President Trump’s power over the Federal Reserve will be front and center at the Supreme Court next week.
The justices on Wednesday will hear arguments on whether Trump can fire Fed Governor Lisa Cook over accusations of mortgage fraud.
Looming over it all is the Justice Department’s criminal investigation into Jerome Powell, the Fed’s chair, which came into public view last weekend.
In his second term, Trump has looked to reshape independent agencies that have long enjoyed protections that prevent the president from firing those who lead them on a whim.
Trump argues it infringes on his constitutional authority to oversee the executive branch, part of an expansive view of presidential power known as the unitary executive theory.
“Once Trump controls a majority of the Fed, he can use the Fed’s vast powers to enrich himself personally – to reward his billionaire friends and to punish his enemies,” Sen. Elizabeth Warren (D-Mass.), a critic of Powell’s who has defended him against Trump’s firing threats, told reporters. “That has been his strategy across the government.”
The Federal Reserve Act of 1913 prevents the president from firing the central bank’s governors except “for cause.” The law does not, however, explicitly define what “cause” means.
I wouldn’t say it’s impossible. But he’s sort of playing with pissing on the third rail here. And actually threatening the assets of many of the wealthy. The truly wealthy will hardly miss a beat as the rest of us starve and die. They live somewhere else and won’t have to wade through our bodies. But plenty of those too comfortable to pay attention are finally getting anxious at these movements.