America may face an economic calamity if the Supreme Court rules too broadly on President Trump’s power to fire government officials, a starkly worded legal brief by professors specializing in finance law told the Justices on Tuesday afternoon.
No matter how the Justices rule on a pending case involving Trump’s sudden removal, without cause, of the head of a little-known federal agency, “the Court should make it clear that the order does not undermine the independence of the Federal Reserve System,” the filing argued.
The Fed, as that agency is known popularly, has vast powers over the nation’s money and credit supply, including authority to set interest rates that affect a wide array of loans and other financial transactions.
The four professors’ brief commented: “Were the Court’s order to send a message that the Fed’s independence is in doubt, it could disrupt markets or invite the removal or demotion of Fed officials in ways that might not be easily reversed.”
The Fed and its leaders are not directly involved in the new case developing in the Supreme Court, but there has been considerable speculation in Washington that President Trump is frustrated that the Fed has resisted his demands that it act more boldly to lower interest rates. Whether Trump has a specific plan to fire the Fed chair, Jerome H. Powell, is not clear at this point. As chair, Powell normally would have a fixed term that would prevent his summary dismissal.
Over many decades, Congress has sought to insulate a long list of federal agencies from political manipulation of their operations; that has been done either by giving officials in those agencies definite terms of service, or giving them protection against being fired “at will” by the President, or providing a combination of both types of protection.
Although Congress thus has treated many of those agencies as independent, they actually exist as part of the Executive Branch; the Constitution only provides three branches – the Executive, Congress, and the Judiciary.
Trump has already fired a variety of government officials, including a growing list of officials with protection from summary dismissal.
The case now at the Court – the first test of Trump’s powers to reach the Justices in the President’s new term – involves the firing this month of Hampton Dellinger, who is the head of a federal agency that protects the workplace rights of the federal government’s employees.
Trump Administration lawyers rushed the case involving Dellinger to the Supreme Court last Sunday, after two lower courts issued temporary orders that were intended to keep Dellinger on the job while his lawsuit over his dismissal continues. Neither of those lower courts has yet issued a final decision on the legality of the dismissal, but Administration lawyers are arguing that those courts’ actions have the same effect as a final ruling that interferes with Trump’s supervision of the Executive Branch.
The request for the Supreme Court to enforce that firing was filed with Chief Justice John G. Roberts, Jr., who handles emergency legal matters reaching the Court from the lower federal courts in Washington, D.C.
Although Roberts gave Dellinger’s lawyers until Wednesday afternoon to respond to the government plea, that response was filed a day early. Its main argument is that the federal courts, including the Supreme Court, have no jurisdiction to rule on any appeal from a temporary order issued by a lower federal court.
Thus, his lawyers said, it is premature for the Administration to be making a sweeping argument in order to greatly enhance the President’s constitutional power to shape the entire Executive Branch by choosing officials that he personally wants in agency leadership positions, whether or not the officials to be replaced are protected in their job tenure by acts of Congress.
Dellinger’s brief contended that Administration lawyers are making broad constitutional arguments, including some that they had not made in the lower courts, in an attempt to get the Justices to issue a historic ruling in the President’s favor.
The Administration on Tuesday drew support from a conservative legal advocacy group that strongly challenges the growth of a strong bureaucracy in Washington. Named the New Civil Liberties Alliance, the group’s brief argued that the Constitution gives the President “absolute and unqualified” power to remove any official from any post in the Executive Branch. “Neither Congress nor the Courts have authority to interfere in the President’s unilateral decision to remove Mr. Dellinger from his office,” that document contended.
Offsetting that brief was another new filing, by a group of former federal and state officials, supporting Dellinger’s challenge.
With this new series of filings, the Dellinger case showed signs of mushrooming into a historic test of constitutional authority in the White House – if the Justices were to decide that they have jurisdiction to consider and rule on the Trump Administration’s test case.
The Administration, in its first legal plea to the Justices, sought to widen the scope of the case by arguing that federal judges across the nation have been issuing a series of orders blocking new initiatives that President Trump has been taking in his first 27 days in his new White House term.
The finance law professors’ new warning about the threat to the Federal Reserve was based in part on the fact that the Trump Administration has revealed that it will, at some point, ask the Supreme Court to overrule a 90-year-old precedent that blocked President Franklin Roosevelt from summarily firing the head of an independent agency, the Federal Trade Commission. The finance professors appeared to be concerned that, if the precedent in the case of Humphrey’s Executor v. United States were to be overturned, the impact could sweep across the entire federal government.
The next step at the Supreme Court probably will be the filing of a new brief by the Trump Administration, answering Dellinger’s new brief and responding to the other new filings.
Roberts has the authority to take temporary action on his own, or share the dispute with his eight colleagues. It would take the votes of only four Justices to grant full review of the case, and the votes of five Justices to enforce the firing of Dellinger.
The Justices are scheduled to hold a private conference on Friday morning. It is likely that the Dellinger case will come up at that session. Some action may occur before the end of the workday on Friday.
