A friend of mine brought out a quote from Madison the other day:
"If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the Government is no longer a limited one, possessing enumerated powers, but an indefinite one, subject to particular exceptions." — James Madison, letter to Edmund Pendleton, 1792
In response, I wrote a little something about what, exactly, the general Welfare means- and which form of it Madison may have been referring to in his letter.
"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."
Welfare, or "the general Welfare" - doesn't in the terms of the Preamble refer to what we commonly call Welfare in current times.
In the case of the Preamble, it refers to the need to structure the government around protection of rights, liberties, and opportunities- welfare- of everyone, instead of selecting narrow or special groups. Think "commonwealth" instead of Reagan's "welfare queen".
Now, when you get to the clause in the Constitution where the general welfare is mentioned for the second, and only other time:
(Article One, Section 8)
"The Congress shall have Power To 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; but all Duties, Imposts and Excises shall be uniform throughout the United States"
Here you get into territory where different interpretations can be made.
Specifically relating this to the Preamble, it becomes clear that providing for the general welfare could- should- mean defending liberties against transgression or limiting by special interests.
Our founding fathers had a great deal of suspicion and experience around this topic, and structured early corporate law, citizenship, the Constitution, and the Bill of Rights specifically to prevent the rise of oligarchal forms. (*cough*)
The Hamiltonian interpretation, which I believe is what Madison was arguing against the letter you quoted, is that the Congress has the right to tax and then spend the money to provide supports- what has evolved into modern welfare entitlements.
In terms of Federalism, the quote from Madison isn't a stand against the third of the four basic core elements of the Preamble, then. The idea that congress can tax, and then spend to support certain groups of persons through subsidy to ensure the "general welfare" does, hoever, seemt o bug him a bit.
Madisonian Federalism relies on 3 factors to maintain a balance- separation of powers within the federal government, the existence of state constitutions, and representative (as opposed to direct) democracy.
The first of these is commonly discussed, especially when it comes to items like a push to put congressional oversight onto the Supreme court, or when a President "deems" legislation into law.
Or the creation of law-enacting and enforcing agencies that are non elective and answer not at all to the populace of voters. (Such as the FCC, FDSA, USDA, etc)
We're all, over here on the blog, pretty familiar with the need for a separation of powers within the Executive, Legislative, and Judicial branches.
The second two legs, though, are a bit less thought of.
The second one- state consitutions standing alongside (and sometimes opposed to) the federal Consitution- this is often covered a bit under the much bandied topic of States' Rights.
But it's more than that. Insofar as the federal US Constitution does state in the Tenth amendment: "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." - The states have a whole selection of duties and responsibilities. The federal government has increasingly encroached on these, in my opinion.
To use a basic example, education is a state responsiblity, or a local one (depending on the relevant state constitution) and thus not a federal responsibility.
The third leg is often the most overlooked. A completely direct democracy is a tyranny of the masses.
The Madisonian idea here is that in a direct democracy, the majority has no controls on behavior and can become very "rude" (deadly). A small group or selection of lone symbols can and will be used in a pure democracy as targets- and this is the surest way to develop a majority of minorities when a clear majority is not present.
While representative democracy- republicanism- will "refine and enlarge the public views" through the acto f election to a council or congress. More space and effort will be given to working with other representatives, and this form is less likely to devolve into a messianic mob. (The contrast with this is evident in several European nations throughout the last several hundred years.)
One of the keys to progressivism in general is a desire to switch to more direct democracy when things don't go their way. The idea is that the individual will somehow have more power by voting directly for a president and federal legislation than he will if he votes for a representative. This is great for California, but really SUCKS for a small population state such as Nevada or Montana. The more direct the democracy gets, the less protections you have against rule by density. Take that either way.