Presidential power expanded as Supreme Court backs agency head firings, except at the Federal Reserve

The Supreme Court on Monday widened presidential control over independent federal agencies. The ruling backed President Donald Trump’s ability to dismiss agency leaders. The court made one major exception for the Federal Reserve. The justices also let a legal fight continue over a Fed governor’s job status.

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As part of that exception, the court allowed Fed governor Lisa Cook to remain in office. Cook is challenging the Republican president’s attempt to remove Cook. The effort is linked to allegations of mortgage fraud, which Cook has denied. The court voted 5-4 against removing Cook immediately.

Supreme Court ruling on presidential power over independent agencies

The broader decision said presidents can generally fire agency heads at will. This applies even when federal laws require cause for removal. The court said this freedom does not apply at the central bank. The Federal Reserve is treated differently because it sets interest rates.

Six conservative justices formed the majority on the main question. The nine-member court set aside a key limit on executive power. The ruling departed from the court’s unanimous decision in Humphreys Executor. That 91-year-old case had restricted when presidents may remove board members.

Supreme Court ruling impacts FTC and other independent agencies

The case before the court involved former Federal Trade Commission member Rebecca Slaughter. Trump fired Slaughter without giving a cause. A federal provision required a reason for such a dismissal. The court’s reasoning also covers other agencies with similar board protections.

The decision’s logic reaches the National Labour Relations Board and the Merit Systems Protection Board. It also extends to the Consumer Product Safety Commission. Trump has fired board members at those bodies as well. The ruling indicates those removals face fewer limits under the Constitution.

Federal Reserve exception in Supreme Court ruling on presidential power

In the Cook matter, five justices rejected the administration’s request for immediate removal. Chief Justice John Roberts and Justice Brett Kavanaugh joined the three liberal justices. Cook was nominated to the Fed’s Board of Governors by then-President Joe Biden, a Democrat. Cook remains in the job while the case proceeds.

With inputs from PTI