The Supreme Court just revealed one thing it actually fears about Trump
On Thursday evening, the Supreme Court handed down a brief order, which temporarily permits President Donald Trump to fire two federal officials who, by law, are shielded from being summarily terminated. That, in itself, is not particularly significant because, on April 9, Chief Justice John Roberts acted on his own authority to temporarily permit Trump to fire the same two officials. So the practical effect of Thursday’s order in Trump v. Wilcox is simply to maintain the status quo.That said, the Thursday order does contain some important new information from the Court’s Republican majority. While the Republican justices have signaled for quite some time that they are eager to give the president broad authority to fire officials that Congress intended to insulate from presidential control, the order includes a paragraph signaling that they will not allow Trump to fire members of the Federal Reserve.From a legal perspective, the paragraph is difficult to parse. And, as Justice Elena Kagan writes in a dissenting opinion, is not supported by the legal authority it cites. But it is likely to reassure investors that, while the Supreme Court does appear eager to expand Trump’s authority over previously independent parts of the federal government, it won’t permit him to disrupt the Fed’s ability to make technocratic decisions about interest rates. The immediate stakes in Wilcox involve a former member of the National Labor Relations Board, which enforces labor laws and adjudicates union-related disputes, along with a former member of the Merit Systems Protection Board, which hears disputes claiming that a civil servant’s employment protections were violated. Trump fired both shortly after taking office, despite the fact that federal law only permits them to be fired for some sort of neglect or malfeasance.The NLRB and the MSPB, moreover, are just two of an array of “independent” agencies led by multi-member boards, whose members all enjoy similar employment protections – agencies such as the Federal Trade Commission, the Federal Communications Commission, and the Federal Reserve.For at least 15 years, when the Court handed down Free Enterprise Fund v. Public Company Accounting Board, a majority of the justices have signaled that they are eager to strip Congress of its authority to create such independent agencies, and give the president full authority to fire these agencies’ leaders at will. Many economists and investors, meanwhile, have warned that it would be particularly dangerous to strip the Federal Reserve — which is supposed to set interest rates based on delicate economic calculations and not based on what will benefit the sitting president — of its independence, as doing so could throw the US economy into chaos.Thursday’s order is a clear signal that the Court has heard these concerns and does not intend to eliminate the Fed’s independence. It is unlikely to satisfy many constitutional scholars, as its explanation for why Federal Reserve leaders should be treated differently than the leaders of any other independent agency is so baffling that it appears contrived. Regardless of the underlying reasoning, however, the order does strongly suggest that this Court will not give Trump full control over the Fed.The “unitary executive,” briefly explainedTrump v. Wilcox is the culmination of a longstanding grudge many Republican legal elites hold against Humphrey’s Executor v. United States, the Supreme Court case establishing that Congress may create independent agencies whose members may only be fired for cause. Though the leaders of these agencies are typically nominated by the president for a term of several years, and confirmed by the Senate, Humphrey’s Executor explained that laws protecting them from being fired while in office are supposed to ensure that they “act with entire impartiality,” and “exercise the trained judgment of a body of experts.”All six of the Court’s Republicans, however, have made it clear they believe in a theory known as the “unitary executive,” which is incompatible with Humphrey’s Executor.The Constitution provides that “the executive power shall be vested in a President of the United States of America.” In a 1988 dissenting opinion, which many legal conservatives now treat as if it were a holy text, Justice Antonin Scalia argued that “this does not mean some of the executive power, but all of the executive power.” And thus, if a federal official is charged with executing federal laws in some way, they must be fully subject to presidential control.If you take this unitary executive theory seriously, then there should be no doubt that Federal Reserve governors may be fired at will by the president. The Fed’s authority over interest rates, after all, derives from federal statutes instructing it to pursue the dual goals of “maximum employment” and “stable prices.” So the Fed is charged with executing federal laws.But the consequences of stripping the Fed of its independence could be catastrophic. In 1971, President Richard Nixon pressured Fed chair Arthur Burns to lower interest rates in advance of Nixon’s reelection race — the idea was to juice the economy right while voters were weighing Nixon’s record — and Burns complied. In the short term, this worked out great for Nixon. The economy