United States v. Butler

The 1933 Ag. Adjustment Act authorized the Secretary of Agriculture to extend benefit payments to farmers who agreed to reduce their planted acreage. Processors of the covered crops were to be taxed to provide a fund for the benefit payments. Butler was receiver for a processor who paid the tax and brought suit to recover it on the ground that it was part of an unconstitutional program to control agricultural production. The court of appeals held the tax unconstitutional. The U.S. appeals.

May Congress use its taxing and spending powers to operate a self-contained program regulating agricultural production?

No.

• The power of Congress to authorize expenditures of public monies for public purposes is not limited by the direct grants of legislative power found in the Constitution, but it does have limits. Appropriations cannot be made as means to an unconstitutional end.
• Regulation of agricultural production is not a power granted to Congress; therefore it is left to the states. Attainment of such a prohibited end may not be accomplished through the use of granted powers—here, the taxing powers.
• This scheme, purportedly voluntary, in reality involves purchasing, with federal funds, submission to federal regulation of a subject reserved to the states. Because the end is invalid, it may not be accomplished indirectly through the taxing and spending power.

Affirmed.

Dissent: Courts are concerned only with the power to enact statutes, not their wisdom. The depressed state of agriculture is nationwide; therefore, the Act does provide for the “general welfare.” There is no coercion involved, since threat of loss, not hope of gain which is involved here, is the essence of economic coercion. Conditioning the receipt of federal funds on certain activity does not infringe state power.