United States v. Butler

The Court struck down the Agricultural Adjustment Act as beyond the congressional taxing and spending power.

Overview

The AAA paid farmers to reduce production, funded by a tax on food processors. The Court held the scheme unconstitutional, reasoning that the spending power must be confined to the enumerated ends of the federal government and could not be used to regulate agriculture, a matter reserved to the states. The ruling was among the last major New Deal defeats before 1937, after which the Court upheld broader spending programs and Butler became a doctrinal relic of a vanished constitutional order, remembered as the high-water mark of judicial resistance to national economic regulation.