Is the Fed next? We don’t want to get ahead of our skis, but that’s a question now that the Supreme Court is weighing whether two federal agencies are crosswise of the Constitution. The Nine are being asked to decide whether to review a lower court ruling that Congress lacks the authority to delegate its power to the Securities and Exchange Commission. The case could rock the foundations of the bureaucracy that arose from the now aging New Deal.

Earlier, the court said it would consider the constitutionality of Senator Warren’s Consumer Financial Protection Bureau. Politico reports that if the CFPB falls, the FDIC fears that “could hinder” the FDIC’s own “rulemaking authority.” The Times says Medicare and Social Security could fall under the same scrutiny, setting a “dangerous precedent.” Why, the Gray Lady frets, it could even call into doubt the legitimacy of the Federal Reserve.

It’s about time, says the Sun. Sound money advocates have long questioned the constitutionality of the Federal Reserve. The parchment delegates to Congress 100 percent of the monetary powers of the federal government. What business does Congress have delegating those powers to the unelected governors of the Federal Reserve? The disputes follow the Nine’s ruling in June that the EPA exceeded its power by regulating carbon emissions.

The case of the SEC is a corker. The commission was one of the building blocks of FDR’s attempt to bring America’s economy under the thumb of the bureaucrats at the Columbia District. FDR startled liberals by putting the ex-bootlegger and financier Joseph P. Kennedy, denounced by the New Republic as a “speculator,” in charge of the new agency. It was, one New Deal lawyer groused, like “setting a wolf to guard a flock of sheep.” 

Since then, the SEC has sprouted into a regulatory behemoth with thousands of employees. Yet its supervisory ambitions ran afoul of the Fifth United States Appeals Circuit, whose riders looked askance at the SEC’s habit of setting up its own tribunals to judge violations of its regulations, instead of using the federal courts. Worse, the riders of the Fifth Circuit see the SEC wielding power that was “improperly delegated” by Congress.

So the SEC now finds itself in the position of pleading with the Supreme Court to overrule the Fifth Circuit riders and preserve intact its regulatory regime. The dispute raises echoes of the Schechter Brothers poultry case, in which a unanimous Supreme Court in 1935 eviscerated FDR’s National Recovery Administration. The Nine ruled that that agency was — bingo — an improper delegation of Congressional power.

The NRA, a sister agency of the SEC, had Soviet-style hopes to regulate prices and wages across America’s economy. The agency targeted the Schechter Brothers for, among other things, its rule preventing customers from picking their own individual chickens. No, the NRA said, chickens had to be purchased unseen, either by the coop or half-coop. The absurdity of it led to “laughter” among the Nine during oral arguments, historians record.

In striking down the NRA, Chief Justice Hughes observed that the NRA’s rules were “an unconstitutional delegation of legislative power.” He added that if such regulations were allowed to stand, “there would be virtually no limit to the federal power, and, for all practical purposes, we should have a completely centralized government.” This halted the worst excesses of the New Deal, yet it still left intact agencies like the SEC and the Federal Reserve.

After Schechter was decided, a page invited FDR’s aide, Thomas “Tommy the Cork” Corcoran, into the robing room, where Justice Louis Brandeis told him: “I want you to go back and tell the President that we’re not going to let this government centralize everything.” Schechter sparked FDR’s drive to “pack,” spooking the court for years. Yet today, with a majority of conservatives back on the bench, Schechter’s logic awaits the CFPB, the SEC — and, if the court is serious, the Fed.