by John Yoo
Two weeks later, the Court upheld the National Labor Relations Act, which had been challenged on the same grounds raised in the Sick Chicken and Carter cases.38 In NLRB v. Jones &Laughlin Steel Corp., Chief Justice Hughes led a 5-4 majority in rejecting the doctrine that manufacturing did not constitute interstate commerce. Jones & Laughlin Steel was the fourth-largest steel company in the nation, with operations in multiple states. As the Court observed, "the stoppage of those operations by industrial strife would have a most serious effect upon interstate commerce." "It is obvious," the Court found, that the effect "would be immediate and might be catastrophic." Henceforth, the Court would allow federal regulation of the economy, even of wholly intrastate activity, because of the interconnectedness of the national market. To do otherwise would be to "shut our eyes to the plainest facts of our national life" and to judge questions of interstate commerce "in an intellectual vacuum."39Justice Roberts again switched positions to make the 5-4 majority possible.
The Court's about-face sapped the strength from FDR's court-packing campaign. By May 1937, it appeared that an outright majority of the Senate opposed the proposal, and opinion polls showed that only 30 percent of the public supported it. At the end of the month, the Senate Judiciary Committee reported the bill out with an unfavorable recommendation.40 Two more events finished things. Justice Van Devanter announced his retirement, timed for the same day as the Judiciary Committee vote, giving Roosevelt his first Supreme Court appointment. His departure would give the New Deal a secure majority on the Court. The Court also upheld the Social Security Act from attack as an unconstitutional spending measure or an invasion of state sovereignty.41 The court-packing bill lost all momentum, never emerged from the House Judiciary Committee, and never reached a floor vote.
While FDR lost in Congress, he had won his larger objective. The Court would not strike down another regulation of interstate commerce for almost 60 years. Journalists and political scientists immediately attributed the "switch in time that saved nine" to FDR's threat to pack the Court.42 Even today, a few creative scholars like Bruce Ackerman defend the sweeping constitutional changes of the New Deal -- which, unlike Reconstruction, were never written into a constitutional amendment -- with the 1936 electoral landslide and the attack on the Court.43 More recent work claims that the Court's jurisprudence was evolving in a more generous direction toward federal power anyway.44 The Court, this work points out, had confidentially voted to uphold the minimum wage in West Coast Hotel on December 19, 1936, six weeks before FDR sprung his proposal on the nation. The court-packing legislation could not have pressured the Court because it obviously had little chance of passage. The argument that the 1936 elections prodded the Justices to switch positions on the New Deal also suffers from the absence of the Court as an issue during the campaign. If anything, FDR suffered politically from his confrontation with the Court. A growing bipartisan coalition against the New Deal and another sharp recession in 1938 stalled FDR's domestic agenda for the rest of his Presidency.
Nonetheless, if FDR is considered a great President because of the New Deal, critical to his success was his willingness to advance his own understanding of the Constitution. FDR never accepted the Court's right to define the powers of the federal government to regulate the economy. While FDR did not join Lincoln in declining to obey a judicial order, his administration regularly proposed laws that ran counter to Supreme Court precedent, and FDR openly questioned the competence of the judiciary to review the New Deal. He sought to change the Court's composition and size as means to pressure it to change its rulings. With the retirement of the Four Horsemen, Roosevelt would appoint Hugo Black, Stanley Reed, Felix Frankfurter, and William O. Douglas to the Court, and by 1941, eight of the nine Justices were his appointees. While they would fight about the application of the Bill of Rights against the states, among other issues, they would unanimously agree that Congress's powers to regulate the economy were almost without limit.45
In its call for a peacetime state of emergency, the New Deal went beyond changes to the balance of powers between the federal and state governments. Wartime inevitably shifts power and responsibility to the President. FDR and the New Deal Congress created an administrative state that had the same effect, but which would be permanent rather than temporary. Laws enacted in the Hundred Days and in the years after vested sweeping legislative powers in the executive branch. The executive branch became the fount of legislative proposals. FDR's bills to cut federal spending and veterans' benefits to balance the budget passed with alacrity.
The effort to engage in rational administration made the executive branch the locus of regulation -- issued through agency rulemaking, rather than acts of Congress -- as government took on the job of regulating the securities markets, banks, labor unions, industrial working conditions, and production standards. Victory was all the more difficult because war requires the rationing of scarce resources in favor of military production. Ending the Depression required stimulating demand and production of all manner of goods, essentially altering millions of market decisions made every day.
The New Deal's resemblance to mobilization relied upon a government bureaucracy more typical of wartime. America's administrative state had grown in ebbs and flows, with the early Hamiltonian vision of a state centered around the Treasury Department and the Bank, Jefferson's embargo machinery, and the massive departments of the Civil War representing the high-water marks. With the creation of the Interstate Commerce Commission in 1887, the American administrative state started to grow in earnest. Progressive-era efforts to create national administration to manage discrete economic and social issues culminated in the World War I mobilization effort, which included everything from production quotas to press censorship.46 Between 1887 and 1932, Congress created a few new agencies to oversee aspects of the economy, such as railroad rates, business competition, and the money supply. These early examples set the precedent of delegating lawmaking authority to the executive branch to set the actual rules governing private conduct.
