New Deal Politics

There has been an extensive discussion in the study of administrative law about the transition from direct Congressional control of regulation of economic activity and spending to more control of such activity through the executive and administrative bodies (DeMuth Sr. 2013, Epstein 2013; Price 2015). One of the key areas where the Constitution gives Congress control of federal government economic activity is in the “power of the purse.” A key question that has arisen in many recent debates is the extent to which increased executive discretion might be abused for political purposes that favor the executive. For example, if the President were given greater authority to allocate spending across the states, would he or she favor swing states with more spending to curry favor with their voters? To address that question, we examine changes in Congressional legislation that controlled the distribution of federal funds across the states during the 1920s and 1930s and the impact of increased executive discretion during the New Deal on the allocation of funds.

In the 1920s the lion’s share of federal spending distributed across states was for highways, rivers and harbors, veterans, and defense. Congress maintained relatively tight control over the distribution of spending across states. The highway program established a specific formula for the maximum federal spending in each state and required matching state expenditures. Congress directly approved all river and harbor projects of the Chief Engineer of the Army and the irrigation projects of the Bureau of Reclamation. Rules were established for the relatively small amounts of up to $1 to $2 million distributed for the Shepard-Towner child health program, agricultural experiment stations, agricultural extensions, and agricultural and mechanical colleges.

Read Full Article »
Comment
Show commentsHide Comments

Related Articles