The Supreme Court upheld the portion of the 1935 Social Security Act that established unemployment compensation.

Justice Benjamin N. CardozoCardozo, Benjamin N.;Steward Machine Co. v. Davis[Steward Machine Co. v. Davis] wrote the opinion for the 5-4 majority sustaining the 1935 Social Security Act’s provision for unemployment compensation. The Supreme Court clearly departed from its earlier decision in United States v. Butler[case]Butler, United States v.[Butler, United States v.] (1936), which was decided before Justice Owen J. Roberts switched to a more liberal position. Justices Pierce Butler, James C. McReynolds, George Sutherland, and Willis Van Devanter dissented, asserting that the Tenth Amendment limited the federal government’s taxing and spending power a position clearly rejected by the Court’s new majority.Social Security ActTaxing and spending clause;Steward Machine Co. v. Davis[Steward Machine Co. v. Davis]Social Security Act

Justice Benjamin N. Cardozo, a believer in selective incorporation, wrote the majority opinion in Steward Machine.