Disaster Relief, “Do Anything” Spending Powers, and the New Deal

Less than two years after Justice Harlan Fiske Stone reportedly advised Franklin Roosevelt's secretary of labor that “You can do anything under the taxing power,” the U.S. Supreme Court ruled in U.S. v. Butler that Congress had no authority to create a system whereby farmers would receive subsidies for limiting production, with the funds coming from a tax on basic commodities. While Stone, along with Brandeis and Cardozo, voted to uphold this feature of the Agricultural Adjustment Act, a majority led by Justice Owen J. Roberts declared that this particular scheme of taxing and spending interfered with the reserve powers of the states to control local manufacturing and agriculture. Roberts cited the great nationalist Joseph Story for the proposition that “the Constitution was, from its very origin, contemplated to be a frame of a national government, of special and enumerated powers, and not of general and unlimited powers.… A power to lay taxes for the common defence and general welfare of the United States is not in common sense a general power. It is limited to those objects. It cannot constitutionally transcend them.” The AAA was “a scheme for purchasing with federal funds submission to federal regulation of a subject reserved to the states. … If the Act before us is a proper exercise of the federal taxing power, evidently the regulation of all industry throughout the United States may be accomplished by similar exercise of the same power.”