The Supreme Court's decision to declare the National Industrial Recovery Act (NIRA) and the Agricultural Adjustment Act (AAA) unconstitutional was significant in shaping the balance of power between the federal government and the states, as well as the role of government in the economy during the New Deal era.
-
NIRA Case (Schechter Poultry Corp. v. United States, 1935): The Court invalidated the NIRA, which aimed to regulate industry and promote fair competition, on the grounds that it overstepped federal authority. The justices ruled that the law delegated too much legislative power to the executive branch and that it encroached on states' rights. This decision was seen as a setback for President Franklin D. Roosevelt's New Deal policies, which aimed to combat the Great Depression through extensive government intervention in the economy.
-
AAA Case (United States v. Butler, 1936): The Court ruled the AAA unconstitutional, arguing that it used a tax on processors to subsidize farmers, which was seen as an unconstitutional exercise of federal power. The ruling highlighted the limitations of federal involvement in agricultural production and the protection of certain local interests against federal encroachment.
-
Impact and Legacy: These decisions underscored the tension between federal initiatives aimed at economic recovery and constitutional limitations. They sparked a critical dialogue about the scope of federal authority and the interpretation of the Commerce Clause. In response to the Court's pushback, FDR proposed the controversial Judicial Procedures Reform Bill of 1937, which sought to expand the number of justices on the Supreme Court, although it ultimately did not pass. However, the New Deal continued to evolve, and later policies were often crafted to address the concerns raised by the Court.
The decisions reflect broader themes in American constitutional law, including the ongoing debate about the reach of federal power versus states' rights, as well as the challenges of governance during economic crises.