boomed in 1972, and Nixon won reelection by a historic landslide. But Burns’s action is often blamed for years of “stagflation,” slow economic growth combined with high inflation, in the 1970s.The Fed, in other words, has the power to effectively inject cocaine into the US economy – giving it a temporary boost that can be timed to benefit incumbent presidents, at the cost of much greater economic turmoil down the road. It’s not hard to see how presidents could abuse their power if they can fire members of the Federal Reserve who refuse to give the economy such a temporary and costly high.One might think that these risks would be enough to caution the justices against overruling Humphrey’s Executor. But the Republican justices appear quite committed to the unitary executive theory, and they have been that way for quite some time.And so those justices spend the bulk of Thursday’s Wilcox order laying out the process they are likely to use to formally overrule Humphrey’s Executor. The order announces that the Trump administration is “likely” to prevail in its bid to fire NLRB and MSPB officials, and it temporarily blocks lower court decisions that reinstated the two officials at issue in this case. But the Court puts off the question of whether to formally repudiate Humphrey’s Executor until after the ordinary appeals process plays out and the justices receive full briefing and oral argument on whether to do so — which could happen as soon as the Court’s next term.The Wilcox order’s language protecting the Fed is gobbledygookEmbedded within all this language laying out the process to challenge Humphrey’s Executor is the paragraph indicating that the Fed is safe. While the two fired officials “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,” the order states, “we disagree.”The justices who joined the order then offer a single sentence explaining why: “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 certainly possible to parse the components of this sentence. The description of the Fed as a “quasi-private entity,” for example, may refer to the fact that much of the Fed’s authority is wielded through regional entities, which are themselves controlled by board members who are mostly selected by commercial banks. But it is hardly unusual for members of the private sector to be given a formal role within government — just ask Elon Musk. Indeed, the Supreme Court heard at least two cases this spring involving the role experts from the private sector may play in setting government policy.The “First and Second Banks of the United States” are 18th- and early 19th-century predecessors to the Fed. The Supreme Court upheld Congress’s power to create national banks in McCulloch v. Maryland, but the nation abandoned national banking under President Andrew Jackson, setting off a period of economic turmoil, including an economic depression shortly after Jackson left office.But it’s unclear what any of this has to do with the president’s powers as outlined in the Constitution. If the theory of the unitary executive is correct, then no entity — regardless of whether it is “quasi-private” or is part of a “distinct historical tradition” involving banks — may execute federal laws, unless that entity is controlled by people who are themselves under presidential control. As a legal matter, the Court’s explanation of why the Fed is special is nothing more than word salad.The only legal authority that the Wilcox order cites to support its claim that the Fed is special is a footnote in its pro-unitary executive decision in Seila Law v. CFPB. But nothing in that footnote provides any support for this claim.As Kagan points out in her dissent in Wilcox, the only relevant language in that footnote is a throwaway line responding to her partial dissent in Seila Law. Kagan had argued that “federal regulators” historically have enjoyed some insulation from the president. The footnote dismisses this argument, stating that even “assuming financial institutions like the Second Bank and the Federal Reserve can claim a special historical status,” the agency at issue in Seila Law does not qualify.The Court, in other words, waved away Kagan’s argument that institutions like the Fed should be shielded from presidential control in Seila Law. Now, however, the justices in the majority appear to be signaling they believe there is some merit to Kagan’s argument.If the Court does formally overrule Humphrey’s Executor in the coming months, the justices in the majority will likely elaborate on why a different rule should apply to the Fed. The best reading of the Wilcox order’s one paragraph about the Fed is that a majority of the justices have already decided that they want to protect it, and they would now like some smart lawyers to file briefs coming up with an argument for that position — one that uses terms like “quasi-private” and that refers to the early history of national banking.Of course, this is not how the law is supposed to work — judges are not supposed to start with the outcome that they want and then invite members of the bar to explain how to get there. But this also will hardly be the first time that the Roberts Court started with its intended outcome and reasoned backward to get there. It’s just being more transparent this time around.See More:
#supreme #court #just #revealed #one
