The Supreme Court dramatically expanded the president’s powers, upholding President Donald Trump’s removal of the heads of independent federal agencies with one important exception: the Federal Reserve.
Judges have allowed Fed Director Lisa Cook to remain in her job while she fights the Republican president’s bid to fire her over allegations of mortgage fraud, which she denies.
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But aside from the nation’s central bank, which sets interest rates, the court held that the president has free rein to fire the fire chief, despite federal law requiring grounds for such firing and a 1991 ruling that limited the executive branch’s authority.
With a majority of six conservative justices, the nine-judge court reversed the unanimous decision of Executive Humphrey, a 1935 decision that limited when presidents could fire agency directors. This was also to ensure decision-making was free from political influence.
“We hold that such protection from exclusion violates the constitutional separation of powers,” Chief Justice John Roberts wrote to the court.
Supports President Trump’s position
The justices ruled in the case of former Federal Trade Commission Commissioner Rebecca Slaughter, who President Trump fired without cause, even though federal law requires one. The logic of this decision extends to other agencies, including the National Labor Relations Board, the Merit System Protection Board, and the Consumer Product Safety Commission, whose directors Trump has also fired.
Trump expressed his support in a post on Truth Social. “It is a great honor to be the sitting president who won this historic and unprecedented ruling, one of the most significant presidential powers ever granted,” he wrote.
“To demonstrate the importance of this massacre, 90 years of precedent has been completely and unequivocally overturned, and presidential power has been significantly strengthened at a time when it is needed most!”
The court had already backed the Trump administration’s position over liberal opposition by allowing Slaughter and other agency executives to be fired despite ongoing legal challenges.
No president before Trump had sought to wrest control of the agencies that regulate such broad areas of American life as nuclear energy, product safety and labor relations. But in arguments in Slaughter’s case in December, six conservatives, including three appointed by Mr. Trump, appeared more concerned about passing a tenable sentence than giving Mr. Trump too much power.
Their rhetoric was reminiscent of the 2024 presidential immunity lawsuit that allowed Trump to avoid prosecution in his efforts to reverse his 2020 presidential election loss to Democrat Joe Biden. Justice Neil Gorsuch said at the time that the court was writing a decision “for the ages.”
Justice Sonia Sotomayor, in a vocal dissent in the court, said the ruling could lead to “subordination, instability, and even oppression.”
“Certainly, the president emerges with more power than ever before, and that power was given to him not by the people or the Constitution, but by the six justices of this court,” Sotomayor said.
The case of Fed Governor Cook
In Cook’s case, the court, by a 5-4 vote, rejected the Trump administration’s efforts to immediately remove Cook from office. Roberts, Justice Brett Kavanaugh and three liberal justices were in the majority.
Roberts wrote that allowing Cook to be fired now would allow the president to fire any member of the Federal Reserve Board at any time, for any reason, without prior notice or after-the-fact judicial check, and the protection of cause would become little more than at-will employment.
Roberts added a footnote to her opinion, noting that there is nothing to prevent Trump from “trying again” to remove her from office, given proper notice and opportunity to challenge.
President Trump has signaled that he intends to accept Roberts’ offer, telling Truth Social that he will “immediately take appropriate steps to ensure that the person who committed the wrongdoing does not make important decisions regarding the welfare of the United States of America.”
The court said Cook, who was nominated by Biden to lead the Fed, can remain in the post at least as long as the lawsuit challenging his removal continues.
The Trump administration is appealing the lower court ruling in its favor.
In addition to trying to fire Cook, President Trump had threatened to fire former Fed Chairman Jerome Powell if he did not resign from the board when his term as chairman expires in mid-May. Powell remained governor after replacing Kevin Warsh as chairman.
Lower court judges allowed Cook to remain in his post as one of seven central bank governors.
Trump’s critics say the real motivation for firing Cook is the Republican president’s desire to control U.S. interest rate policy. If President Trump succeeds in firing Cook, the first Black woman to serve on the Fed’s board, he could replace her with someone he appoints and gain a majority on the board. The case has been closely watched by Wall Street investors and could have far-reaching implications for financial markets and the U.S. economy.
Cook said her lawsuit was “in no way about mortgage documents that I signed years before I became president of the Federal Reserve.”
“This was an attempt to remove me from office on a trumped-up basis because I refused to bow to political pressure and continued to set interest rates based solely on what was best for the American people, which is the most fundamental duty of a Federal Reserve president,” Cook said in a statement.
