The Never-Ending "Business of Centralization"

What's wrong with placing a few limits on federal power?


On May 27, 1935, the U.S. Supreme Court handed down its unanimous decision in the case of Schechter Poultry Corp. v. United States. At issue was the National Industrial Recovery Act (NIRA) of 1933, a centerpiece of the New Deal's first 100 days hailed by President Franklin Roosevelt as "the most important and far-reaching legislation ever enacted by the American Congress."

FDR wasn't kidding about the law's reach. Through the creation of more than 500 "codes of fair competition," the NIRA sought to micro-manage even the smallest and most local aspects of the American economy, mandating everything from the price of food to the cost of having a shirt hemmed. As justification for this unprecedented power grab, Congress cited its constitutional authority to "regulate commerce…among the several states."

But the Supreme Court wasn't having it. The NIRA must fall, Chief Justice Charles Evans Hughes wrote for the majority, otherwise there would "be virtually no limit to the federal power, and, for all practical purposes, we should have a completely centralized government." Progressive Justice Louis Brandeis, usually a hero to the New Deal set, was equally blunt, informing White House lawyers Tommy Corcoran and Ben Cohen, "This is the end of this business of centralization, and I want you to go back and tell the president that we're not going to let this government centralize everything."

It's worth remembering that noxious law and its well-deserved fate as the battle over federal power heats up once more. After all, if you listened only to the defenders of President Barack Obama's health care plan, you might think there was something un-American about favoring any limits to the government's regulatory reach.

Consider the response to last week's ruling by federal Judge Henry Hudson—which held that requiring individuals to purchase health insurance from a private company exceeds congressional authority to regulate interstate commerce. Hudson's decision would overturn the New Deal, cried John Marshall Law School professor Steven D. Schwinn. That's "bad for us all, and bad for democracy." Mother Jones writer Nick Baumann was equally apoplectic, claiming the decision "shows how the court could neuter the entire federal government." It's "the slippery slope to the libertarian paradise," Baumann wailed.

There's been a similar freak out in response to the "Repeal Amendment," another prominent effort to limit federal power. Drafted by libertarian Georgetown law professor Randy Barnett and endorsed by politicians including Virginia Attorney General Kenneth Cuccinelli and incoming House Majority Leader Eric Cantor, this would-be 28th Amendment would empower two-thirds of the states to overturn any federal law or regulation.

It's a plan "to blow up the Constitutional system," moaned Talking Points Memo's Evan McMorris-Santoro. It's a form of right-wing "radicalism in which nothing, not even the Constitution, is sacrosanct," asserted Slate's Dahlia Lithwick.

The truth is less terrifying. Only a profoundly unpopular law could unite two-thirds of the state legislatures in opposition. What's so horrible about giving the states a veto power in such rare cases? Besides, as Barnett has argued, the amendment simply "reflects confidence in the collective wisdom of the men and women from diverse backgrounds, and elected by diverse constituencies, who comprise the modern legislatures of two-thirds of the states." What's so illiberal about that?

As for the legal challenge to the health care law, the Supreme Court is unlikely to do more than strike down the individual mandate in a narrowly crafted opinion (if it does even that); the New Deal's flawed legacy will almost certainly survive intact. Yet the upshot would be a long-overdue reminder to both Democrats and Republicans that the Constitution is not a blank check, that "this business of centralization" has gone too far. If that position was good enough for Justice Louis Brandeis, it should be good enough for his liberal descendants today.

Damon W. Root is an associate editor at Reason magazine.