Andrew Yang went from being ignored by major media sites to one of the most talked-about presidential candidates running in 2020. An entrepreneur concerned about the "4th industrial revolution" (read: machines taking over our jobs), Yang built his campaign around his Freedom Dividend (Universal Basic Income) that gives everyone over 18 $1000 a month.
Purportedly, the $1000 a month would, "provide money to cover the basics for Americans while enabling us to look for a better job, start our own business, go back to school, take care of our loved ones or work towards our next opportunity." Funded by a value-added tax, the money would work towards helping people sustain themselves while they pursue other things that they want in life.
The fundamental idea of universal basic income may or may not be the right idea, but more importantly, UBI could be unconstitutional.
The tenth amendment of the Constitution says, "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."
Under the tenth amendment, any power not granted to the three branches of the government and not prohibited to the States are up to the States to implement. In other words, Congress can't make laws regarding things it wasn't specifically designated to govern.
Congress's powers are granted under Article I, Section 8 of the Constitution. Specifically, Congress may, "...lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States," among many other things.
In order for Yang to implement his Freedom Dividend, he would have to get Congressional approval. However, under the tenth amendment, Congress doesn't have the power to impose taxes to fund the Freedom Dividend, nor does it have the ability to distribute it.
On its face, it seems like Section 8 is granting Congress the power to use tax money and distribute the Freedom Dividend ("general Welfare of the United States").
However, Paul Engel from The Constitution Study writes, "There are three nouns used in the Constitution to designate the possessor of powers and over whom they can and cannot be applied: the United States, the States, and the People. The term 'United States' refers to the union of states and its government. The term 'States' or 'Several States' refers to the states either individually or collectively. And 'The People' refers to individuals."
In this case, the general welfare clause refers to the "United States." If Congress were to enact a UBI bill, it would be for the welfare of "the People" not "the United States" since universal basic income benefits individual people, not the United States collectively.
While the Constitution is written very broadly and open for lots of interpretations, Paul also offers the reasoning behind why "general welfare of the United States" doesn't apply in this case:
"...the United States of America is the name given to the union of states. (Think of a corporation created by stockholders.). Today we tend to think of states as a subdivision of the federal government, but it is, in fact, the other way around. The United States is a creation of the states to which they have delegated some of their powers. In this context, the states have delegated to Congress the power to collect taxes for a limited number of things, common defense and general welfare of the union itself. As James Madison put it, that is a general power. The rest of Article I, Section 8 are the specific powers that make up the common defense and general welfare for the union. So things like Foreign commerce, coining money, creating federal courts, establishing post roads, raising armies, etc. are the things Congress can collect taxes for since they are for the common defense and general welfare of the United States. They are not for the welfare of the states themselves or for the people of those states. "
"If the General Welfare Clause gave Congress the power to do anything they could somehow identify as in the general welfare of the people or the states of the United States, then the vast majority of the Constitution, along with the idea of a limited federal government, would be effectively void. Why create a list of powers if they are already included in the term “for the General Welfare”? This is confirmed by James Madison in Federalist Papers #41:
"It has been urged and echoed, that the power "to lay and collect taxes, duties, imposts, and excises, to pay the debts, and provide for the common defense and general welfare of the United States," amounts to an unlimited commission to exercise every power which may be alleged to be necessary for the common defense or general welfare For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power? Nothing is more natural nor common than first to use a general phrase, and then to explain and qualify it by a recital of particulars. — Federalist Papers #41
If giving out UBI isn’t an enumerated power given to Congress under the Constitution, then by the 10th amendment, Congress giving out UBI is unconstitutional and thereby illegal. After all, the United States was founded on the belief of a limited federal government, hence why any power not delegated in the Constitution is reserved for the States unless specifically prohibited, in which case the People hold them.
Indeed, even though UBI could be illegal, it wouldn't be the first. Article I, Section 8 has been one of the most hotly debated parts of the Constitution, and possibly even largely ignored. James Madison and Thomas Jefferson both agreed that the general welfare clause referred to the power enumerated to Congress later on in the Constitution (to pay debts, to provide defense, etc), while Alexander Hamilton advocated for a much broader view, expressing that the clause granted Congress the power to spend, as long as it was for the general welfare of the federal government.
Supreme Court Justice Story sided with the Hamiltonian view in United States V. Butler, writing that Section 8 granted Congress to spend as long as it was for the general welfare of the federal government. Regardless though, UBI would qualify as the general welfare of "the People" not the federal government.
Of course, by those terms, most of the federal welfare programs are illegal too, but that's for another day.
Read the flip side: Andrew Yang is Different From the Other Democratic Candidates
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