamics play out alongside longstanding public choice dynamics that make it easier to assemble a winning legislative coalition for spending rather than regulatory legislation.²⁰⁵ While these dynamics are not new, they do illustrate that, even before accounting for legislative procedure and party politics, the basic incentives that members of Congress face tilt the legislative playing field toward spending over regulatory legislation.

1. Allocating benefits and costs. Different sorts of policies give rise to different sorts of benefits and costs, and examining those benefits and costs can help explain why spending can be more attractive than regulatory legislation for members of Congress. For bills with concentrated benefits and diffuse costs, beneficiaries can often effectively mobilize in support of such changes, while those who bear the costs may not understand the costs or mobilize to oppose the changes.²⁰⁶ Conversely, bills that grant diffuse benefits but impose concentrated costs face a more challenging path through a legislature, because those who would bear the costs can often mobilize to defeat such bills while those who would benefit often cannot effectively organize in support.²⁰⁷

Applying this framework to spending and regulatory legislation provides a reason why Congress might prefer spending over regulation. Beneficiaries of a spending program are often well-defined and able to exercise political power. Senior citizens mobilize in support of Social Security,²⁰⁸ agricultural interests mobilize in support of farm subsidies,²⁰⁹ clean energy suppliers mobilize in support of subsidies for their industries,²¹⁰ and so forth. When beneficiaries of spending programs are well-defined, those beneficiaries can mobilize to retain and increase the support that they receive from the government.

It is typically less obvious who bears the costs of increased spending. The costs of any given federal expenditure are spread across the entire population of taxpayers, without any correspondence between a given citizen’s tax payments and any particular expenditure.²¹¹ Additionally, changes to spending allocations and changes to tax rates do not go hand in hand. Federal spending often rises (or falls) without a corresponding increase (or decrease) in taxes. When spending is funded through borrowing, today’s taxpayers need not pay any cost at all in order for the government to spend money.²¹² Spending initiatives are, in sum, often “precisely the programs that suffer from . . . concentrated benefits and diffuse costs.”²¹³

This imbalance means that while interest groups mobilize in support of spending programs that would benefit them, fewer incentives exist for mobilization against spending. Any given expenditure imposes only a trivial cost on any given taxpayer, and this diffusion of costs means that few have incentives to organize against spending as a general matter.²¹⁴ As Donald Elliott has noted, “public choice theory predicts that it will be difficult, if not impossible, to orga[n]ize the broad mass of taxpayers, as such, into an effective counterweight to spending that benefits ‘special interest groups’ with more narrowly focused interests.”²¹⁵

Regulatory legislation frequently imposes diffuse benefits and concentrated costs—the mirror image of spending legislation. Environmental law provides prominent examples. Cleaner air, cleaner water, and lower greenhouse gas emissions are widespread benefits, but regulatory requirements advancing those goals impose concentrated costs, typically on identifiable industry actors.²¹⁶ Those costs can cause regulated industries to mobilize, either to defeat the regulatory legislation entirely or to tailor it to industry needs.²¹⁷ Even when proposed regulatory legislation would benefit society overall, its concentrated costs can give the few who would be (significantly) harmed greater incentive and ability to mobilize than the many who would (slightly) benefit. These dynamics can be overcome in rare circumstances, such as the period of public interest legislation during the 1960s and early 1970s.²¹⁸ But more typically, concentrated costs and diffuse benefits make it difficult to enact regulatory legislation. Comparing the difficulty of passing regulatory legislation to the more favorable dynamics for spending legislation provides one reason why legislators might favor spending over regulatory legislation.

2. Costs of inaction. The costs of congressional inaction also favor spending legislation over regulatory legislation. For both members of Congress and society at large, the costs of legislative inaction are often greater for spending legislation than for regulatory legislation. Congress is especially incentivized to enact spending measures because failure to do so can lead to defunding of popular programs or government shutdowns.

Because discretionary spending takes the form of appropriations defined in temporal terms, congressional inaction means that funds stop flowing. Constituencies that regularly receive federal funds have a strong interest in lobbying Congress for continued funding. Consider the Farm Bill, an omnibus, multiyear law that governs both nutrition programs (most notably SNAP) and agricultural programs (such as subsidies to farmers and ranchers).²¹⁹ The Farm Bill is typically passed every five or six years,²²⁰ and Congress would incur serious costs if it declined to enact a new Farm Bill or at least extend the previous version when the Farm Bill comes up for renewal. The consequences of inaction would be so great for the various constituencies that benefit from the Farm Bill that congressional inaction would lead to severe backlash. Knowing this, for nearly a century Congress regularly enacted a new Farm Bill each time the previous one was set to expire, even during periods of divided government.²²¹

Inaction has even higher costs in emergency situations. Without the CARES Act, one study estimated, twelve million more people would have fallen into poverty in 2020.²²² Similarly, without the Recovery Act in 2009, GDP would have been lower and unemployment would have been higher.²²³ In the face of extreme economic and humanitarian crises—and in an effort “not to be blamed for blocking something in face of real dire need”²²⁴—Congress faces strong pressure to act.

Government shutdowns are perhaps the most visible consequence of inaction on spending matters. During a shutdown, nearly all unfunded operations must cease. Shutdowns have cut off funding for functions as diverse as small business loans, medical research, and food safety inspections.²²⁵ Economists have documented that shutdowns can cause billions of dollars in economic losses.²²⁶ The costs of shutdowns fall especially heavily on those who rely on federal safety net programs like the Children’s Health Insurance Program (CHIP) and the Indian Health Service.²²⁷ The prospect of a government shutdown exemplifies how congressional inaction in the spending context does not maintain the status quo. Instead, inaction can lead to major negative economic consequences, which in turn can have high political costs for Congress. For this reason, congressional leaders often have strong incentives to avoid shutdowns.

Congress does not face similar costs from failing to pass new regulatory legislation. Most regulatory legislation remains operative indefinitely, unless Congress modifies or repeals it.²²⁸ To be sure, Congress sometimes departs from this default by writing temporary legislation,²²⁹ and even when a law remains on the books unchanged, its real-world impact can shift as facts on the ground evolve.²³⁰ These caveats aside, regulatory legislation is typically legislation that remains in place. This insight points toward an asymmetry: Congress’s failure to enact new regulatory legislation will usually allow current conditions to persist, whereas its failure to enact new spending legislation will cause a change in current conditions. This asymmetry helps explain why spending legislation will often be a higher priority for Congress than regulatory legislation.

3. Serving constituents. Finally, legislators’ desires to claim credit for constituency-specific accomplishments can incentivize spending over regulatory legislation. Securing reelection is a leading aim of members of Congress, which means securing the support of a sufficient number of residents of their state or district.²³¹ For this reason, members must claim credit for policies that benefit their constituencies.²³² A rank-and-file member’s attempt to claim credit will usually not be believable if the legislative benefit at issue is sufficiently general, like a nationwide change in health care or environmental policy.²³³ Legislators are more successful in credibly claiming credit for particularized benefits, which accrue not to the general public but rather to “a specific individual, group, or geographical constituency.”²³⁴

Spending provides perhaps the most promising avenue for members of Congress to deliver localized benefits to their constituents. Targeted appropriations have long been commonplace in Congress.²³⁵ They often fly beneath the public radar, though they occasionally make national news, like infamous “bridges to nowhere.”²³⁶ Despite their generally low profile, targeted appropriations are politically critical for legislators seeking to curry favor with their constituents.²³⁷ The importance of those targeted appropriations for legislatures explains why periodic efforts to eliminate them have largely failed.²³⁸ Though legislators occasionally secure targeted regulatory benefits for their constituents,²³⁹ spending provides legislators with their most frequent opportunities to deliver targeted benefits. As a result, legislators’ reelection incentive will tend to encourage Congress to enact spending measures, given the benefits that spending can hold for sitting members.

