Can Trump fire Powell? The attitude of the Supreme Court is very important in the United States!

Notice that as speculation about whether President-elect Donald Trump may try to dismiss Federal Reserve Chairman Jerome Powell continues to escalate, Powell insists that US law protects him and other Fed governors from being fired before the end of their terms. He is correct, but the precedent protecting Powell and dozens of other federal agency heads from being fired at the president's will has come under attack by critics who argue that this 90-year-old decision is not applicable to modern executive states. These skeptics include Republican-appointed federal appellate judges who earlier this year urged the Supreme Court to reconsider the president's power to dismiss agency heads. These critics argue that today's federal agencies are much stronger than the Federal Trade Commission during the New Deal era in 1935, which was the core of the Supreme Court's decision in the case of Humphrey's Executor v. United States. The Humphrey's Executor case held that Congress's establishment of provisions in the Federal Trade Commission Act protecting FTC commissioners from being dismissed without cause did not violate the constitutional doctrine of separation of powers. This decision carved out an exception to the president's constitutional power to dismiss, stating that heads of independent, bipartisan, multi-member agencies "neither perform political duties nor administrative functions." Critics, including Supreme Court Justice Clarence Thomas, have argued that officials responsible for today's federal agencies are engaged in administrative functions, and therefore are not protected by the reasoning in Humphrey's Executor. So far, the Supreme Court has refused to overturn the old precedent. Last month, the Justices had a prime opportunity to question the constitutionality of the US Consumer Product Safety Commission in a case. The regulations establishing consumer safety organizations, like those establishing many other federal agencies, prohibit commissioners from being dismissed without cause. Challengers, including former Trump White House advisor Mick Mulvaney, have urged judges to restore the president's power under the US Constitution to dismiss agency heads at will. Their plea has received support from the US Chamber of Commerce, several Republican state attorneys general, and a long list of conservative non-profit organizations. However, in October, the Supreme Court rejected this request, temporarily preserving the precedent. The Federal Reserve has long been considered an agency protected by the 1935 precedent, which may be why Powell, who holds a law degree from Georgetown University, stated last week that his dismissal or that of other Fed governors is "legally impermissible." Nevertheless, there are ample reasons to doubt the viability of the Humphrey's Executor precedent moving forward. First, it is unclear why the Supreme Court rejected the case of the Consumer Product Safety Commission last month. The US Department of Justice in its brief opposing Supreme Court review argued that the groups challenging the structure of the consumer safety organization lacked standing, as they were not harmed by the commission's actions. The challengers were two research groups that sued over fees required by the Freedom of Information Act. In other words, the Supreme Court may simply be waiting for a better vehicle to reconsider whether the Humphrey's Executor precedent remains good law. If so, the Court has already received another petition challenging the viability of the precedent - a case brought by a company under investigation by the Consumer Product Safety Commission, which would not raise the same constitutional standing issues as the case rejected last month. In other words, when any hypothetical dispute between Powell and a future Trump administration reaches the Supreme Court, the precedent may cast a shadow over its own shadow. On the other hand, as Harvard Law professor and former Federal Reserve Board member Daniel Tarullo wrote earlier this year in a legal commentary, the Supreme Court may be cautious in issuing a ruling that could cause significant harm to the US economy. Tarullo hypothesized in his paper "The Federal Reserve and the Constitution" that the Justices would seek to find a way to distinguish Fed governors from other federal agency heads, possibly by reviewing the ancestors of the Fed during the first and second bank eras in the US, or by citing the limited powers the Fed has over private actors. Considering the special role of the Fed in formulating monetary policy and stabilizing financial markets described by Justice Brett Kavanaugh, the Supreme Court may ultimately decide that the Fed is "too important to be disrupted." This description comes from Kavanaugh's dissent in a case challenging the Consumer Financial Protection Bureau when he served as a judge on the DC Circuit in 2018. If Trump were to actually dismiss Powell, there is another uncertainty: while the Federal Reserve Act stipulates that Fed governors should not be removed without cause, it does not explicitly state that the Fed Chairman cannot be demoted at the President's will. No President has ever tried to remove a Fed Chairman. Even Trump backed away from discussions about dismissing Powell in 2018. However, as Tarullo pointed out in his paper, this reluctance is mainly due to fear of political backlash, rather than a legal text. Therefore, under current law, theoretically, Trump's second term could give him greater cause to strip Powell of his chairmanship rather than remove him from the Fed Board. Of course, this entire discussion is hypothetical. Trump advisors have told CNN that the President-elect may allow Powell to serve until the end of his term in 2026. But speculation in The Wall Street Journal and The New York Times about a showdown between Trump and Powell highlights the uncertainty hanging over dozens of federal agencies and committees. If the Supreme Court were to undermine or overturn the Humphrey's Executor precedent, Powell would simply be one of hundreds of officials whose jobs would be subject to Trump's "executor."