Lisa Cook has escaped the Fed for the time being
The US Supreme Court on Monday upheld President Donald Trump’s authority to fire the heads of most independent federal agencies, with a key exception for the Federal Reserve.
This landmark ruling, which significantly expands presidential powers, is seen as one of the most significant decisions on executive power in decades.The court allowed Federal Reserve Governor Lisa Cook to remain in office while she challenges Trump’s attempt to fire her over mortgage fraud allegations, which she denied. However, the ruling effectively gives presidents broad power to fire the leaders of most independent federal agencies, overturning decades of legal precedent that limited executive power.Supreme Court overturns decades-old precedentIn a decision upheld by the court’s six conservative justices, the nine-member court overturned its 91-year-old rule in Humphrey’s Enforcement, which restricted the president’s ability to remove members of independent agencies without cause.“We hold that such impeachment protections are inconsistent with the Constitution’s separation of powers,” Chief Justice John Roberts wrote for the majority.This ruling came in the case of Rebecca Slaughter, a former member of the Federal Trade Commission, who was fired by Trump even though federal law requires good cause for such removals.
The decision is expected to affect several independent agencies, including the National Labor Relations Board, the Merit Systems Protection Board, and the Consumer Product Safety Commission, where Trump also fired officials, the Associated Press reported.Trump welcomed the ruling in a post on the Truth Social website, writing: “It is a great honor to be the sitting president who won this historic and unprecedented ruling, one of the most important rulings ever regarding presidential powers.”The Fed remains protectedIn a separate ruling by a vote of 5 to 4, the Supreme Court refused to immediately remove Federal Reserve Governor Lisa Cook from her position while the legal challenge continues, the Associated Press reported.Chief Justice Roberts, joined by Justice Brett Kavanaugh and the court’s three liberal justices, said allowing Cook’s dismissal would effectively eliminate legal protections for Fed governors.“The President would be permitted to remove a member of the Federal Reserve at any time and for any reason, without any prior notice, and without any subsequent judicial examination.
“This would turn protection for cause into little more than at-will employment,” Roberts wrote.Cook, who was appointed to the Federal Reserve Board by former President Joe Biden, will remain in his post while the case continues before the courts.Justice Sonia Sotomayor, who filed a dissent from the bench, warned that the ruling could have far-reaching consequences for American democracy.“The president is certainly going to come out stronger than ever.
Sotomayor said that this power was given to him by six justices on this court, not by the people or the Constitution. She added that the decision could lead to “submission, instability, and even repression.”The confrontation between Trump and the Federal Reserve intensifiesThe issue involving Cook has received significant attention due to Trump’s repeated criticism of the Federal Reserve and its interest rate policies.Trump also threatened to fire former Federal Reserve Chairman Jerome Powell after his term ended in May, though Powell remained on the Fed’s Board of Governors while Kevin Warsh took over as chairman.Critics argued that Trump’s efforts to fire Cook were aimed at gaining greater influence over US monetary policy. If Trump succeeds, he could appoint a replacement and secure a majority on the Fed’s board.Cook rejected allegations that her dismissal was related to discrepancies in mortgage paperwork.“It was an attempt to impeach me on a manufactured pretext because I refused to yield to political pressure and continued to set interest rates based on what best served the American people.
“This is the core commitment of the Fed Governor,” she said in a statement.The case against Cook stems from allegations that she listed properties in Michigan and Georgia as “principal residences” on mortgage applications filed in 2021, before she joined the Federal Reserve.US Attorney Dr. John Sawyer said the requests reflected “gross negligence at best” and justified Trump’s decision to fire her. Cook has denied any wrongdoing and has not been charged with any crime.