D. Divergent Constitutional Doctrines

A final set of dynamics that make spending more attractive to Congress than regulatory legislation arises from the character of constitutional doctrine. Congress legislates in the shadow of future judicial review. Legal advisors in both Congress and the Department of Justice review bills to ensure their constitutionality.²⁴⁰ Constitutional doctrine provides courts with many avenues for striking down regulatory legislation, but the judiciary is highly deferential when spending legislation is challenged. More scrutinous judicial review of regulatory legislation will, at the margin, encourage Congress to pursue its agenda through spending instead. If the Supreme Court becomes more aggressive in striking down regulatory legislation in the years ahead, this dynamic will only become more pronounced. Congress, fearful that courts might invalidate its regulatory statutes, could reasonably come to favor spending as a means of achieving its desired policy outcomes. While judicial doctrine has not been the primary factor pushing Congress toward spending in the years prior to this Article’s writing, the doctrine’s asymmetric treatment of spending and regulatory legislation could play a more significant role in shaping congressional action in the future.²⁴¹

The Supreme Court has long been deferential toward Congress’s use of its spending power.²⁴² Since the early Republic, there has been a broad consensus that it is “exclusively within the power of the political branches, not the courts, to decide the constitutional question of what federal spending promotes the general welfare.”²⁴³ During the early New Deal period, at a time of otherwise intense conflict between the elected branches and the courts, Edward Corwin observed “the success of [Congress’s] spending power in eluding all constitutional snares.”²⁴⁴ There are outer limits of how Congress can use its spending power: Congress cannot condition funding on recipients giving up a constitutional right,²⁴⁵ exercise its spending power in violation of another constitutional provision,²⁴⁶ or impose overly coercive conditions on grants to state governments.²⁴⁷ These limits, however, in practice affect only a very small share of federal spending. More generally, the Supreme Court has “repeatedly upheld against constitutional challenge the use of [conditions on federal funds] to induce governments and private parties to cooperate voluntarily with federal policy.”²⁴⁸ This doctrine may change in the years ahead.²⁴⁹ But constitutional law, at present, gives Congress broad authority to spend as it sees fit.

By contrast, several constitutional doctrines limit Congress’s power to regulate. A brief overview reveals the many doctrinal avenues for the Supreme Court to strike down regulatory legislation, none of which apply to spending measures.

First is the Commerce Clause. Congress’s power to regulate interstate commerce serves as the foundation of nearly all of the regulatory laws that make up today’s republic of statutes, from those that outlaw discrimination to those that protect the environment.²⁵⁰ The Supreme Court went over a half-century without finding that Congress had exceeded its power under the Commerce Clause.²⁵¹ Since 1995, however, the Court has held that the commerce power does not allow Congress to regulate firearms in school zones,²⁵² create civil remedies for victims of gender-based violence,²⁵³ or require that individuals purchase health insurance coverage.²⁵⁴ Congress’s commerce power remains broad,²⁵⁵ but a future Court could read existing precedents to narrow Congress’s regulatory power. In United States v. Lopez,²⁵⁶ for example, the Court reasoned that the Gun-Free School Zones Act of 1990 “neither regulate[d] a commercial activity nor contain[ed] a requirement that the possession be connected in any way to interstate commerce.”²⁵⁷ A maximalist reading of this language would undermine Congress’s power to regulate a broad range of private conduct. Similarly, in NFIB v. Sebelius,²⁵⁸ the Court’s Commerce Clause holding rested on a distinction between Congress regulating commercial activity (which is permitted) and commercial inactivity (which is forbidden).²⁵⁹ This logic may call into question Congress’s power to impose other sorts of mandates on private individuals.²⁶⁰ Beyond existing doctrine, a more dramatic narrowing of Congress’s commerce power might command a Supreme Court majority in the future.

Second, federalism-based limits can curb Congress’s ability to enact regulatory legislation. Since the 1990s, the Supreme Court has read the Constitution to restrict Congress’s ability to compel state governments to help implement federal regulatory schemes.²⁶¹ The Court imposed new limits on Congress’s ability to legislate to enforce the Fourteenth Amendment.²⁶² And a new, judicially created principle of equal state sovereignty may prevent Congress from treating different states differently, at least in some contexts.²⁶³ Each of these limits will be relevant only in some instances, and most regulatory statutes will not run afoul of any of them. Still, these doctrinal developments can each take certain regulatory approaches off the table for Congress. At a minimum, they can give rise to constitutional doubt that may deter Congress from enacting certain types of regulatory provisions.

Third, the prospect of a revived nondelegation doctrine would make it more challenging for Congress to enact regulatory legislation. Several members of the Supreme Court have shown an interest in tightening constitutional limits on Congress’s ability to delegate to agencies.²⁶⁴ In theory, Congress can legislate around constitutional limits on delegation by imposing regulatory mandates itself or by enacting more specific delegations to agencies that satisfy whatever criteria the Court sets out. In practice, however, delegations to agencies can lower the political cost to Congress of enacting legislation; conversely, limits on delegation can raise that cost and therefore limit Congress’s production of regulatory legislation.²⁶⁵ For this reason, scholars have warned that “a revitalized non-delegation doctrine in a world of congressional gridlock is a powerfully deregulatory move.”²⁶⁶

Fourth, courts can use the First Amendment to strike down or narrowly construe regulatory requirements. Many First Amendment challenges to economic regulation have targeted state or local laws,²⁶⁷ but if ordinary commercial conduct is treated as implicating the First Amendment, Congress’s power would be limited as well. Because “virtually all government regulation affects speech,”²⁶⁸ a sufficiently expansive First Amendment could threaten practically any sort of regulatory legislation—from labor protections to health and safety requirements to limits on how data is used.²⁶⁹ The fact that “nearly all human action operates through communication or expression” means that “the contours of speech protection—more than other constitutional restraint—set the boundary of permissible state action.”²⁷⁰ If the judiciary becomes more receptive to First Amendment challenges to regulation in the years ahead, Congress would become increasingly limited in its ability to enact regulatory legislation.²⁷¹

Finally, a broader reading of the Takings Clause²⁷² could likewise limit regulatory legislation. The Supreme Court has held that a regulatory mandate “can be so burdensome as to become a taking.”²⁷³ The Roberts Court expanded the scope of what sorts of regulatory interventions count as takings that must be compensated.²⁷⁴ Its view that “a governmental mandate to relinquish specific, identifiable property as a ‘condition’ on permission to engage in commerce effects a per se taking”²⁷⁵ could limit government’s ability to recall unsafe consumer or medical products.²⁷⁶ The Court has also found that a taking occurs when a statute requires employers to provide union organizers with access to their property.²⁷⁷ Critics responded that this decision could sweep broadly to bar longstanding regulation that authorizes inspections, ranging from food safety regulations to building codes.²⁷⁸ Intellectual property²⁷⁹ and environmental²⁸⁰ regulatory requirements might also be vulnerable to takings claims. Though much of the Court’s takings jurisprudence developed outside of the context of federal legislation,²⁸¹ expanding the scope of what constitutes a taking risks narrowing Congress’s power to enact regulatory mandates.

Zooming out from doctrinal specifics, a more general picture emerges. Constitutional doctrine provides ample means for the Supreme Court to limit the scope of regulatory statutes. Even if Congress could overcome the significant hurdles to enacting regulatory legislation—including the filibuster and the political challenges discussed above—the Court could strike down such legislation. By contrast, although the Court has occasionally policed the outer bounds of Congress’s spending power, it provides Congress much more room to operate with respect to the spending power as compared to regulatory legislation. As a result, members of Congress who wish to pursue goals often viewed as regulatory in character—including curbing climate change, protecting workers, or safeguarding public health—would be reasonable in calculating that their handiwork is much more likely to survive judicial review if they pursue those goals through spending rather than through regulatory legislation.

III. Assessing the Republic of Spending

The procedural, political, and legal factors just discussed make it easier for Congress to spend than to enact regulatory legislation. This Part evaluates that state of affairs. It examines the status quo in light of five different types of normative criteria: promoting social welfare, promoting equality or distributive justice, minimizing coercion, promoting responsiveness to public preferences, and enabling governance by current rather than past majorities. While some of these criteria lend modest support to a spending-focused Congress, none can fully justify the extent to which the legislative playing field is tilted toward spending rather than regulation.

A. Social Welfare

A first inquiry is the relationship between the spending-focused Congress and social welfare. Welfarists maintain that legislation can be evaluated solely based on its impact on the welfare of the public as a whole.²⁸² From a welfarist standpoint, there is no meaningful difference between Congress improving the public welfare through spending as compared to through regulatory legislation. A bill that would produce n units of net society-wide benefits is twice as good as one that would produce n/2 units of such benefits, regardless of whether both are spending bills, both are regulatory bills, or one is a spending bill while the other is a regulatory bill.

