Crisis and Command: A History of Executive Power from George Washington to George W. Bush (40 page)

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.
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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.
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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.
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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."

According to Brownlow, the President's political responsibilities did not match his formal authorities. "While he now has popular responsibility for this direction," the committee reported, "he is not equipped with adequate legal authority or administrative machinery to enable him to exercise it."
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Brownlow and FDR, who approved the report, held the usual concern that the administrative state was wasteful, redundant, and contradictory, but more importantly, they worried that it would become so independent as to lose touch with the people. The administrative state suffered from a democracy deficit.

The Brownlow Committee concluded that Congress must give the President more management resources, while keeping the chief executive at the center of decision-making. It advised that to make "our Government an up-to-date, efficient, and effective instrument for carrying out the will of the Nation," presidential control must be enhanced. It recommended the creation of a new entity, the Executive Office of the President (which would house the Bureau of the Budget), six new White House assistants to the President, centralization of the government's budgets and planning, and the merger of independent agencies into the cabinet departments. Brownlow's report did not call for a professional secretariat that would supervise the activities of the government, as existed in Great Britain. Rather, the new assistants to the President and the Bureau of the Budget would provide information to the President and carry out his orders, with Roosevelt still making all critical policy decisions.
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By centralizing the administrative state under the Presidency, it would become directly accountable to Congress and the American people. "Strong executive leadership is essential to democratic government today," the report concluded. "Our choice is not between power and no power, but between responsible but capable popular government and irresponsible autocracy."
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FDR had the report's recommendations distilled into a bill he presented to the congressional leadership in January 1937. In a four-hour presentation, FDR personally laid out the plan and declared: "The President's task has become impossible for me or any other man. A man in this position will not be able to survive White House service unless it is simplified. I need executive assistants with a 'passion for anonymity' to be my legs."
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Even though the 75th Congress began with a two-thirds Democratic majority, it was wary of FDR's plans and less than thrilled at the prospect of greater presidential influence over the New Deal state. Roosevelt's plan undermined the benefits to Congress of delegation, because it would weaken Congress's influence over agency decisions while expanding the President's authority over what was essentially lawmaking.

Brownlow's report landed before Congress at the same time as FDR's court-packing plan. While the two plans addressed different problems, they both fed fears of presidential aggrandizement at the expense of the other branches. Key congressional leaders had not been consulted or briefed on the reorganization plan, which they proceeded to attack as another step toward despotism, or a power grab by the university intellectuals who no doubt would run the new agencies, all at a time when totalitarianism was raising its ugly head in Europe. In 1938, the bill failed in the House and was replaced by a more modest bill that gave FDR a limited ability to reorganize government.
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Under that authority, FDR still managed to locate the Bureau of the Budget within a new Executive Office of the President. As the Office of Management and Budget, it today exercises central review over the economic costs and benefits of all federal regulation, one of the President's most powerful tools for rationalizing the activities of the administrative state.
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FDR also expanded the resources within the White House, an institution now separate from the Executive Office of the President, which enabled him to gain more information and control over the cabinet agencies. Still, the independent agencies remained outside the cabinet departments. FDR never successfully established any single entity to coordinate the activities of the entire administrative state, and his failed bill demonstrates the enduring constitutional checks on the Presidency. Only Congress could pass the laws needed to reorganize the cabinet departments, reshape the jurisdiction and structure of the independent agencies, and provide the funds and positions in a new, revitalized White House.
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While FDR suffered defeats at the hands of Congress, he continued to claim and exercise inherent executive authority that went beyond mere control of personnel. He signed statements to object to riders inserted into needed spending bills, which he believed to be unconstitutional. Congress, for example, attempted to force the President to fire three bureaucrats it believed were "subversives" by specifically barring any federal funds to pay their salaries. Roosevelt signed the bill but objected to its unconstitutional end run around the President's power over the removal of executive branch officials. Ultimately, the officials left within months, but they sued for their back pay all the way to the Supreme Court, which agreed that Congress had violated the Constitution.
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President Roosevelt also followed Lincoln's example in using his executive power to fight racial discrimination. Although Lincoln had relied on his power as Commander-in-Chief to free the slaves, the Southern states imposed racial segregation in the years after the Civil War, ultimately with the approval of the Supreme Court.
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While FDR did not take segregation head on, he issued an executive order in 1941 to prohibit racial discrimination in employment on federal defense contracts.
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Roosevelt had no statutory authority to order the federal government to provide fair treatment in employment to all, regardless of race. He could rely only upon his constitutional authority as President to oversee the management of federal programs. Once war began, President Roosevelt could clarify that his orders were taken under his power as both Chief Executive and Commander-in-Chief in wartime.
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FDR's orders would not be the first, nor the last, time that the cause of racial equality would depend on a broad understanding of presidential power.

