Facts—In 1977 Congress passed the Public Works Employment Act, which provides that “at least 10 percent of federal funds for local public works projects must be used by the state or local grantee to procure services or supplies from businesses owned by minority group members, defined as United States citizens,” who are Blacks, Spanish-speaking, Orientals, Indians, Eskimos, and Aleuts. The “minority business enterprise” (MBE) section of the act also requires the government to seek out all available, qualified MBEs, lower or waive bonding requirements where feasible, help in getting working capital, and award contracts to MBEs even though they are not the lowest bidders. Several associations of construction contractors and subcontractors filed suit alleging they suffered economic injury under MBE requirements, which on its face violated the equal protection clause of the Fourteenth Amendment. The District Court upheld the MBE program and the Court of Appeals affirmed.

Question—Does the “minority business enterprise” (MBE) requirement of the Public Works Employment Act of 1977 violate the equal protection clause of the Fourteenth Amendment?

Decision—No.

Reasons—C.J. Burger (6–3). “This Court has recognized that the power to provide for the . . . general welfare” is an independent grant of legislative authority distinct from other broad congressional powers. “. . . Congress has frequently employed the spending power to further broad policy objectives by conditioning receipt of federal monies upon compliance by the recipient with federal statutory and administrative directives.      The reach of the spending power, within its sphere, is at least as broad as the regulatory powers of Congress. If, pursuant to its regulatory powers, Congress could have achieved the objectives of the MBE program, then it may do so under the spending power.” Congress “.     could have drawn on the Commerce clause to regulate the practices of prime contractors on federally funded public works projects.” Moreover a “.    review of our cases persuades us that the objectives of the MBE program are within the power of Congress under (Section) 5 ‘to enforce by appropriate legislation’ the equal protection guarantees of the Fourteenth Amendment.. . . We reject the contention that in the remedial context the Congress must act in a wholly ‘color-blind’ fashion. Where federal anti-discrimination laws have been violated, an equitable remedy may in the appropriate case include a racial or ethnic factor.      Congress, not the Courts, has the heavy burden of dealing with a host of intractable economic and social problems.”

J. Stewart and J. Stevens authored dissents calling for a color-blind constitution and associating set-asides both with shoddy work and with “animosity and discontent.”