For decades, the US regulators who work to keep inflation down and economic growth up, ensure markets are competitive and transparent, safeguard elections, and protect workers, consumers and investors have operated largely free of political influence. The Federal Reserve, the Securities and Exchange Commission (SEC), the Federal Election Commission, and more than a dozen other regulatory agencies have a remit to make and enforce rules under leaders who are protected from being removed by the president. Their independence is meant to guarantee that their decisions serve only one master: the public.
President
The fired regulators have argued their removals are a breach of long-settled law. But the Supreme Court’s conservative majority appears sympathetic to Trump’s consolidation of authority over the regulators: On May 22, the justices
What are independent agencies?
In its broadest sense, an independent agency can mean any executive body that doesn’t report to a cabinet secretary. These include non-regulatory agencies like the Social Security Administration, the National Aeronautics and Space Administration or the Central Intelligence Agency.
But Trump is particularly focused on gaining influence over independent agencies that meet the narrower definition of holding regulatory power over markets, utilities, the workplace and other parts of the public sphere. These include financial regulators such as the Fed, the SEC and the Commodity Futures Trading Commission, and others with important enforcement functions such as the NLRB, the Nuclear Regulatory Commission, and the Occupational Safety and Health Review Commission. Though housed in the executive branch, independent regulators often have quasi-judicial and quasi-legislative functions: They don’t just execute rules, but also enforce and make them.
Congress has come up with a number of mechanisms to insulate these bodies from political pressure. They’re often led by a director with tenure protection or multi-member boards with staggered terms of between five and 14 years. Those boards must consist of members from more than one political party. And though directors and commissions are generally appointed by the president and confirmed by the Senate, the president typically can fire board members only “for cause” — neglect of duty or malfeasance — not at will.
In many cases, agencies are even more removed from political influence — or, some would say, accountability — by having budgets that aren’t subject to annual congressional spending bills. The Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA), for example, are funded by charging deposit insurance premiums to banks and credit unions, and the Fed and the Consumer Financial Protection Bureau (CFPB) get income from the interest on assets held by the Fed.
What’s their history?
In the 19th century, corruption was rampant in the railroad industry. Companies often bought the approval of politicians and newspaper owners by offering them free passes and discounted stock. Railroads used their monopoly power to set high rates.
The Grange movement, a collection of rural and agricultural interests harmed by the high railroad rates, pressed Congress to do something. And so in 1887, Congress passed the Interstate Commerce Act, which established the Interstate Commerce Commission to regulate the industry. It was the first federal regulatory agency.
Though it was originally created inside the Interior Department, the ICC had many of the hallmarks of the independent regulatory agencies that we still see today: Instead of a single director, it was headed by a board of five commissioners appointed by the president and confirmed by the Senate. Those board members had staggered, six-year terms, so the president couldn’t replace them all at once. They could only be removed for “inefficiency, neglect of duty, or malfeasance in office.” And no more than three commissioners could be from the same political party.
Other regulatory agencies controlled by boards and commissions with staggered terms — the Federal Trade Commission, and Federal Reserve Board, the Federal Communications Commission, and more — followed in the decades after.
In a unanimous 1935 decision in Humphrey’s Executor v. United States, the Supreme Court said the president didn’t have the power to fire members of the FTC for solely political reasons. The landmark decision was one of several 20th century rulings that affirmed the independence of this class of agency.
How is Trump targeting them?
Trump’s attempts to establish more control over regulators have two prongs of attack: firing personnel and changing policy.
The president has dismissed several Democratic commission members of independent agencies, who are historically seen as having protection across administrations. Those included members of the
In a Feb. 18 executive order, Trump
More than two dozen lawsuits have directly challenged or cited Trump’s executive order, according to data compiled by Bloomberg Law. At least one agency, the CPSC, defied the order by moving to propose a rule on lithium-ion batteries without getting White House signoff. Trump fired the three Democratic members of that commission on May 8, and on May 21, they sued, arguing that he had exceeded his authority. (The two remaining members of the commission — both Republicans — later voted to withdraw the rule proposal.)
