So much for juggling the Federal Reserve board. For now, anyway.
Donald Trump has taken aim at the Fed ever since returning to office in January. He has tried to push Fed chair Jerome Powell into resigning, to no avail, even humiliating Powell over renovation costs in August. Trump then tried to fire Lisa Cook over mortgage irregularities, claiming that those amount to just cause, enabling presidential authority under the statute. Cook sued to prevent her removal, and lower courts have ruled against Trump, who then appealed to the Supreme Court for relief.
That has worked in the past, as the Supreme Court has allowed Trump to terminate others pending the resolution of the appeals. It didn't work today, however:
The Supreme Court on Wednesday allowed Federal Reserve Governor Lisa Cook to keep her job for now and scheduled arguments in January to weigh President Trump’s bid to fire her.
The court in a brief order deferred a decision on the Trump administration’s emergency request to remove Cook from the central bank’s independent board while a lawsuit challenging her firing proceeds.
The justices on several occasions have allowed Trump to fire officials at other government agencies, but they also have signaled they believe the Fed is unique and enjoys more protections from presidential intervention. By placing the case on its argument calendar, the court buys itself more time to consider the issue.
Actually, this sends a couple of messages. First, the court deferred a stay on lower-court orders to retain Cook rather than issue the stay. That's a weaker response than an outright denial, but it still indicates that the court does not find it likely that Trump will prevail, and/or that he will suffer irreparable harm to his authority in the meantime. That's the opposite of what the court has found in other Humphrey's Executor-type cases, where they gave Trump stays that allowed him to terminate other appointees. Second, they didn't add this as an emergency or urgent case to the calendar, choosing to wait until January to hear arguments on the case.
Neither of these signals a good sign that the court will be sympathetic to Trump in the case of Cook and presidential authority over the Federal Reserve. In fact, it indicates that the Supreme Court was serious in warning the Trump administration that their skepticism of the Humphrey's Executor precedent explicitly did not extend to the Federal Reserve's Board of Governors. In their 6-3 ruling in May for a stay in Trump v Wilcox, the unsigned majority made that very clear indeed:
Finally, respondents Gwynne Wilcox and Cathy Harris contend that arguments in this case necessarily implicate the constitutionality of for-cause removal protections for members of the Federal Reserve’s Board of Governors or other members of the Federal Open Market Committee. See Response of Wilcox in Opposition to App. for Stay 2−3, 27−28; Response of Harris in Opposition to App. for Stay 3, 5−6, 16−17, 36, 40. We disagree. The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States.
It's still true that the statute controlling the Fed allows a president to terminate a governor for cause, and that "cause" is not particularly well defined in the statute. That may matter when it comes to arguing the case later. However, this rejected stay request indicates that the court meant what it wrote when it declared the Fed a much different case where presidential authority is concerned than in other "independent" agencies, such as the NLRB and the CFPB. That may be because the latter agencies exercise authority mainly within the executive sphere, especially where regulation and enforcement take place. The Fed -- as I have long observed -- mainly manages monetary policy rather than enforces regulations, and monetary policy is the responsibility of Congress under Article I.
That still doesn't address the issue of cause, but it seems pretty clear that the court is skeptical of the cause presented in the case of Cook. Trump can still prevail at argument, of course, but if the court believed that Cook's mortgage irregularities presented legal and/or ethical obstacles for her work at the Fed, there would have been five justices ready to sign onto a stay. It looks like an uphill battle at best on both fronts for Trump and his team in January -- again, not an impossible task, but the Solicitor General et al will have their work cut out for them.
Editor’s Note: The Schumer Shutdown is here. Rather than put the American people first, Chuck Schumer and the radical Democrats forced a government shutdown for healthcare for illegals. They own this.
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