FDR supplemented the New Deal's delegation of legislative authority to the executive branch with a focus of the political system on the President. Even before his election, FDR had made clear that the candidate, not the party, would be the center of the campaign by renting a small plane to fly to Chicago to accept his nomination in person -- the first nominee of either major party to do so. Once in office, he used new technology to reach over the heads of Congress and the media. Radio allowed the President to forge a direct relationship with the American electorate that went unfiltered by the newspapers. His famous "fireside chats," the first delivered on the day before the government reopened the banks on March 13, 1933, allowed FDR to campaign for his policies directly with the people. Roosevelt did not neglect the press either: He held twice-a-week off-the-record press conferences in the Oval Office, where reporters could ask him any question they liked. He employed his ample charm to win over the reporters, who burst out in applause after the first press conference on March 8, 1933.
FDR used these tools to marshal support for his legislative program and to change the political culture. Under Roosevelt, the President became the leading force for positive government, rather than the leader of a political system where power was dispersed among the branches of government, the states, and the political parties.47 If the Presidency were to play this leading role, it had to strengthen its control over the executive branch itself. In order to fulfill the promise of economic stability, the President wanted full command over the varied programs and policies of the government. This challenge was compounded by the New Deal's blizzard of new commissions and agencies, such as the National Recovery Administration, the Securities and Exchange Commission, and the Federal Communications Commission, as well as the lack of a rational government structure that matched form to function. When Congress enacted New Deal legislation, it usually did not reduce the size or shape of federal agencies, often simply creating another agency or layer of bureaucracy on top
of the existing ones.
Roosevelt sought to master the executive branch in various ways, with limited success. He expanded the use of aides attached to the White House to develop and implement policy instead of governing through the cabinet. FDR brought in a "Brain Trust," many of them academics who had advised him during the 1932 campaign, to develop legislation, draft speeches, and manage policy. Some were located in the White House, and others were spread in appointed positions in the agencies, but they all worked for the President.
Cabinet meetings became primarily ceremonial occasions. Policy development was evolving into the form that it has today, with meetings between the President and his White House staff and a cabinet officer and agency staff, or in special committees that include some cabinet members along with White House staff and other agency officials.48 The cabinet as a whole no longer represented leaders of important factions within the President's party, nor did there seem to be a guiding principle behind their appointment. As James MacGregor Burns has observed, "[T]he real significance of the cabinet lay in Roosevelt's leadership role. He could count on loyalty from his associates; almost everyone was 'FRBC' -- for Roosevelt before Chicago" (where the Democratic Party nominated FDR in 1932).49 The declining importance of the cabinet, both in its corporeal form and in its individual members, naturally enhanced the control of the White House over the government.
FDR used his removal power to direct policy, following the examples set by Lincoln, Jackson, and Washington. He fired the head of the Federal Power Commission, whom Hoover had appointed, and replaced him with his own man, even though legislation appeared to give the Commission itself the authority to choose the chairman.50As the United States came closer to entry into World War II, he summarily dismissed his Secretaries of War and Navy and replaced them with internationalist Republicans without serious opposition from Congress or his own party.
FDR also used his removal power to seek control over the independent agencies. Unlike the core departments, such as State, War, Treasury, and Justice, independent agencies were designed by Congress to be less amenable to presidential direction.51 Their organizing statutes usually create a multi-member commission at the top with a required balance between the political parties. In some cases, Congress shields the commission members from presidential removal except for cause (for malfeasance in office or for violating the law). Congress uses these devices to delegate the power to make legislative rules, while keeping the ability to influence its exercise and preventing its direct transfer to presidential control. Until FDR, according to Steven Calabresi and Christopher Yoo, Presidents were generally understood to have the constitutional ability to freely remove commissioners even in the presence of these "for cause" protections against removal, though it is unclear whether Presidents in fact used this authority.52
Upon taking office, FDR decided to replace the head of the Federal Trade Commission, William Humphrey, a Hoover administration appointee. The FTC had a potential role in overseeing important New Deal programs due to its responsibility to investigate "unfair methods of competition in commerce," a broad jurisdiction that allowed it to sue companies for monopolistic activity. The statute establishing the FTC allowed removal of a commissioner only in cases of "inefficiency, neglect of duty, or malfeasance in office."53FDR decided to remove Humphrey only because he wanted to have his own man in the job. FDR wrote Humphrey: "You will, I know, realize that I do not feel that your mind and my mind go along together on either the policies or the administering of the [FTC]." When Humphrey refused to leave, FDR fired him. Congress did not complain, and instead promptly confirmed FDR's nomination of a new FTC chairman. Humphrey, however, remained undaunted and sued to recover his pay for the rest of his term.