The Supreme Court just revealed one thing it actually fears about Trump
On Thursday evening, the Supreme Court handed down a brief order, which temporarily permits President Donald Trump to fire two federal officials who, by law, are shielded from being summarily terminated. That, in itself, is not particularly significant because, on April 9, Chief Justice John Roberts acted on his own authority to temporarily permit Trump to fire the same two officials. So the practical effect of Thursday’s order in Trump v. Wilcox is simply to maintain the status quo.That said, the Thursday order does contain some important new information from the Court’s Republican majority. While the Republican justices have signaled for quite some time that they are eager to give the president broad authority to fire officials that Congress intended to insulate from presidential control, the order includes a paragraph signaling that they will not allow Trump to fire members of the Federal Reserve.From a legal perspective, the paragraph is difficult to parse. And, as Justice Elena Kagan writes in a dissenting opinion, is not supported by the legal authority it cites. But it is likely to reassure investors that, while the Supreme Court does appear eager to expand Trump’s authority over previously independent parts of the federal government, it won’t permit him to disrupt the Fed’s ability to make technocratic decisions about interest rates. The immediate stakes in Wilcox involve a former member of the National Labor Relations Board, which enforces labor laws and adjudicates union-related disputes, along with a former member of the Merit Systems Protection Board, which hears disputes claiming that a civil servant’s employment protections were violated. Trump fired both shortly after taking office, despite the fact that federal law only permits them to be fired for some sort of neglect or malfeasance.The NLRB and the MSPB, moreover, are just two of an array of “independent” agencies led by multi-member boards, whose members all enjoy similar employment protections – agencies such as the Federal Trade Commission, the Federal Communications Commission, and the Federal Reserve.For at least 15 years, when the Court handed down Free Enterprise Fund v. Public Company Accounting Board, a majority of the justices have signaled that they are eager to strip Congress of its authority to create such independent agencies, and give the president full authority to fire these agencies’ leaders at will. Many economists and investors, meanwhile, have warned that it would be particularly dangerous to strip the Federal Reserve — which is supposed to set interest rates based on delicate economic calculations and not based on what will benefit the sitting president — of its independence, as doing so could throw the US economy into chaos.Thursday’s order is a clear signal that the Court has heard these concerns and does not intend to eliminate the Fed’s independence. It is unlikely to satisfy many constitutional scholars, as its explanation for why Federal Reserve leaders should be treated differently than the leaders of any other independent agency is so baffling that it appears contrived. Regardless of the underlying reasoning, however, the order does strongly suggest that this Court will not give Trump full control over the Fed.The “unitary executive,” briefly explainedTrump v. Wilcox is the culmination of a longstanding grudge many Republican legal elites hold against Humphrey’s Executor v. United States, the Supreme Court case establishing that Congress may create independent agencies whose members may only be fired for cause. Though the leaders of these agencies are typically nominated by the president for a term of several years, and confirmed by the Senate, Humphrey’s Executor explained that laws protecting them from being fired while in office are supposed to ensure that they “act with entire impartiality,” and “exercise the trained judgment of a body of experts.”All six of the Court’s Republicans, however, have made it clear they believe in a theory known as the “unitary executive,” which is incompatible with Humphrey’s Executor.The Constitution provides that “the executive power shall be vested in a President of the United States of America.” In a 1988 dissenting opinion, which many legal conservatives now treat as if it were a holy text, Justice Antonin Scalia argued that “this does not mean some of the executive power, but all of the executive power.” And thus, if a federal official is charged with executing federal laws in some way, they must be fully subject to presidential control.If you take this unitary executive theory seriously, then there should be no doubt that Federal Reserve governors may be fired at will by the president. The Fed’s authority over interest rates, after all, derives from federal statutes instructing it to pursue the dual goals of “maximum employment” and “stable prices.” So the Fed is charged with executing federal laws.But the consequences of stripping the Fed of its independence could be catastrophic. In 1971, President Richard Nixon pressured Fed chair Arthur Burns to lower interest rates in advance of Nixon’s reelection race — the idea was to juice the economy right while voters were weighing Nixon’s record — and Burns complied. In the short term, this worked out great for Nixon. The economy boomed in 1972, and Nixon won