Both spending and regulatory legislation can enhance social welfare, but there is no evidence that spending has systematically higher or lower net benefits than regulatory legislation. Economists have found high net benefits of many federal spending programs, especially those that invest in low-income children’s health and education,²⁸³ as well as for regulatory interventions that safeguard health and safety, prevent pollution, or protect workers or consumers.²⁸⁴ By the same token, ill-conceived expenditures and regulations can each fail to increase the public welfare, and might even have a negative impact. Absent evidence that either spending or regulation is systematically better at increasing public welfare, welfarist considerations cannot justify the significant thumb on the scale that prevailing institutional and political dynamics place in favor of spending over regulation.

In particular, a welfarist could object that a spending-focused Congress is ill-suited to some of the possible legislative interventions that would advance social welfare. To be sure, spending is the natural way for Congress to do many welfare-enhancing things: provide a social safety net, support medical research, strengthen national security, modernize federal infrastructure, and provide fiscal stimulus during an economic downturn.²⁸⁵ But some objectives can be advanced only through regulatory legislation. Spending alone cannot adjust an immigrant’s legal status, revise the federal criminal code, prevent banks from engaging in systemically risky behavior, bar the sale of unsafe consumer products, change the rules governing labor-management relations, or regulate artificial intelligence and biotechnology. Nor can spending change the mechanics of government, from the rulemaking procedures that federal agencies must follow to the rules governing elections. If Congress wishes to meaningfully legislate change in any of these areas, it must enact nonspending legislation.

Even in areas where spending can substitute for regulation,²⁸⁶ it might be a poor substitute in either of two respects. First, spending might be less efficient than regulation. From the standpoint of social welfare, Congress should pursue its objectives in a manner that achieves the greatest net benefits (total benefits minus total costs)—regardless of whether that decision rule points toward spending or regulation. For some goals, like reducing child poverty, spending seems particularly well-suited to the task, even if regulatory interventions could also make progress toward the goal. But for other objectives, like reducing traffic fatalities, regulatory mandates like speed limits or seat belt and airbag requirements are likely to be especially effective, even if some progress toward the goal could be made through spending as well. These stylized examples suggest a more general point: It is implausible that, across all policy areas, the most effective legislation will always involve spending or always involve regulation. In some instances, spending will be the most efficient way to achieve Congress’s goals; in others, regulation will be. The fact that the best policy will often be context-dependent provides a welfarist reason to be skeptical of a status quo in which it is much easier for Congress to spend money than to enact regulatory legislation.

Second, even when spending could, in theory, substitute for regulation, and could do so without loss of efficiency, that sort of substitution is sometimes challenging in practice. The discussion of climate legislative efforts in Part I shows how there can be political hurdles in the regulatory domain that do not exist or are less severe for spending.²⁸⁷ In other areas, however, the reverse might be true. As Mark Kelman has noted: “Politicians, sensitive to whether they have increased taxes or increased the deficit, might seek to characterize [a policy] as a regulatory scheme to keep it off-budget.”²⁸⁸ The Americans with Disabilities Act,²⁸⁹ for example, mandates that persons with disabilities receive reasonable accommodations in employment, public services, and public accommodations.²⁹⁰ It is possible that the statute’s ends could have been advanced without regulatory mandates, in the form of targeted subsidies to employers, places of public accommodation, and subnational governments. But this spending-only approach would have required massive expenditures and a new bureaucracy to administer funds, which in turn would have created political difficulties for Republicans and Democrats alike.²⁹¹ Despite the general pro-spending dynamics described in Part II, political conditions may sometimes favor regulation over spending as a means of solving a particular policy problem.

Finally, it is a false binary to treat spending and regulating as an either/or choice. On many issues, the most efficient way for Congress to advance its goals is through spending and regulatory interventions operating in tandem. A simplified version of the climate example illustrates the point. Even if a spending-only approach to reducing greenhouse gas emissions were to have advantages over a regulation-only approach, a combination of spending and regulating together is almost certainly superior to either approach alone. Whatever the optimal mix of spending and regulation for reducing greenhouse gas emissions, the dynamics described in Part II—by pushing Congress toward spending rather than regulatory legislation—can cause Congress to underproduce regulatory legislation.

The welfarist case for new regulatory legislation is made stronger in the face of changing circumstances and narrow judicial interpretations of existing regulatory statutes. Political scientists have developed models of “policy drift” and “policy decay” to explain how policies can become less effective over time if they remain static as real-world social, economic, or technological circumstances change.²⁹² When this occurs, new regulatory statutes to address those changing circumstances will often increase public welfare. The welfarist case for new regulatory statutes is greatest when the courts narrowly construe agency authority under longstanding statutes. The Supreme Court has done just that in recent years, especially when agencies have sought to use old statutes to address newer policy problems, like climate change and the Covid-19 pandemic.²⁹³ If courts broadly construed existing regulatory statutes, the case for new regulatory legislation would be weaker. But in the face of narrow interpretations of existing statutory authority, new regulatory statutes will often enhance social welfare at least as much as new spending measures.²⁹⁴

B. Equality and Distributive Justice

Effects on social welfare are not the only way of evaluating public policy. Many theories of justice hold out equality—whether political, social, or economic—as a central goal that public policy should pursue.²⁹⁵ One way of evaluating the relative ease with which Congress can enact spending as compared to regulatory measures is by asking whether that asymmetry is likely to serve the ends of equality. If the prevailing bias toward spending were to incentivize Congress to advance equality of one sort or another, that could help justify the status quo. In practice, however, a spending-focused Congress will often be unable to enact legislation that advances equality.

Begin with political and social equality.²⁹⁶ The paradigmatic legislation aimed at securing political equality—voting-related legislation—is typically regulatory in character. Federal legislation protects voting rights by barring subnational governments from undertaking specific actions²⁹⁷ and requiring that they undertake others.²⁹⁸ Similarly, legislation to advance social equality, such as bans on discrimination in public accommodations, employment, or housing, imposes regulatory mandates on the private sector.²⁹⁹ To the extent that mandates like these are necessary to secure political or social equality, the difficulty of enacting regulatory legislation should give pause to those committed to those values.

Congress could, and sometimes does, seek to advance political and social equality through spending money. It could use federal funds to incentivize subnational jurisdictions to enact certain pro-democracy reforms or enable them to open additional polling locations.³⁰⁰ It could provide a subsidy for restaurants or hotels that do not discriminate or a tax on those who do. But there are limits to pursuing political and social equality through spending rather than regulation. If Congress’s goal is to eliminate a certain behavior entirely, a system of taxes and subsidies is unlikely to be successful; some number of people, organizations, or subnational governments may have a sufficiently strong desire to continue the targeted practice that economic incentives will fail to change their behavior.³⁰¹ Further, a subsidy or a tax lacks the expressive power of an outright ban. Only a ban communicates to the public that Congress has deemed voter suppression, discrimination in public accommodations, or some other practice to be a categorical wrong. Even if economic incentives can advance political and social equality, they are necessarily limited as tools for advancing those sorts of equality.

Spending is more promising as a tool for advancing distributive justice. Distributive justice is concerned with the distribution of resources in a society. Some theories of distributive justice call for reductions in inequality between those who are better and worse off,³⁰² while others focus on ensuring that all persons have some minimum level of material resources and opportunities.³⁰³ A spending-focused Congress can pursue each of these goals. The spending power allows Congress to fund public education, Medicare, Medicaid, unemployment insurance, SNAP benefits, and other social welfare programs. The most obvious way to reduce inequality or improve the well-being of the least well off is through a robust welfare state. Though spending is not a panacea, it can be tremendously impactful in improving the lives of those whom egalitarian and sufficientarian theories dictate government is obligated to assist. Further, because politics, Senate procedure, and the specter of judicial review can make enacting regulatory legislation challenging, Congress might be more likely to focus its attention on issues of distribution that are amenable to being addressed through spending legislation. (The relatively good fit between a spending-focused Congress and distributive justice exists uncomfortably, however, alongside the fact that the United States has long had less redistribution than other advanced democracies.³⁰⁴)

Even assuming that spending can advance distributive justice, three factors counsel toward an enduring need for at least some regulatory interventions to occur alongside that spending. First, regulatory statutes play a major role in dictating the well-being of the least well off. A child born into poverty certainly benefits from social welfare spending, but their fate is also shaped by regulation. Regulatory law determines what sorts of toxins industrial facilities near the child’s home are able to emit into the air that child breathes and the water that they drink, with major implications for the child’s future well-being.³⁰⁵ Regulatory law also shapes the child’s parents’ abilities to secure employment and safely earn a living wage, which in turn directly affects the child’s future prospects.³⁰⁶ Across many other areas, from whether their family gets evicted to whether toys, medications, and vehicles are safe, the child’s fate is shaped by regulatory law.³⁰⁷

