It is outrageous for a president to threaten criminal charges against the Federal Reserve chair — or anyone — just to get them to do his bidding. Although the administration’s action against Jerome Powell over his testimony to Congress about renovation of Federal Reserve buildings might be disturbing and wrong — at least if the potential charges prove baseless or trivial — they’re at least a little bit understandable.
That’s because Congress has wrongfully tied the president’s hands with respect to removing members of the Federal Reserve Board of Governors. A federal statute says that the president can remove a Fed Governor only “for cause.” And Fed Governors apparently believe that there are very few “causes” that could justify their removal.
In August, Trump announced that he was firing Fed Governor Lisa Cook for allegedly lying on a mortgage application shortly before President Joe Biden appointed her in 2022. Cook sued, arguing that, even if the charge was true (which she denies), it couldn’t justify removing her because “cause” supposedly includes only “inefficiency, neglect or malfeasance” in her job performance — not anything she did before taking office.
Cook has even argued to the Supreme Court, which heard oral argument in her case on January 21 and may soon issue a decision, that she couldn’t be removed even if it were found that she’d bribed a senator to obtain her confirmation, or that she’d committed murder before taking office.
This might explain why Trump, who’s made no secret of his displeasure with Powell, might have gone looking for criminal charges against Powell based on something Powell had done while in office.
The president shouldn’t have to go to such unseemly lengths to remove someone in the executive branch of government whom he doesn’t want to work with.
One problem is that the definition of “cause” that Lisa Cook has argued for is too narrow, as a matter of law and a matter of common sense. A more fundamental problem is that Congress shouldn’t be allowed to impose a “cause” requirement at all.
Article II of the Constitution vests all of the federal government’s executive power in the president. That means he can’t be forced to share that power with someone he doesn’t want to share it with. If he thinks someone is untrustworthy, doing a bad job, or just not someone he can work with, he must be allowed to remove them at will.
And Federal Reserve Governors do exercise executive power. They don’t just set interest rates and control the money supply. They make and enforce regulations and impose fines, the same as other federal agencies do.
If Congress doesn’t want the president to remove Fed Governors, then it should at least strip them of their regulatory and law-enforcement powers and place those responsibilities in another agency. Then the Fed could just handle money, which would at least complicate the argument about the president’s removal authority.
Meantime, as the Supreme Court is considering Lisa Cook’s case, it is also considering Trump v. Slaughter, a case about whether the president can fire Federal Trade Commission members and the heads of other “independent” agencies without cause, based on his authority under Article II. Many think the court will rule in Trump’s favor in that case, as it should. And it should recognize in Cook’s case that his firing authority extends to Federal Reserve governors, too.
That would help restore the structure of government and the Separation of Powers established by the Constitution, and should put an end to any questionable attempts to find criminal charges, too.