reelection by a historic landslide. But Burns’s action is often blamed for years of “stagflation,” slow economic growth combined with high inflation, in the 1970s.The Fed, in other words, has the power to effectively inject cocaine into the US economy – giving it a temporary boost that can be timed to benefit incumbent presidents, at the cost of much greater economic turmoil down the road. It’s not hard to see how presidents could abuse their power if they can fire members of the Federal Reserve who refuse to give the economy such a temporary and costly high.One might think that these risks would be enough to caution the justices against overruling Humphrey’s Executor. But the Republican justices appear quite committed to the unitary executive theory, and they have been that way for quite some time.And so those justices spend the bulk of Thursday’s Wilcox order laying out the process they are likely to use to formally overrule Humphrey’s Executor. The order announces that the Trump administration is “likely” to prevail in its bid to fire NLRB and MSPB officials, and it temporarily blocks lower court decisions that reinstated the two officials at issue in this case. But the Court puts off the question of whether to formally repudiate Humphrey’s Executor until after the ordinary appeals process plays out and the justices receive full briefing and oral argument on whether to do so — which could happen as soon as the Court’s next term.The Wilcox order’s language protecting the Fed is gobbledygookEmbedded within all this language laying out the process to challenge Humphrey’s Executor is the paragraph indicating that the Fed is safe. While the two fired officials “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,” the order states, “we disagree.”The justices who joined the order then offer a single sentence explaining why: “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 certainly possible to parse the components of this sentence. The description of the Fed as a “quasi-private entity,” for example, may refer to the fact that much of the Fed’s authority is wielded through regional entities, which are themselves controlled by board members who are mostly selected by commercial banks. But it is hardly unusual for members of the private sector to be given a formal role within government — just ask Elon Musk. Indeed, the Supreme Court heard at least two cases this spring involving the role experts from the private sector may play in setting government policy.The “First and Second Banks of the United States” are 18th- and early 19th-century predecessors to the Fed. The Supreme Court upheld Congress’s power to create national banks in McCulloch v. Maryland, but the nation abandoned national banking under President Andrew Jackson, setting off a period of economic turmoil, including an economic depression shortly after Jackson left office.But it’s unclear what any of this has to do with the president’s powers as outlined in the Constitution. If the theory of the unitary executive is correct, then no entity — regardless of whether it is “quasi-private” or is part of a “distinct historical tradition” involving banks — may execute federal laws, unless that entity is controlled by people who are themselves under presidential control. As a legal matter, the Court’s explanation of why the Fed is special is nothing more than word salad.The only legal authority that the Wilcox order cites to support its claim that the Fed is special is a footnote in its pro-unitary executive decision in Seila Law v. CFPB. But nothing in that footnote provides any support for this claim.As Kagan points out in her dissent in Wilcox, the only relevant language in that footnote is a throwaway line responding to her partial dissent in Seila Law. Kagan had argued that “federal regulators” historically have enjoyed some insulation from the president. The footnote dismisses this argument, stating that even “assuming financial institutions like the Second Bank and the Federal Reserve can claim a special historical status,” the agency at issue in Seila Law does not qualify.The Court, in other words, waved away Kagan’s argument that institutions like the Fed should be shielded from presidential control in Seila Law. Now, however, the justices in the majority appear to be signaling they believe there is some merit to Kagan’s argument.If the Court does formally overrule Humphrey’s Executor in the coming months, the justices in the majority will likely elaborate on why a different rule should apply to the Fed. The best reading of the Wilcox order’s one paragraph about the Fed is that a majority of the justices have already decided that they want to protect it, and they would now like some smart lawyers to file briefs coming up with an argument for that position — one that uses terms like “quasi-private” and that refers to the early history of national banking.Of course, this is not how the law is supposed to work — judges are not supposed to start with the outcome that they want and then invite members of the bar to explain how to get there. But this also will hardly be the first time that the Roberts Court started with its intended outcome and reasoned backward to get there. It’s just being more transparent this time around.See More:
#supreme #court #just #revealed #one
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