Second, even if large-scale redistribution is in principle possible through taxation and spending alone, there are political limits to the extent of direct redistribution. There is no legal impediment to the United States setting much higher tax rates in order to fund redistributive programs at far more generous levels than they have been historically. But there are political constraints to doing so. The public’s willingness to redistribute through tax-and-transfer programs has limits.³⁰⁸ As a result, the argument goes, practical politics dictates that those who favor redistribution need regulatory policy to pick up the slack of redistribution that does not take place through spending.³⁰⁹

Third, regulatory legislation can help shape the distribution of political power in ways that have downstream implications for material inequalities. Law can shape the ability of workers, tenants, debtors, and welfare beneficiaries to organize, which in turn affects their abilities to improve their material situations and exercise political power more generally.³¹⁰ Much of the relevant law in this domain is regulatory in character: for instance, laws protecting workers from being fired or tenants from being evicted as retaliation for advocating for better conditions. To be sure, spending can play a meaningful role in helping to build countervailing power by providing groups with the resources needed to organize and advocate for their interests. Even so, a backstop of regulatory law is necessary as well to protect and empower those who are economically disadvantaged.

C. Coercion

Because welfarist and egalitarian theories fail to justify a status quo tilted toward spending rather than regulatory legislation, another sort of account is needed. One possibility focuses on avoiding coercion. A defender of the status quo could contend that even if there are downsides to a spending-focused Congress from the standpoint of either welfare or equality, those downsides are justified by concerns about the coerciveness of regulatory legislation. Regulatory legislation often imposes obligations on private parties, requiring them to either take or refrain from taking some particular action, and sets out consequences for violation.³¹¹ Spending, by contrast, is less coercive. Even when money comes with strings attached, would-be recipients can always in theory (and often in practice) avoid those conditions by declining to accept the money—an option that does not exist with an outright regulatory mandate. One might therefore defend a political system that makes it easier for Congress to spend money than to impose regulatory requirements as one that is justified, on the grounds that it incentivizes (less coercive) spending rather than (more coercive) regulatory legislation.³¹²

One need not be a libertarian to think that avoiding coercion is an appropriate goal of public policy. If two policies could achieve precisely the same goal (with the same effectiveness and at the same cost), but one is more coercive than the other, avoiding coercion would provide a reason to choose one policy over the other. But real-world policies are never this simple, and there are two major reasons to reject the view that a spending-focused Congress is desirable because spending is less coercive than regulatory mandates.

First, minimizing coercion is not an absolute value. Virtually all theories of justice maintain that at least some types of government coercion are justified, and debates over government coercion focus on when, not if, coercion is appropriate.³¹³ Even if in some cases achieving a goal through spending is less coercive than achieving it through regulatory mandates, that fact alone does not justify Congress taking a spending-only approach. If achieving the goal through spending is only slightly less effective or efficient than doing so through regulatory legislation, that might be a worthwhile price to pay to avoid coercion. But, critically, if a spending-based approach is much less effective or efficient in achieving a worthy goal, then those other considerations may justify the coercion of opting for regulatory legislation instead. Some might object to this sort of comparison and argue that coercion and other goals are incommensurable. But this sort of comparison is necessary unless one takes the untenable position that avoiding coercion is an overriding objective that cannot be overcome under any circumstances. There is room for disagreement on how much weight avoiding coercion should have in policymaking, relative to other considerations. But coercion is only one factor among many relevant to how Congress should legislate, and not itself a trump card that should always carry the day.

Second, a focus on government coercion alone does not account for the role of government policy in preventing private coercion or exploitation. A common feature of modern life is the coercive power that private parties exercise over one another. A robust literature, for example, documents the ways in which employers exercise coercive power over employees who often have no realistic possibility of exit.³¹⁴ The same is true for the power that landlords hold over tenants, who may have few or no other housing prospects if evicted.³¹⁵ Regulatory legislation—in these contexts, employment law protections and tenant protections, respectively—deploys governmental power as a safeguard against private coercion. To condemn such government interventions as coercive, without recognizing the private coercion that they seek to prevent, is to misunderstand their real-world impact. These examples show that it is overly simplistic to rest on the coercive character of regulatory legislation as a justification for tilting the playing field toward spending legislation.

D. Democratic Representation

The foregoing discussions of welfare, equality, and coercion all concern the substance of policy. This focus is central to normative analysis, but when evaluating Congress it is not the whole story. Congress is not just any policymaking body; it is a democratically elected body. Its members are tasked with representing their constituents and the citizenry as a whole.³¹⁶ If the American people systematically preferred spending to regulation, that fact could justify a playing field tilted toward spending over regulatory legislation. In practice, however, arguments from democratic responsiveness cannot justify the greater difficulty of enacting regulatory as compared to spending legislation.

One way that political scientists evaluate governing institutions is by comparing public opinion with legislative outcomes. “A key characteristic of a democracy,” Robert Dahl argued, “is the continuing responsiveness of the government to the preferences of its citizens.”³¹⁷ Scholars of American government have thus criticized Congress for enacting laws that do not track public opinion, or that reflect the preferences of only some subset of citizens.³¹⁸ The extent of correspondence between public opinion and legislative outcomes is certainly not the only means of evaluating a democratic legislature.³¹⁹ But a democratic legislature should be at least somewhat responsive to public opinion. If the popularity of a legislative proposal had no relationship to that proposal’s likelihood of being enacted, that fact would provide normative grounds for objecting to the operation of the legislative body.

The concept of responsiveness provides a possible—but ultimately unsuccessful—means of justifying a playing field tilted toward spending over regulatory legislation. We can ask what conditions would have to exist to justify, on democratic grounds, a set of conditions making regulatory legislation harder to pass (ex ante) and subject to stricter judicial review (ex post), as compared to spending measures. The answer is twofold: first, a public opinion environment that systematically favored spending over regulation, and second, a set of pathologies in the lawmaking process that made Congress likely to depart from public opinion by underproducing spending measures, overproducing regulatory legislation, or both. Neither condition, however, holds in practice.

On the first score, polling on particular policy issues suggests the absence of an across-the-board public preference for spending over regulation. Majorities of Americans consistently support government’s pursuit of goals that are difficult, if not impossible, to achieve through spending alone: preventing discrimination, protecting consumers from unsafe products, and safeguarding the environment.³²⁰ A host of specific regulatory policy interventions enjoy strong public support.³²¹ Particular polling results are often subject to critique on methodological grounds. Still, it seems unlikely that there is a general public preference for spending over regulatory legislation of the sort that could justify a legislative playing field so heavily tilted toward the former.

On the second point, it is difficult to argue that pathologies exist in the lawmaking process that make Congress likely to excessively focus its energies on regulatory legislation rather than spending. The public choice analysis in Part II suggests precisely the opposite conclusion: Concentrated interests can sometimes thwart regulatory legislation (even if it would benefit the mass public) and induce spending (even if it would not).³²² Given this dynamic, an institutional design that seeks to yield greater correspondence between public opinion and legislative outcomes might, in some instances, do the precise opposite of what U.S. institutions do at present: place a thumb on the scale in favor of regulatory legislation. At the very least, institutional design should not exacerbate public choice dynamics by erecting further hurdles to regulatory lawmaking relative to spending.

E. Legislative Time Horizons

A final possible way of justifying asymmetries between spending and regulation looks to the time horizons of each. Spending and regulatory legislation differ not only in their content but also in how long they typically last. As already discussed, most discretionary spending is short-term in character, whereas most regulatory statutes remain in force indefinitely, unless modified or repealed. In considering whether a principled basis exists to justify the relative ease with which Congress can enact spending as compared to regulatory legislation, temporal differences provide a possible answer.

An extensive literature traces the relative benefits and costs of temporary and lasting legislation. Scholars have compared the two modes of lawmaking from the standpoint of policy quality, impact on private parties, democracy, separation of powers, and interest group theory.³²³ Yet even those who maintain that the benefits of temporary legislation will often exceed costs would struggle to justify the status quo in Congress. A hypothetical institutional designer could reasonably conclude that temporary legislation should be encouraged, whether through less onerous enactment procedures (ex ante) or more lax judicial review (ex post). This set of arrangements is not, however, what exists in practice. Proposed regulatory legislation that would sunset after only one year must still garner three-fifths of senators voting for cloture before a vote on final passage is possible. If enacted, its short-term status makes no difference to courts reviewing it against constitutional challenges. By contrast, a significant change to a federal spending program, enacted over a ten-year window and designed to create political conditions that make its extension beyond that window highly likely, can be exempt from the filibuster and is reviewed deferentially by the courts by virtue of its status as a spending measure.