The New Deal depended upon broad theories of the Presidency and the role of the federal government in national life. What remains less clear is whether FDR's fundamental reorientation of the government into a positive, active instrument of national policy was worthwhile. Contemporary critics of the modern Presidency question whether Chief Executives, acting alone, have led the nation into disastrous wars. We need also ask, but rarely do, whether the expansion of executive power at home has benefited the nation. To the extent we debate the desirability of the administrative state, most American scholars today bemoan the fact that the New Deal did not go far enough. They argue that the New Deal failed because it did not achieve a full-fledged European welfare state, or that FDR's coalition fragmented and failed to follow through on the promise of liberal reform.
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These critics, who usually are those most likely to criticize the President in foreign affairs, cry out for more executive power domestically.

Vesting the President with more authority to control the government's regulation of the economy may make sense during an emergency, but it did not work in solving the Great Depression. Economists recognize today that the New Deal neither put an end to high rates of unemployment nor restored consistent economic growth. FDR's monetary and fiscal policy often pursued the opposite of what was needed, and full employment would return only with American rearmament in the first years of World War II. Other New Deal policies were counterproductive, such as allowing industry to set production quotas, reduce production to raise prices, and restrict employment by raising minimum wages. Economists similarly doubt whether the creation of national regulation of the securities markets and other industries contributed to the eventual economic recovery, even though it was certainly valuable for postwar prosperity. If, as Milton Friedman argues, the Great Depression would have proven to be only a normal recession with some deft monetary policy from the Federal Reserve, it bears asking whether the permanent bureaucracy was needed at all.

Decades later, American Presidents would campaign against the excessive regulation set in place by the New Deal. The administrative state we have today failed to end the Great Depression. Was the administrative state worth the price? There is little doubt that the explosion in the size and power of the administrative state has transformed the nature of American politics.

The federal government has dramatically expanded the scope of regulation to include not just national economic activity, such as workplace conditions and minimum wages and hours, but also the environment and endangered species, educational standards, state and local corruption, consumer product safety, communications technology and ownership, illegal narcotics and gun crimes, and corporate governance. It has produced less deliberation in Congress, which now delegates sweeping powers to the agencies, and has placed the initial authority to issue federal law affecting private individuals in administrative agencies. Those agencies are not directly accountable to the people through elections, except for the thin layer of presidential appointees at the very top. Special-interest groups have come to play a significant role in influencing both congressional committees and agencies, gaining economic "rents" for their members at the expense of the broader public.

This is not a plea to return to the laissez-faire capitalism of the 19th-century variety. The administrative state no doubt has produced social benefits, and there are important areas where the greater information and expertise held by the executive agencies improves government policy, but it remains an open question whether the centralization of economic and social regulation in the national government has been, on balance, a success. It is undeniable that the requirement of minimum national standards, most especially in the area of civil rights, was a necessary and long-overdue change. Equality under law should not have been a matter of legislative or executive discretion, but a requirement of the Reconstruction Amendments to the Constitution. National control of other economic and social issues, however, may not have been worth the cost in increased government spending, larger budget deficits, a permanent government apparatus of unprecedented size (at least in the American experience), the rise of interest-group politics, and interference with efficient market mechanisms.