Daijiworld Media Network - Washington

Washington, Jun 30: The US Supreme Court on Monday significantly expanded presidential authority by ruling that presidents can remove leaders of independent federal agencies without needing to show a specific cause, while making an exception for the Federal Reserve.

The court allowed Federal Reserve Governor Lisa Cook to remain in her position as she challenges President Donald Trump’s attempt to remove her over allegations of mortgage fraud, which she has denied.

In a major 6-3 decision, the court ruled that outside the Federal Reserve, presidents have broad authority to dismiss heads of independent agencies despite federal laws that previously limited such removals. The decision overturned a 91-year-old precedent, the 1935 ruling in Humphrey’s Executor, which had restricted presidential power to fire members of certain federal boards to protect agency independence.

Chief Justice John Roberts, writing for the majority, said protections preventing presidents from removing certain agency officials were inconsistent with the separation of powers under the US Constitution.

The ruling came in the case of former Federal Trade Commission member Rebecca Slaughter, who was removed by Trump without citing a specific reason despite federal law requiring cause for dismissal.

The decision could affect other independent agencies, including the National Labor Relations Board, Merit Systems Protection Board and Consumer Product Safety Commission, where Trump has also removed officials.

Trump welcomed the ruling, calling it a historic decision that strengthened presidential powers. In a post on Truth Social, he said it was an honour to be the president involved in such an “important” ruling.

The court had earlier allowed Trump’s removal of Slaughter and other agency officials while legal challenges continued, signalling support for the administration’s position.

Fed exception in Lisa Cook case

In Cook’s case, however, the court ruled 5-4 that the Trump administration could not immediately remove her from the Federal Reserve Board.

Chief Justice Roberts, Justice Brett Kavanaugh and the court’s three liberal justices formed the majority.

Roberts said removing Cook immediately would allow the president to dismiss a Federal Reserve governor at any time and for any reason, effectively weakening the protections designed to maintain the central bank’s independence.

Cook, who was nominated to the Federal Reserve Board by former President Joe Biden, will remain in office while her legal challenge continues.

However, Roberts noted that Trump could attempt another removal effort if proper procedures, including notice and an opportunity to respond, are followed.

Trump indicated he may pursue further action, saying he would ensure that anyone accused of wrongdoing would not continue making important decisions affecting the country.

Cook rejected the allegations and said the effort to remove her was not about mortgage documents but an attempt to remove her because she refused to bow to political pressure.

She said her decisions as a Federal Reserve governor were based only on what would best serve the American people.

Trump’s clash with Federal Reserve

The case comes amid Trump’s long-running criticism of the Federal Reserve’s interest rate policies. Trump has pushed for lower interest rates, arguing that they would reduce borrowing costs for Americans and help the economy.

The Federal Reserve has kept rates unchanged this year amid concerns over continued inflation, while some policymakers have suggested rates could remain high or even rise.

The Trump administration had also escalated pressure on Federal Reserve Chair Jerome Powell, including a Justice Department investigation and subpoenas, though the investigation later ended.

The allegations against Cook involve claims that she listed two properties in Michigan and Georgia as primary residences in 2021 before joining the Federal Reserve, which could have resulted in favourable mortgage terms.

Solicitor General D John Sauer argued that the claims showed serious negligence and provided grounds for dismissal.

Cook has denied any wrongdoing and has not been charged with any crime.

The Supreme Court’s decision is expected to have a major impact on the balance of power between the US presidency and independent federal agencies, with legal experts watching its implications for regulatory bodies and financial policy.