Put simply, the line between spending and regulatory legislation is not the same as the line between temporary and permanent congressional action. The typical regulatory provision in a federal statute is almost certainly longer lasting than the typical spending provision, but counterexamples abound. Congress sometimes creates mechanisms for spending money into the indefinite future without the need to appropriate additional funds. The most prominent examples are mandatory spending programs: Social Security is the single largest category of federal expenditures,³²⁴ but it is not subject to the annual appropriations process.³²⁵ Many of the largest tax expenditures have likewise endured for decades.³²⁶ Conversely, Congress has inserted sunset provisions into its regulatory legislation on a wide range of topics.³²⁷ Temporal justifications for the relative difficulty of enacting regulatory legislation (as compared to spending legislation) fail because not all spending measures are temporary and not all regulatory legislation is permanent. Any attempt to justify differential treatment of spending and regulation by reference to time horizons will necessarily be both over- and under-inclusive.

* * *

Some policy problems call for spending, while others call for regulatory intervention. Spending is sometimes the best way to advance welfarist or egalitarian ends, but in other contexts regulatory legislation will be more effective. Attempts to justify the relative ease of spending as compared to regulatory legislation by reference to other considerations—coercion, democratic responsiveness, and temporal considerations—are not especially convincing. As a matter of first-best constitutional design, then, it is hard to justify the status quo. But the asymmetry between spending and regulatory legislation is an essential feature of the second-best world in which we live. I turn next to the lessons of that state of affairs.

IV. Lessons and Reforms

A fundamental force shaping the contemporary legislative process is a collection of dynamics that push Congress toward spending rather than regulating. These dynamics, I have argued, can have harmful effects. They can prevent Congress from tackling important policy challenges and, for the problems that Congress can confront, a spending-only approach can limit Congress’s effectiveness. This Part considers the lessons of the analysis presented above. It begins by examining the public law system as a whole, proceeds to consider specific reform proposals, and closes by examining sites of likely future political and legal conflict.

A. Two Models of Public Law

One lesson of this Article’s analysis is that public law’s allocation of decisional authority differs depending on whether government is spending or regulating. For spending matters, Congress remains a necessary and central actor in the policymaking process. By contrast, Congress’s frequent inability to enact or revise regulatory statutes shifts regulatory activity to other venues: the executive branch, the courts, and subnational governments. Comparing the worlds of spending and regulation sheds light on different possible allocations of public power and the consequences of those allocations. While this Article has been critical of the policy implications of Congress’s greater reliance on spending as compared to regulatory legislation, as a structural matter, federal spending serves as an example of governance by a more active Congress.

1. Congress as national policymaker. The spending domain is perhaps the primary area in which Congress still plays a leading role in federal lawmaking. One reason that Congress has retained power over spending is the constitutional command that “[n]o money shall be drawn from the Treasury but in Consequence of Appropriations made by Law.”³²⁸ But Congress and its members also benefit from holding the power of the purse. Congressional control over appropriations gives legislators opportunities for credit-claiming, which allows them to garner favor among their constituents and interest groups.³²⁹ Spending allows Congress to make national policy while imposing fewer particularized costs, relative to regulatory legislation.³³⁰ And while Congress often delegates significant power over grantmaking to the executive branch,³³¹ the power of the purse also gives Congress leverage over a powerful executive branch. Congress can adjust funding flows upward or downward each year, impose conditions on how funds may be spent, and use its oversight power to supervise how agencies spend appropriated funds.³³²

A persistent theme in the history of federal fiscal policymaking is a tug-of-war between the president and Congress. Although Article I gives Congress power over the federal purse strings, the executive branch plays a significant role in both formulating the budget and executing on spending priorities. On the budget preparation side, the White House submits annual budget proposals to Congress and holds internal budget capacity through the Office of Management and Budget.³³³ Congress has at times attempted to reclaim authority over the budget process, most notably by enacting legislation in the 1970s that created processes for Congress to develop its own budget and created new institutions in the form of the House and Senate Budget Committees and the Congressional Budget Office.³³⁴ Outside of the budget process, when Congress enacts spending measures in response to emergencies like the Global Financial Crisis or the Covid-19 pandemic, those measures are often negotiated directly between congressional leadership and senior executive branch officials.³³⁵

The details of these executive-legislative dynamics risk obscuring the forest for the trees, however. The fundamental point is that Congress retains an indispensable role in the process of enacting a federal budget and other spending measures.³³⁶ Some argue that Congress has ceded too much power over the budget process to the president,³³⁷ and the president indeed has enormous power over how federal funds are spent.³³⁸ Even so, however, Congress is still central to how the federal government spends money.

Congress’s continued role in spending federal funds contrasts with its reduced role in the regulatory domain, especially relative to the executive branch. The president, “in the face of congressional abdication has, many believe, become increasingly imperial and omnipotent over the course of the twentieth century.”³³⁹ Presidents seek to enact their agendas, keep their campaign promises, and please particular constituencies. When Congress does not enact regulatory measures, the result is “increased pressure on the president to address issues unilaterally and increased presidential willingness to do so in order to achieve desired policy.”³⁴⁰ In some areas, recent presidents have “increasingly used executive orders and memoranda as substitutes for failed domestic-policy legislative efforts.”³⁴¹ One reason for this expanded use of unilateral executive action is the filibuster, which, by making regulatory legislation difficult to enact, “results in the transfer of power from Congress to the other branches, and especially to the executive.”³⁴² But public choice and political dynamics also contribute, and even without the filibuster Congress would still face hurdles to enacting regulatory legislation. With Congress playing a diminished role in regulatory lawmaking, the spending domain shows how Congress still contributes to national governance.

2. Policymaking without the courts? The Supreme Court plays a leading role in many areas of national policy. Critics have described the contemporary United States as a “juristocracy” that “empowers constitutional judges to an extraordinary extent to make enormous policy decisions.”³⁴³ Spending is, at least in part, an exception to this general rule. The Court has interpreted the Constitution as giving Congress a wide berth in deciding how to spend money and what conditions to impose on the money that it spends.³⁴⁴ (Executive branch decisions about spending implicate different legal issues,³⁴⁵ but for present purposes my focus is on judicial review of Congress’s spending choices.) In an age when many take for granted that the Supreme Court has the last word on major issues of federal policy, Congress’s spending choices are a case of an elected branch operating without significant judicial oversight.

The process for negotiating spending legislation is often contentious, but it shows that the elected branches can make policy without oversight by the courts. Spending measures are debated between the parties within the House and Senate, between the two chambers, and between Congress and the executive branch. Political actors negotiate whether to spend money on particular programs, how much spending is appropriate, and so forth. The resultant compromises often fully satisfy neither party, and at times negotiations break down and government shutdowns result.³⁴⁶ But Congress’s production of spending legislation shows that it is possible to have a major area of federal policy negotiated by the elected branches without a central role for the courts.

This observation calls for both descriptive and normative analysis. As a descriptive matter, why do courts generally defer to Congress’s spending choices while much more closely scrutinizing regulatory legislation? Political scientists have traced what sorts of government actors and private interest groups benefit from more searching judicial review and thus have had incentives to support the practice.³⁴⁷ A corollary question could be asked about spending: What sets of actors benefit from spending measures being treated differently from regulatory legislation when it comes to judicial review?

One possibility is that Congress is especially interested in guarding its authority over spending. Given the political benefits that Congress and its members can realize through spending, judicial review in the spending domain might impose greater costs on Congress than judicial review of regulatory legislation. Knowing the importance of spending to members of Congress, and the prospect of a congressional response if the Court were to begin scrutinizing spending legislation, the Court might forbear.

Another possibility is that the judiciary is less interested in policing the elected branches’ spending of money as compared to regulatory authority. One potential reason for this is path dependence: The lack of a long tradition of judicial review of Congress’s spending choices might deter judges from starting now. An additional explanation lies in sociological features of federal judges, who are more likely to have interest and experience in issues of regulatory policy than budget policy.³⁴⁸ These and other possibilities are worth exploring, as they might provide a better understanding of the strategic incentives that give rise to the divergent approaches that courts take to congressional spending and regulatory legislation.

