When the Schechter Poultry Corporation was punished for violating this code, they filed a lawsuit challenging the constitutionality of the President's power to enact such codes. In the Supreme Court case of Schechter Poultry Corp. v. U.S. 295 U.S. 495 (1935), the Court ruled unanimously (9-0) that this was indeed unconstitutional for two reasons--it was an unconstitutional delegation of congressional power to the President, and it was not within the congressional power for regulating commerce among the several states. This effectively halted Roosevelt's attempt to enact his New Deal policies through executive orders. A few years later, the Court broadened its interpretation of the Congress's commerce power, which allowed much of the New Deal to go forward, but the Court never reversed its declaration that the Congress cannot delegate its constitutional powers to the President. As recently as 2011, the Supreme Court cited Schechter as a precedent in Bond v. U.S.
That's bad news for Donald Trump and those who support his Declaration of National Emergency as authorizing him to fund his Wall, because the Schechter decision can be cited in any Supreme Court case as condemning this action as unconstitutional. (Damon Root has written about this at the Reason magazine website.) The Court might quote the following passage from Charles Evans Hughes's opinion in Schechter:
"We are told that the provision of the statute authorizing the adoption of codes must be viewed in the light of the grave national crisis with which Congress was confronted. Undoubtedly, the conditions to which power is addressed are always to be considered when the exercise of power is challenged. Extraordinary conditions may call for extraordinary remedies. But the argument necessarily stops short of an attempt to justify action which like outside the sphere of constitutional authority. Extraordinary conditions do not create or enlarge constitutional power. The Constitution established a national government with powers deemed to be adequate, as they have proved to be both in war and peace, but these powers of the national government are limited by the constitutional grants. Those who act under these grants are not at liberty to transcend the imposed limits because they believe that more or different power is necessary. Such assertions of extraconstitutional authority were anticipated and precluded by the explicit terms of the Tenth Amendment. 'The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.'" (295 U.S. 495, 528-529)Hughes went on to declare: "The Congress is not permitted to abdicate or to transfer to others the essential legislative functions with which it is thus vested."
The Constitution is very clear that the appropriation of money is a congressional power: "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law" (Article I, Section 9). The President cannot constitutionally appropriate money for building a Wall on the southern border without congressional authorization. The fact that Trump resorted to his Declaration of National Emergency after the Congress had refused to appropriate the money he requested makes his unconstitutional usurpation of congressional power especially evident.
Now, of course, Trump and his supporters will argue that Congress has given him the power to do this under the National Emergencies Act of 1976. But that only shows that the National Emergencies Act is itself unconstitutional insofar as it delegates congressional power to the President, just as was the case with the NIRA in the Schechter case.
When the Justices in the Schechter case were writing their opinions in 1935, they were doing this in the shadow of Adolf Hitler, who had claimed emergency powers in Nazi Germany since 1933. The Reichstag Fire of 1933 was used as a pretext to suspend the Weimar Constitution and introduce a state of emergency for four years. Legislative power was given to Hitler, so that his government could enact laws without a vote in Parliament. This was all justified by the Fuhrerprinzip ("Fuhrer Principle")--the idea that during a national emergency, there must be a national leader who can rule by executive decree without being bound by law. Hitler and his supporters also argued that anyone not considered part of the Volksgemeinschaft ("National Community of the People") was outside the law and thus not protected by it. Sound familiar?
The "Fuhrer Principle" was embraced by the American Progressives, who thought that only the President acting by executive decree could provide the "leadership" necessary for meeting national emergencies. Woodrow Wilson was the first president to invoke this principle in declaring a national emergency. So Trump's declaration and his reliance on rule by executive decree shows that he belongs to the Progressive tradition that has created the Presidential Administrative State as a way of overturning the constitutional system of checks and balances.
Remarkably, while Nancy Pelosi and other Democratic leaders in Congress have denounced Trump's declaration as unconstitutional, they have refused to recommend the revocation of the National Emergencies Act as an unconstitutional law. Instead, acting pursuant to section 202 of that Act, they have proposed a congressional resolution to terminate Trump's declaration.
We can hope that the Supreme Court will invoke the reasoning of the Schechter decision in striking down Trump's "Fuhrer Principle" and the National Emergencies Act as unconstitutional.
Writing in The Atlantic, Elizabeth Goitein has written a good article on "The Alarming Scope of the President's Emergency Powers."