It is no accident that the Supreme Court made a rare and possibly unprecedented decision to post Trump v. Slaughter and Trump v. Cook online at the same time on Monday. The first decision held that the president has the power to fire agency heads. The second created an exception for the Federal Reserve.
Usually, decisions are posted as announced, with justices allowed to read their dissents, as Justice Sonia Sotomayor did in Slaughter. But that would have left half an hour between the court announcing that President Donald Trump may control federal agencies and revealing that the Federal Reserve is an exception. Such a delay would have affected financial markets, which Chief Justice John Roberts rightly wanted to avoid.
Roberts’ delicate handling of the two cases is matched by their reasoning. Both Slaughter and Cook rely less on a textual reading of the Constitution than on a historical analysis of how the founding generation practiced the constitutional principles they had just laid down.
Slaughter is the easier case. Starting with the Founders’ writings, Roberts establishes that the Constitution’s authors envisioned a “unity in the Executive” that would allow for both a vigorous president and an accountable one. That unified executive includes the ability to hire and fire agency heads. “The power of appointing and removing executive officers [is] inherent in [the] Executive,” Roberts quotes from Thomas Jefferson’s papers. “He who appoints may remove.”
While the Constitution is silent on removal, the First Congress quickly established the rule. When the House drafted a bill creating the first five government agencies, it initially included language giving the president power to remove the secretary of foreign affairs. Those who believed the Constitution already gave the president that power, including James Madison, had the language removed. The Supreme Court later affirmed this understanding in Ex parte Hennen, Parsons v. United States, and Myers v. United States.
Only in 1935, in Humphrey’s Executor v. United States, did a Supreme Court at odds with President Franklin Roosevelt’s New Deal bless Congress’s attempt to shield the Federal Trade Commission from political accountability. Humphrey’s did not explicitly overturn Myers. Instead, the court reasoned that the FTC exercised only “quasi-legislative” and “quasi-judicial” powers and therefore did not fall fully under the Executive Branch.
That presumption was barely true then and is certainly not true today. Congress has piled more power onto the FTC and many so-called independent agencies, including the Securities and Exchange Commission, the Federal Communications Commission, and the National Labor Relations Board. These agencies issue rules, investigate violations, bring enforcement actions, and impose legal consequences on private parties, respectively. These are executive powers that, under the Constitution’s original design, belong to the president.
Roberts’ Slaughter decision calls out the fiction of Humphrey’s Executor and sends it to the dustbin of history. “These officers exercise the President’s power, not their own, and thus must be responsible to him,” Roberts writes. Once that premise is accepted, the constitutional logic of independent agencies collapses. Congress may create offices, define their duties, and require Senate confirmation, but it may not create a headless fourth branch of government exercising executive power beyond presidential control.
That sweeping rejection of Humphrey’s, however, created an immediate problem. If officers who exercise executive power must answer to the president, then why not the governors of the Federal Reserve, who not only set monetary policy but also supervise and regulate banks?
Having used Slaughter to restore the general rule of presidential removal, Roberts had to explain in Cook why the most powerful independent agency in Washington was not merely another branch of the same tree.
As he did in Slaughter, Roberts begins Cook with history. He starts before the Constitution, with the Bank of North America, chartered by the Congress of the Confederation in 1781. Like the later First and Second Banks of the United States, it was majority privately owned and designed to maintain a sound national currency.
Roberts notes that the men who wrote the Constitution saw the financial-stabilization mission of these banks as so important that they insulated them from complete presidential control.
“When they established the First Bank of the United States, they guaranteed its independence from Presidential control,” Roberts writes. “Their successors did the same for the Second Bank.”
That independence did not save the Second Bank from politics. President Andrew Jackson denounced it as a dangerous concentration of financial power, vetoed its recharter, and withdrew federal deposits. When its charter expired in 1836, the United States was left without a central bank. A century of recurring panics followed, including those of 1837, 1857, 1873, 1893, and 1907. The last convinced Congress to create a lender of last resort through the Federal Reserve Act of 1913, which established today’s hybrid Federal Reserve System and protected its governors from presidential control by allowing removal only “for cause.”
For Roberts, this unique history sets the Federal Reserve apart. As he puts it, “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.”
Justice Clarence Thomas is right that the Federal Reserve now has far more regulatory and enforcement power than the First and Second Banks ever did. But Roberts seems to anticipate this objection in Slaughter.
“We have left open the possibility that some functions traditionally handled outside the Executive Branch may not be encompassed by Myers’s general rule,” Roberts writes. One such entity, he adds, is the Federal Reserve, “to the extent that it follows in the distinct historical tradition of the First and Second Banks of the United States—both of which influenced monetary policy and neither of which were subject to plenary Presidential control.”
The key phrase is “to the extent.” Roberts does not say every power now exercised by the Federal Reserve inherits the constitutional pedigree of the First and Second Banks. He says the Fed is protected only insofar as it follows its “distinct historical tradition.” That appears to concede Thomas’s strongest point: The modern Fed does far more than manage money and credit. It supervises banks, issues regulations, approves transactions, conducts examinations, and brings enforcement actions. Those powers look much more like the executive authority Roberts placed under presidential control in Slaughter.
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The Court may have saved the Fed’s monetary independence in Cook, but it also left open an obvious next fight: whether the Fed’s regulatory and enforcement powers enjoy the same historical protection.
In Slaughter, Roberts restored a vital separation-of-powers principle: Presidents must control those who exercise executive power in their name. In Cook, he preserved the equally vital tradition of independent monetary policy — the money supply is different. The Founders knew it, and Roberts wisely protected both principles.