Alongside this descriptive inquiry is a normative one. Should courts be more deferential to Congress’s regulatory decisions, or more scrutinous of their spending choices? Part III explored one possible justification for a doctrinal asymmetry: The power to spend is inherently less coercive than the power to regulate and, thus, judicial review of spending decisions is less necessary or appropriate.³⁴⁹ Gillian Metzger has suggested other possible justifications might be at play, noting that “[f]orms of doctrinal marginalization that operate to enhance appropriations’ practical impact tend to be based on a perception of appropriations as primarily an issue for the [elected] branches or an identification of government funds as especially tied to sovereignty.”³⁵⁰ Although her analysis is descriptive, the two factors she identifies—the proper roles of each branch and the relationship between funding and sovereignty—each warrant further normative analysis.

B. Reinvigorating Congress’s Regulatory Role?

The core asymmetry described in this Article that it is much easier for Congress to enact spending rather than regulatory legislation. If that asymmetry has undesirable effects, then the natural question is one of reform. This section focuses on the steps Congress could take to reduce the asymmetries between spending and regulatory legislation.³⁵¹

1. Reforms. The first and most important reform Congress could make concerns the filibuster. A major source of the current asymmetry between spending and regulatory legislation is the Senate’s cloture rule. More precisely, budget reconciliation exempts some spending measures—but no regulatory legislation—from the sixty-vote cloture requirement.³⁵² Eliminating or modifying the legislative filibuster would significantly ease the passage of regulatory legislation. Calls to do so have gained significant momentum in recent years, prompted predominately by many progressives’ views that the filibuster sets too high a bar to legislative action.³⁵³ The filibuster is also the only factor described in Part II that is fully within Congress’s control. A simple majority of senators could unilaterally reform cloture procedures, including by providing for simple-majority cloture, through establishing a new Senate precedent.³⁵⁴

A full treatment of the consequences of modifying or eliminating the filibuster is beyond this Article’s scope. But the most straightforward impact of reducing the sixty-vote cloture threshold is that it would be considerably easier for Congress to enact, modify, or repeal regulatory legislation.

Changing or eliminating the filibuster would be the most potent way to reduce the asymmetry between spending and regulatory legislation. Powerful as filibuster reform would be, however, doing so would still leave in place the other dynamics examined in Part II. Most notably, political and public choice dynamics will incline Congress toward spending, even absent supermajority rules. Although filibuster reform is the single most significant change Congress could make to its procedures, it is not the only issue that bears on Congress’s incentives to enact spending as compared to regulatory legislation.

Another possible means of encouraging regulatory lawmaking in Congress would be reducing the amount of time that Congress must dedicate to spending. Legislative time is a scarce resource,³⁵⁵ and regulatory legislation competes with spending measures for Congress’s attention. Several existing ideas to reform the budget process could allow the body to devote less time to spending measures: changing the budget process from an annual process to a biennial one;³⁵⁶ eliminating government shutdowns by automatically extending the previous year’s funding (or some percentage thereof) if Congress fails to enact new spending measures;³⁵⁷ and enacting automatic stabilizers, mechanisms “pre-designed by Congress when legislation is first enacted” so that policy (including fiscal policy) automatically adjusts itself when prespecified circumstances, such as a rise in unemployment to a given level, come to pass.³⁵⁸ Each of these proposals comes with their own sets of advantages and disadvantages, and none were formulated with the primary goal of freeing up legislative time for regulatory legislation. But each could have that effect.

Reforms that would reduce the time that Congress devotes to budgeting might, however, reduce the institution’s power. Charles Tiefer has argued that the “automatic continuing resolution has never had much acceptance” because, within Congress, “[t]he appropriators do not want to forfeit their role.”³⁵⁹ Matthew Lawrence has sounded a skeptical note about reforms to end government shutdowns, noting that such proposals could “shift[] power in favor of the executive and past Congresses at the expense of current and future Congresses.”³⁶⁰ Given that the budget process provides Congress with a potent point of leverage over the president, concerns about aggregation of executive power help explain (and, perhaps, justify) Congress’s historic hesitancy to enact procedures that would reduce the time it devotes to spending matters.

Congress, in short, faces a tradeoff. It could devote less of its time to spending matters, at the expense of some power in that domain, in order to devote more of its time to nonspending legislation, presumably with the promise of greater influence over regulatory policy. Whether this tradeoff is worthwhile to Congress will depend on the content of the spending and nonspending matters on the agenda, as well as the state of the economy, public opinion, and other factors. Further, Congress is famously not a unified actor.³⁶¹ The relative desirability of different reform proposals will likely vary across different groups of legislators: members of the majority and minority parties, progressives and conservatives, party leaders and rank-and-file members, members of appropriations committees and others. The incentives that legislators face will determine whether Congress ever enacts reforms to reduce the time it devotes to spending-related matters.

2. Spending as a (partial) substitute for regulatory legislation. The difficulty of institutional reform also calls for Congress to think creatively about its powers within current institutional constraints. In particular, Congress can often pursue regulatory goals through the power of the purse. In doing so, it can at times proceed without a sixty-vote supermajority, without the unfavorable political dynamics that accompany much regulatory legislation, and without running afoul of current judicial doctrines limiting federal regulatory power. Examples of this sort of approach include the following:

Subsidizing desirable conduct: Most simply, Congress can directly subsidize private conduct that it deems desirable. If, for example, Congress wants employers to improve workplace safety of a given sort, but it is unable to enact a regulatory bill that would require safer conditions, it can provide funds to employers to advance its safety objectives. In some contexts, subsidies can seek to benefit some categories of private firms over others in a competitive marketplace. This is the theory behind using government subsidies for green technology as a means of addressing climate change: Federal subsidies seek to make clean energy sources more economically advantageous, and therefore more widespread.³⁶²

Conditional spending: Congress can advance regulatory goals by attaching conditions to federal funding. Congress has long done so through grant programs that impose conditions on recipients, and the use of conditional spending is anything but novel.³⁶³ But pursuing regulatory goals through conditional spending can be especially attractive to Congress when pursuing those goals through regulatory legislation is difficult. Spending conditions that take the form of “funds X are hereby appropriated to entities that comply with conditions Y” will often be both eligible for reconciliation and safe from judicial invalidation.³⁶⁴ The Inflation Reduction Act, for example, imposed prevailing wage and apprenticeship requirements to qualify for various tax credits.³⁶⁵ Such conditions therefore allow Congress to influence the behavior of private parties even when enacting regulatory legislation is not possible.

Funding federal regulatory enforcement: The extent of regulation on the ground depends not only on the scope of regulatory statutes but also on the enforcement capacity of federal agencies. Many agencies have witnessed decreases in their enforcement budgets, which in turn prevent robust enforcement of existing regulatory statutes.³⁶⁶ Even when a congressional majority cannot enact new regulatory statutes, if it wishes to enable stricter regulation in a given area, it can increase funding to allow agencies to more fully enforce existing statutes.

Supporting state-level regulatory enforcement: While this Article’s focus has been on federal spending and regulation, state governments likewise engage in both types of policymaking. But the dynamics governing state spending and regulatory legislation are close to a mirror image of the institutional design at the federal level. Few state legislative chambers have the supermajority cloture rules that make it hard for Congress to enact regulatory legislation.³⁶⁷ But many states lack the fiscal capacity to fund robust regulatory enforcement.³⁶⁸ Many state legislatures operate under rules that aim to make spending challenging: balanced budget requirements,³⁶⁹ supermajority rules to pass budgets and raise taxes,³⁷⁰ and gubernatorial line-item vetoes.³⁷¹ Taken together, the different constraints facing the federal and state governments point toward a potentially fruitful partnership: Congress can provide states with funds, given the relative ease of federal spending, and those funds can support enforcement of state regulatory statutes, given the relative difficulty of state spending but relative ease of state regulatory lawmaking.³⁷² By providing much-needed funds to state governments, Congress may sometimes be able to further regulatory goals even when it cannot enact regulatory statutes of its own.

Congressional spending as a justification for agency enforcement: At times, congressional spending can create changed real-world conditions that in turn provide a rationale for stronger agency enforcement. Consider, in this regard, the subsidies related to green energy in the Inflation Reduction Act that I discussed in Part I. Those subsidies were designed to reduce the cost of low-carbon energy sources, a fact that the EPA cited in several rulemakings to help justify more stringent regulatory actions. For example, the EPA repeatedly referenced those subsides in justifying stronger emissions limits on both cars³⁷³ and power plants.³⁷⁴ These examples show that, to the extent that congressional spending can change the facts on the ground, they can help buttress agency rulemakings that seek to impose more stringent regulatory requirements on private actors.