Four years later, Humphrey's estate eventually took his case to the Supreme Court, which dealt Roosevelt and the Presidency a serious blow. The Justice Department argued that the FTC statute was an unconstitutional infringement on the President's removal power and his constitutional duty to faithfully execute the laws.54 Roosevelt's lawyers relied on Myers v. United States, a nine-year-old case that had struck down a law requiring Senate consent before a President could fire a postmaster. In Myers, Chief Justice (and former President) William Howard Taft had written: "The vesting of the executive power in the President was essentially a grant of the power to execute the laws. But the President alone and unaided could not execute the laws. He must execute them by the assistance of subordinates."55 Taft concluded that the President's duty to implement the laws required that "he should select those who were to act for him under his direction" and that he must also have the "power of removing those for whom he cannot continue to be responsible." Based on this precedent, FDR seemed on safe ground.
On the same day that it decided Schechter Poultry, May 27, 1935, the Court substantially revised its removal jurisprudence. With Justice Sutherland writing, the majority held that the FTC "cannot in any proper sense be characterized as an arm or an eye of the executive." Creating a wholly new category of government, Sutherland described the FTC's functions as "quasi legislative or quasi judicial" because it investigated and reported to Congress and conducted initial adjudications on claims of anti-competitive violations before a case went to federal court.56 The FTC acted "as an agency of the legislative and judicial departments," and was "wholly disconnected from the executive department." Myers, and the President's discretionary removal authority, only applied to "purely executive officers" such as the Secretary of State or a postmaster.
The decision has long been puzzling, especially its recognition of a fourth branch of government that falls outside the three mentioned in the Constitution. Humphrey's Executor's reasoning, however, has shriveled on the vine. Recent cases continue to recognize Congress's authority to shield certain government agents (such as the independent counsel) from removal but because of the importance of their independence to their functions, even when they fall within the executive branch, not because they perform quasi legislative or judicial functions.57 Another oddity is that FDR lost at the hands of Justice Sutherland and the conservatives on the Court, who were (as we shall see) strong supporters of executive power in foreign affairs.
As they demonstrated in other decisions, the Justices were concerned with the New Deal's great expansion of federal power. They may have believed that one way to blunt centralization in the national government was to force dispersion once at the federal level.58 Not surprisingly, Congress found the Court's approach quite congenial. It could delegate authority to the executive branch while preventing the President from exercising direct control over the agency. This would naturally make the independent agencies more responsive to congressional wishes, which controlled their funding and held oversight hearings into their activities. And since the agencies were still within the executive branch, Congress could disclaim any formal responsibility for unpopular regulatory decisions. After Humphrey's Executor, Congress added "for cause" limitations on removal for members of the National Labor Relations Board, the Civil Aeronautics Board, and the Federal Reserve Board.59
Creation of the permanent administrative state strained the Presidency. With the Supreme Court and Congress limiting the main constitutional tool of executive control, independent agencies might be able to pursue policies at odds with the President's understanding of federal law. Or they might press policy mandates in a way that caused conflict with other agencies, created redundancies, or ran counter to other federal policies. A number of methods for taming the behemoth were possible. Presidents could impose order by forcing the menagerie of departments, commissions, and agencies to act according to a common plan, and thereby coordinate the activities of the government rationally; the administrative state could be freed of direct control by either the President or Congress, and instead be subject to a variety of checks and balances by all three branches; or the agencies could work closely with private business and interest groups, which would raise objections to agency action with the courts, Congress, and the White
House.
FDR rejected the idea that the administrative state should float outside the Constitution's traditional structure, and he continued to fire the heads of agencies even when Congress had arguably limited his power of removal. FDR, for example, removed the chairman of the Tennessee Valley Authority in 1938, even though Congress had established that he could only be fired for applying political tests or any other standards but "merit and efficiency" in running the agency. The chairman had attacked his TVA colleagues and had declared that he took orders from Congress, not the President. FDR removed him on the ground that the Executive Power and Take Care Clauses of the Constitution required that he control his subordinates.60 FDR established various super-cabinet entities with names like the Executive Council, the National Emergency Council, and the Industrial Emergency Committee, composed of cabinet officers, commission heads, and White House staff. None of these improvisations provided a structural solution to the challenge posed by the administrative state, as these various bodies proved a poor forum for rational planning and control over the varied arms of the federal government.
FDR's last thrust to control the administrative state required the cooperation of Congress. In 1936, the President asked a commission, headed by administration expert Louis Brownlow, to recommend institutional changes for the improved governance of the administrative state. A year later, it reported: "[T]he President needs help." Its bottom line was clear. "Managerial direction and control of all departments and agencies of the Executive Branch," Brownlow wrote, "should be centered in the President."