William Galston asks the right question in his Wall Street Journal column:
Is it unconstitutional for Congress to make government agencies such as the Federal Reserve independent by restricting the president’s authority to fire their heads? The Trump administration is behaving as though that’s the case.
He relies for his argument that “independent agencies” are constitutional on Humphrey’s Executor v. United States which in 1934 found that Franklin Roosevelt had improperly fired William Humphrey as a member of the Federal Trade Commission, rejecting the finding in the 1926 Myers v. United States. FDR thought that the SCOTUS decision was motivated by spite against him on the part of the SCOTUS. In 2020 the Roberts court found that Humphrey’s was not binding precedent today because no agencies with the powers of the FTC in 1935 now exist.
So, is Humphrey’s Executor v. United States a relevant precedent for firings of officials appointed by the president today?
My own view is that barring presidents from firing officials they appointed is a constitutional absurdity. I don’t care whether the sitting president is FDR or Trump in that regard. I also think that “independent agencies” are similarly absurd but that’s a matter for another post.
Humphrey’s Executor is binding precedent whenever it involves a person named Humphrey, who happens to be dead. That’s how you distinguish a case without overturning it.
But seriously I don’t think the current SCOTUS is likely to take on the Federal Reserve’s independence. The question being asked is whether the SCOTUS will make it clear that the NLRB situation is different than the Fed, either explicitly or implicitly. I think the important distinction made in the 2020 case was that “the CFPB is headed by a single director with a five-year term, [meaning] some Presidents may not have any opportunity to shape its leadership and thereby influence its activities.” A President gets to appoint two members to the Federal Reserve per term.
The Federal Reserve is a bad example, because the Federal Reserve has a singular distinct property from every other independent agency.
The Federal Reserve powers to set interest rates and the quantity of money supply is a delegation of Congresses power to coin money; which is in support of the core constitutional principle of Congresses power of the purse. To give the President more direct control of the Federal Reserve would jeopardize a core Congressional power — as an example, it would make it easier for the President to order the trillion dollar coin to get around Congress refusing to fund the Presidents priorities.
On the other hand, most (all?) other independent agencies don’t raise these kinds of concerns on usurpation of other branches powers. In fact, some cases raise concerns in the other direction. like the office of special counsel.
My own view is that I have always found public-private partnerships suspect. In theory they can provide the best of both worlds. In practice the opposite is more likely.
CuriousOnlooker makes a good argument for continuation of the Federal Reserve as such a public-private partnership. I wish it would return to its banking roots. IIRC prior to Arthur Burns business rather than academe was the norm for Federal Reserve Chair but since Paul Volcker academe has been the norm, presumably a reflection of modern credentialism.
@Curious, it’s true that seeing an agency as exercising a legislative or judicial function would make it distinct. But the reason I brought up the Fed was it’s mentioned in the WSJ article here, and a lot of media are likely to cover a court ruling that the President can fire the NLRB chair as a prelude to taking on the Fed. In that context, particularly given that the appearance of the ability to fire Fed members could give Trump the same influence over Fed policy that having the actual power would, it’s an interesting question whether the SCOTUS would go outside its narrow focus on address matters not before it.