Pairing taxes and subsidies: At times, using taxes and subsidies in tandem can achieve effects similar to those of more direct regulation. For example, Congress has at times been unable to secure sixty votes to close debate on an increase in the minimum wage, and a minimum wage increase is not eligible for budget reconciliation.³⁷⁵ In response, two leading economists developed a clever workaround: a de facto increase of the minimum wage through a tax on employers paying below a given amount, which in turn funds a wage subsidy for employees making less than that amount.³⁷⁶ This proposal illustrates how, by pairing a tax and a subsidy, Congress can sometimes approximate the effects of a regulatory mandate. This approach is particularly promising in the economic sphere: If Congress taxes entities that do X and transfers the gains to entities that do Y, it can create a set of incentives that in some cases will roughly approximate a regulatory regime.

None of these approaches are a perfect substitute for federal regulatory statutes. Each one, however, can allow Congress to advance some subset of regulatory goals indirectly through its use of the spending power. Collectively, this set of tools holds significant promise for those in Congress who wish to effectuate regulatory goals but face the constraints described in Part II.

C. Future Battles, in Congress and the Courts

A more favorable environment for spending as compared to regulatory legislation may have downstream effects throughout our constitutional system. The hurdles to regulatory legislation are likely to persist or become higher in the short-term future: Senate supermajority requirements, so long as they remain in place, will functionally preclude a great deal of legislation in light of congressional polarization, and a conservative Supreme Court might have constitutional objections to many possible regulatory statutes. A natural response is for a majority party in Congress with regulatory goals to pursue those goals through its power of the purse, and I have outlined a range of ways in which Congress could do just that. Yet greater and more aggressive use of the spending power might lead to greater policing of that power, whether by the Senate parliamentarian during the legislative process or by the courts through judicial review. This final section considers what those future battles could look like.

Within Congress, some of the very workarounds just discussed might be limited by the Senate parliamentarian, the civil servant tasked with interpreting and enforcing Senate rules.³⁷⁷ As we have seen, the Senate’s Byrd rule prohibits the inclusion in reconciliation bills of any provision that “produces changes in outlays or revenues which are merely incidental to the non-budgetary components of the provision.”³⁷⁸ Applying this cryptic provision “calls for the exercise of judgment,” and the Senate parliamentarian “has not laid down any bright-line test to aid that judgment.”³⁷⁹ The result is that the parliamentarian has a great deal of discretion in how narrowly or broadly to construe the Byrd rule.³⁸⁰

A Senate parliamentarian could use the Byrd rule to limit the use of various workarounds described above. Parliamentarians interpret Senate rules in light of what one described as “the unique nature of the Senate as the only institution in the federal government that gives some power to those out of power.”³⁸¹ This disposition has led to rulings in the past that placed limits on the majority’s use of budget reconciliation.³⁸² If a Senate majority were to attempt to use reconciliation to achieve regulatory goals for which it was unable to secure sixty votes for cloture, the parliamentarian could plausibly react negatively to those attempted workarounds and thereby narrow the scope of what sorts of policy changes are permissible through reconciliation.³⁸³

Congress’s use of spending to achieve regulatory goals might also prompt the judiciary, particularly the Supreme Court, to scrutinize spending to a greater extent than it has in the past. As described in Part II, the Court’s treatment of spending has long been considerably more deferential than its treatment of regulatory legislation.³⁸⁴ But the Court has shown an openness to limiting Congress’s spending power, especially with regard to conditional spending, and novel uses of the spending power to achieve regulatory ends might prompt greater judicial scrutiny in the future.³⁸⁵

The Supreme Court’s Spending Clause holding in NFIB v. Sebelius,³⁸⁶ a rare example of spending legislation being found unconstitutional, shows how the Court could go about further reining in spending that too closely resembles regulation. The Spending Clause issue in NFIB concerned the Affordable Care Act’s Medicaid expansion. The Act provided for increased Medicaid eligibility and included funding for states to cover the costs of that expansion, but it authorized the federal government to withhold all Medicaid funding from states that declined to expand Medicaid.³⁸⁷ The Court found that it was unconstitutionally coercive toward states for the federal government to deny all Medicaid funding (including funding for existing Medicaid programs) to states that declined to expand Medicaid.³⁸⁸ In so finding, the Court criticized the spending condition for leaving states without meaningful choice as to whether to expand Medicaid—in other words, for imposing a spending condition that operated too much like a regulatory mandate. The threat to cut off state Medicaid funding, the Court concluded, was not an ordinary spending condition but rather one in which “persuasion [gave] way to coercion.”³⁸⁹

It would be tempting to write off the Spending Clause holding in NFIB as sui generis. Scholars have described the distinctive conditions at play in the Medicaid context in ways that limit the holding’s applicability,³⁹⁰ and NFIB did not initiate a wave of judicial decisions striking down other federal spending conditions. Yet a future Court, especially one concerned with state sovereignty, could expand upon NFIB. The Court in NFIB expressly declined to set out a bright-line test for coercion,³⁹¹ which in turn creates room for future judicial elaboration. A Court could find a condition coercive solely based on the amount of money at issue, or solely based on the federal government changing the terms of a cooperative federalism program, or solely based on the fact that a condition leverages funding in one area to induce behavioral or policy change in another.³⁹² If the Court were to adopt one or several of these readings, a wider range of federal spending would be potentially vulnerable to constitutional challenge.³⁹³

The Supreme Court could also seek to rein in conditional spending more broadly, even when the recipients subject to conditions are not state governments. It could narrowly interpret conditions attached to spending or impose clear-statement rules on such conditions.³⁹⁴ More dramatically, some legal scholars have argued that spending conditions that seek to affect the conduct of private parties are normatively undesirable and potentially constitutionally problematic. Philip Hamburger, for example, has criticized existing judicial doctrine for “fail[ing] to stem the tide”³⁹⁵ of conditional spending and provided a detailed roadmap for how courts might go about more closely scrutinizing spending conditions of varying sorts.³⁹⁶ Hamburger argues that some spending conditions could violate nondelegation, due process, or anticommandeering principles³⁹⁷—all general constitutional law principles that have historically had little application to congressional spending decisions.³⁹⁸

The possibility that the Supreme Court would depart from existing doctrine and longstanding practice to rein in Congress’s spending power remains, for now, the realm of speculation. But the possibility has long loomed. Two decades ago, Lynn Baker and Mitchell Berman projected that if Congress used its spending power to circumvent the limits on federal power set out by the Rehnquist Court, the likely judicial response would be new limits on the spending power.³⁹⁹ This did not come to pass—with the narrow exception of NFIB—but the more that the Court limits Congress’s regulatory power, the more Congress may be tempted to respond by trying to use its spending power to pursue regulatory goals. If Congress does, it is certainly possible that the Court would react by narrowing the doctrine around conditional spending to restrict Congress’s power in that domain as well.⁴⁰⁰

Conclusion

Public law scholarship should seek to understand how institutional arrangements lead governments to adopt some policies over others. This Article has argued that several overlapping dynamics, some structural and some political, make it easier for Congress to enact major spending legislation as compared to major regulatory legislation. Congress’s ability to spend money in pursuit of its policy goals serves as a useful counterpoint to the common caricature of legislative gridlock, which emerges predominately from congressional inaction on some high-profile regulatory matters. But spending measures can circumvent the filibuster, which makes it easier for Congress to spend than to regulate. Further, members of Congress benefit from enacting spending measures because spending provides opportunities for credit claiming. And Congress has no choice but to enact spending measures if it is to avoid government shutdowns and avert economic calamity in times of emergency. For these reasons, even when Congress is unable to pass major regulatory legislation, it is likely to keep the spigot of federal funds running.

A Congress that can spend money but not enact regulatory statutes can do tremendous good, but it puts the American system of governance in a precarious position. Spending money allows Congress to address economic emergencies, fight poverty, and spur technological innovation. But spending alone does not allow Congress to address every pressing policy challenge. And for those issues that Congress does tackle, spending might not be the most effective or efficient way of doing so. Congress is therefore often making policy with one hand tied behind its back. In a more optimistic register, though, the spending power has given Congress a continued role in national policymaking, despite high levels of polarization. This is especially true when congressional action is needed to respond to emergencies like the Global Financial Crisis or the Covid-19 pandemic. Even in more ordinary times, the increasing use of continuing resolutions and an uptick in the frequency of government shutdowns should not obscure the fact that Congress funds government operations, at least most of the time, even under divided government. And the president and Congress negotiate funding measures with little by way of judicial supervision.

