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Healthcare: The Latest in New Deal Power Debate

Seventy-five years ago, Social Security was very nearly derailed by a hostile Supreme Court. Today seemed like déjà vu all over again.

June 28, 2012

Seventy-five years ago, Social Security was very nearly derailed by a hostile Supreme Court. Today seemed like déjà vu all over again.

Back in 1937, as President Franklin Delano Roosevelt’s administration prepared to put the massive new Social Security program into effect, it had to contend with litigation claiming that the Constitution did not give the federal government the power to provide retirement insurance to the aged. The lawsuits argued this was properly a role for the states.

In language oddly resonant of the current debate over the Affordable Care Act, conservative politicians and opinion leaders railed against Social Security in apocalyptic terms. “Never in the history of the world has any measure been brought in here so insidiously designed as to prevent business recovery, to enslave workers, and to prevent any possibility of the employers providing work for the people,” said Rep. John Taber of New York, one of many fierce opponents of the law.

As the legal challenges made their way to the U.S. Supreme Court, there was a fair amount of pessimism about Social Security’s prospects. A five-justice conservative majority on the Court had overturned other signature New Deal initiatives, ruling they fell beyond the narrow list of federal powers specifically enumerated in the U.S. Constitution.

But then, in an epic showdown between the Executive and Judicial Branches, President Roosevelt unveiled his “court packing” plan in March 1937 and challenged the justices in the court of public opinion. He argued that the Court was acting “not as a judicial body, but as a policy-making body,” adding:

When the Congress has sought to stabilize national agriculture, to improve the conditions of labor, to safeguard business against unfair competition, to protect our national resources, and in many other ways, to serve our clearly national needs, the majority of the Court has been assuming the power to pass on the wisdom of these acts of the Congress – and to approve or disapprove the public policy written into these laws.

It would seem that this jawboning paid off. Over the next few months, the Court’s swing vote, Justice Owen Roberts (the Anthony Kennedy of his day), joined a five-vote majority upholding Social Security and other reform measures involving union rights and the minimum wage. They called it “the switch in time that saved nine.”

Over the following decades, the controversy over Social Security and other New Deal programs faded. It became settled law that Congress has broad power to regulate commerce and promote the general welfare. And this made the modern regulatory state – including the social safety net and the protection of workers, consumers and the environment – possible.

Maybe that is why some people have never gotten over the events of 1937. A handful of legal scholars and activists have never accepted the legitimacy of the “switch in time,” and their numbers are growing. They have worked quietly but doggedly over many years to find new ways of limiting federal power. Some even have the explicit goal of rolling back the New Deal, which once seemed like a pipe dream. But today’s close call involving Affordable Care Act – where, incredibly, four justices would have thrown out the entire Act – proves how effective these efforts have been. And we can be certain that these efforts will only accelerate, particularly if the conservative majority on the court expands through future appointments.

Two of the most provocative legal critics of the New Deal sit on the U.S. Court of Appeals for the District of Columbia – considered the country’s second highest court. (The court’s importance is underscored by the fact that President Obama has yet to get a judge confirmed there.) Judge Janice Rogers Brown, appointed by George W. Bush in 2005 after a lengthy filibuster premised on her radical views, says 1937 represented “the triumph of our own socialist revolution,” comparing it to the Russian Revolution of 1917. Judge Douglas Ginsburg, appointed by Ronald Reagan (and now on senior status), has imagined a Constitution in exile, “kept alive by a few scholars who labor on in the hope of a restoration.”

Under the tenure of former Chief Justice William Rehnquist, a so-called “new federalism” jurisprudence emerged, placing the first real limits on federal government’s power to address the nation’s problems since the New Deal. These cases were decided under cramped interpretations of the Constitution’s Commerce and Spending Clauses and an unduly expansive (and entirely novel) doctrine of “state sovereign immunity.”

But the federalism juggernaut sputtered after a few years in the face of sustained criticism. By 2006, in the case of Gonzales v. Raich, the Court defined Congress’s power to regulate interstate commerce broadly enough to reach the production and use of home grown marijuana. Even Justice Antonin Scalia joined in the result, although he took pains to insist there were still limits on the commerce power.

Today’s ruling may give comfort to conservatives seeking some limit on federal power. The four dissenting justices and Justice Roberts all wrote that the individual mandate lay outside Congress’s power under the Commerce Clause (although Roberts parted company with the others to declare that the mandate was valid under Congress’s taxing authority). It’s not clear that this has precedential value, but one thing we can be sure of is that the debate over the limits of federal power – and the legitimacy of the New Deal – is not over.