The Act imposed a tax on processors of farm products, the proceeds of which to be paid to farmers who would reduce their area under cultivation and consequently their crops yields.

They are but means to an unconstitutional end.The Court struck down the Act but dealt positively with taxation and the expenditure of funds to advance the general welfare as specified in Article 1, Section 8, of the Constitution.

After comparing expansive and restrictive interpretations of the Spending Clause, the Court adopted this philosophy: The clause confers a power separate and distinct from those later enumerated[,] is not restricted in meaning by the grant of them, and Congress consequently has a substantive power to tax and to appropriate, limited only by the requirement that it shall be exercised to provide for the general welfare of the United States....

[3] It was accepted that Chief Justice Hughes did not agree with the majority opinion's argument that the law's government subsidy regulations went beyond the powers of national government and was about to write a separate opinion to uphold the Act's subsidy provision and to strike down the Act's tax provision on the grounds that it was a coercive regulation, rather than a tax measure, until Roberts convinced Hughes that he would side with him and the court's three liberal justices in future cases on agriculture that involved the Constitution's General Welfare Clause if he agreed to join his opinion.

In her dissent, Justice O’Connor noted that Butler had been the last case in which the Supreme Court struck down an Act of Congress as an overextension of its spending power.