In sum, contemporary federal policymaking runs on two parallel tracks. The key actors making spending policy are Congress and the executive branch, while the key actors making regulatory policy are the executive branch and the courts. This Article has sought to probe the causes and consequences of Congress’s role shifting toward spending money and away from enacting regulatory legislation. If these trends continue, further work should explore in more detail the implications of a spending-focused Congress, both for public policy and for public law. If the facts on the ground change, either because Congress becomes less able to enact spending measures or because it begins enacting regulatory legislation at a greater rate, that too will be worthy of study. A full understanding of contemporary governance requires attention not only to regulation, long a mainstay of public law scholarship, but also to the law and politics of federal spending.

* Class of 1965 Professor of Law, University of California, Berkeley. © 2024 Jonathan S. Gould. For helpful conversations and feedback, I am grateful to Jacob Abolafia, Scott Adler, David Barron, Sarah Binder, Jessica Bulman-Pozen, Adam Cox, Gregory Elinson, Daniel Farber, Catherine Fisk, Rebecca Goldstein, Daniel Hemel, Howell Jackson, Olatunde Johnson, David Kamin, Adam Kern, Matthew Lawrence, Frances Lee, Ela Leshem, Daryl Levinson, Eloise Pasachoff, Vlad Perju, Richard Pildes, David Pozen, Ruth Bloch Rubin, Adam Samaha, Ganesh Sitaraman, Erik Stallman, Matthew Stephenson, Susannah Barton Tobin, Daniel Walters, Katrina Wyman, and Katharine Young; workshop participants at Berkeley, Boston College, Columbia, Georgetown, NYU, and Stanford; and students in my Congress and Public Law reading group. Thanks to Annie Benn for superb research assistance on the empirical aspects of this project, and to Nabila Abdallah, Katie O’Leary, Hadley Rood, Delia Scoville, and Sibo Wang for excellent research assistance more generally.

Appendix

This brief Appendix presents empirical information on the persistence of congressional spending and describes the data collection and analysis methods underlying the findings presented in Part I.

(A) Important Statutes

The discussion of important statutes in Part I draws from the work of David Mayhew. Mayhew describes his method for classifying statutes as major, which draws on contemporaneous news coverage, in David R. Mayhew, Divided We Govern: Party Control, Lawmaking, and Investigations, 1946–2002, at 34–73, 202–06 (2d ed. 2005). The full list of statutes analyzed in the book, as well as updated data for more recent Congresses, is available at Datasets and Materials: Divided We Govern, David Mayhew, https://campuspress.yale.edu/davidmayhew/datasets-divided-we-govern [perma.cc/47RR-8VVJ]. Taken together, Mayhew’s survey includes 428 statutes enacted from 1947–2018 that he classifies as “important,” and a smaller subset of statutes that he classifies as “historically important.” A list categorizing those statutes by primary subject-matter (e.g., spending, regulatory, tax, etc.) is on file with the author. As noted in the body text, of the twenty-four “historically important” statutes enacted during the second half of the time period covered by Mayhew’s data set (1983–2018), only two—the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), and the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010)—imposed significant new regulatory requirements. By contrast, the remaining twenty-two historically important statutes enacted during that period fell into the following other categories:

Primary effect of changing spending, tax policy, or both (14): Tax Reform Act of 1986, Pub. L. No. 99-514, 100 Stat. 2085; Omnibus Budget Reconciliation Act of 1990, Pub. L. No. 101-508, 104 Stat. 1388 (containing the Budget Enforcement Act of 1990, Pub. L. No. 101-508, tit. XIII, 104. Stat. 1388, 1388-573); Omnibus Budget Reconciliation Act of 1993, Pub. L. No. 103-66, 107 Stat. 312; Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. No. 104-193, 110 Stat. 2105; Balanced Budget Act of 1997, Pub. L. No. 105-33, 111 Stat. 251; Economic Growth and Tax Relief Reconciliation Act of 2001, Pub. L. No. 107-16, 115 Stat. 38; Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. No. 108-173, 117 Stat. 2066; Housing and Economic Recovery Act of 2008, Pub. L. No. 110-289, 122 Stat. 2654; Emergency Economic Stabilization Act of 2008, Pub. L. No. 110-343, 122 Stat. 3765; American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, 123 Stat. 115; Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Pub. L. No. 111-312, 124 Stat. 3296; Budget Control Act of 2011, Pub. L. No. 112-25, 125 Stat. 240; American Taxpayer Relief Act of 2012, Pub. L. No. 112-240, 126 Stat. 2313; Tax Cuts and Jobs Act of 2017, Pub. L. No. 115-97, 131 Stat. 2054.

Primary effect of removing existing regulatory requirements (3): North American Free Trade Agreement Implementation Act, Pub. L. No. 103-182, 107 Stat. 2057 (1993); Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56; and the sixteen rules repealed through use of the Congressional Review Act in 2017 and 2018 (which Mayhew treats collectively as a single congressional action for purposes of his analysis).

Primarily related to foreign affairs or national security (5): Authorization for Use of Military Force Against Iraq Resolution, Pub. L. No. 102-1, 105 Stat. 3 (1991); Authorization for Use of Military Force, Pub. L. No. 107-40, 115 Stat. 224 (2001); Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, Pub. L. No. 107-56, 115 Stat. 272; Authorization for Use of Military Force Against Iraq Resolution of 2002, Pub. L. No. 107-243, 116 Stat. 1498; Homeland Security Act of 2002, Pub. L. No. 107-296, 116 Stat. 2135.

(B) Legislative Pages Devoted to Spending

Examining the number and percentage of pages of legislation devoted to different sorts of enactments provides one way of measuring Congress’s attention to different sorts of issues. Figure 1 compares the overall pages of legislation passed by each Congress (all statutes with a Public Law No.) with the page count for the subset of those overall statutes that are spending-related (all enacted authorization and appropriations measures). Figure 2 shows the share of pages of spending- and non-spending-related measures, with a general trend over time of an increasing share of Congress’s output being devoted to spending-related measures.

Figure 1: Pages of Public Laws Overall and Spending-Related Legislation

Figure 2: Pages of Spending and Non-Spending Legislation

Data for Figures 1 and 2 were collected from the United States Statutes at Large, available at United States Statutes at Large, GovInfo, https://www.govinfo.gov/app/collection/statute [perma.cc/K5HL-QCCX]. For each volume, corresponding to a single session of Congress, a research assistant manually reviewed the list of Public Laws passed during the session. Laws were recorded as spending-related if the title of the law indicated that the law’s primary purpose was to make appropriations or to (re)authorize a particular program. Such laws were identified using keyword searches for legislation with titles including the terms “authoriz[e, ation, ations]” or “appropriat[e, ion, ions]” in the laws’ titles, and then results were manually reviewed to ensure that they were neither over- nor under-inclusive.

For the spending-related laws, a page count was then recorded using the table of contents pagination, or, where required (for example, when the law included appendices), by manually counting the number of pages associated with the law. The total number of pages of spending-related laws was then taken to be the sum of those page counts. The proportion of all pages associated with spending-related law was then calculated by dividing the total spending-related page count by the total page count of all public laws included in the volume. While these metrics are not perfect—most notably because nonspending provisions are sometimes included in spending legislation—they do provide a rough sense of the content of Congress’s legislative output.

(C) Spending Levels

Figure 3 shows the increase in federal spending over the course of the late twentieth and early twenty-first centuries, measured both in inflation-adjusted dollars and in percentage of gross domestic product (GDP).

Figure 3: Congressional Spending Over Time

Data is drawn from the White House’s Office of Management and Budget. See Table 1.3—Summary of Receipts, Outlays, and Surpluses or Deficits (-) in Current Dollars, Constant (FY 2012) Dollars, and as Percentages of GDP: 1940–2027, Off. of Mgmt. & Budget, https://www.whitehouse.gov/omb/budget/historical-tables/ [https://perma.cc/DSB9-YZNU]. Figure 3 begins with 1947 (the first year in the data set in which figures are not influenced by World War II-era expenditures) and ends with 2021 (the last year in which the data set provides real data on expenditures rather than projections).