Among other agencies, the order names the Federal Election Commission, which regulates campaigns for federal office, as subject to this new oversight. The Democratic National Committee went to court, calling the order an “unprecedented assertion of presidential power.”
Trump is also disrupting independent agencies in the same ways that he’s singling out bureaucrats directly under his control in the cabinet-level departments. With an April 18 executive order, Trump intended to reclassify about 50,000 career civil servants as positions he can hire and fire, and
Is he targeting the Federal Reserve?
Trump has
The president’s February executive order, which put the Fed under OIRA’s regulatory jurisdiction, specifically carved out an exemption for Fed functions related to the conduct of monetary policy. Instead, it applies only to functions “directly related to its supervision and regulation of financial institutions.”
Economists generally agree that political influence on the Fed would impair investor trust. Trump’s Treasury secretary, Scott Bessent, said in April that the Fed’s independence in setting monetary policy was a “jewel box that has got to be preserved.”
But as Peter Shane, who teaches law at New York University, argues, Trump is still walking a tightrope with his executive order. Ultimately, the only way to enforce the regulatory policy is to oust Fed officials who don’t comply — and many of those same officials are also responsible for monetary policy. “Members of the Fed cannot be half-fired, half-empowered,” he said.
What is Trump’s legal argument?
“The Constitution vests all executive power in the president and charges him with faithfully executing the laws,” Trump’s February executive order begins. “However, previous administrations have allowed so-called ‘independent agencies’ to operate with minimal presidential supervision. These regulatory agencies currently exercise substantial executive authority without sufficient accountability to the president, and through him, to the American people.”
That language is a succinct distillation of the so-called Unitary Executive Theory. That school of constitutional interpretation — which has been growing in conservative legal circles since Ronald Reagan’s time — holds that the Founders specifically intended the president to have broad authority over the bureaucracy. The theory is the
The CFPB, for instance, is operating without a full-time director and instead is being run by Vought, who has said the agency, created in the aftermath of the Great Financial Crisis and a longtime target of conservatives, would conduct only the minimum functions required by law.
Proponents often point to a quotation from James Madison, the fourth US president: “If any power whatsoever is in its nature Executive, it is the power of appointing, overseeing, and controlling those who execute the laws,” Madison, then a House representative, said in 1789.
Project 2025, the manifesto for a more muscular presidency authored by Vought and other conservative thinkers, urged Trump to directly challenge the Humphrey’s Executor decision. On Feb. 12, the Justice Department stated that it would encourage the Supreme Court to overturn it.
What does the Supreme Court think?
In recent years, the court’s conservative majority has indicated a willingness to give the president the power to fire leaders of independent agencies — with the exception of the Fed.
Recent Supreme Court decisions have already limited the scope of Humphrey’s Executor: In 2010, the court weakened for-cause removal protections, and in 2020, in Seila Law LLC v. Consumer Financial Protection Bureau, it found that the CFPB’s single-director structure, with for-cause removal protection, was unconstitutional, while agencies with a multi-member board structure are constitutional.
In May, the court ruled that fired NLRB member
Writing for three liberal justices in dissent, Justice
After the case moves through lower courts, it may return to the Supreme Court.
What do defenders of independent agencies say?
Proponents have long argued that independence can contribute to better, more impartial decision-making driven by expertise. This is important not only for highly technical subjects – interstate electricity transmission and telecommunications, for example – but also for finance. Political interference in financial regulation may lead to greater unpredictability, as regulatory philosophies shift based on which party controls the White House, or undue influence by moneyed interests. “Time and again in the past decades, national and regional financial crises have been deepened and worsened by political interference in financial sector regulation and supervision,” the International Monetary Fund found in a 2004 review.
After the Supreme Court allowed Trump’s firing of Wilcox and Harris to temporarily stand,
In her dissenting opinion in Seila Law, Kagan rebutted Justice
“So year by year by year, the broad sweep of history has spoken to the constitutional question before us: Independent agencies are everywhere,” she wrote.
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