Wait, Can He Actually Do That? Part 6: Ventriloquizing Independent Agencies
In an Executive Order (EO) signed on Tuesday of this week, President Trump sought to undercut the independence of independent agencies. The EO, titled "Ensuring Accountability for All Agencies," imposes various restrictions on such agencies. As I'll explain, some of these restrictions are permissible. Others aren't, or at least shouldn't be--unless Congress lacks the power to create independent agencies in the first place. Although the Trump 2 administration pretty clearly thinks that's the case, it isn't the current state of the law. After parsing the order, I'll explain a pathway to challenging it in court.
As a preliminary matter, I've seen some online chatter to the effect that the EO purports to make the president and the AG the universal final authorities on the meaning of federal law, superior even to the courts. That's plainly not what it says. Rather, the EO makes them authoritative within the executive branch. But is even that more limited assertion of authority permissible?
As I noted in my Verdict column earlier this week, the Trump 2 administration is pushing a very robust version of the unitary executive theory. In the column I explained that the administration aims at SCOTUS narrowing or reversing precedents that permit Congress to create commissions headed by people who cannot be removed by the president or his direct agents except for good cause. If the administration succeeds in invalidating independent agencies in this way, it will have no need for the Ensuring Accountability EO, which should be understood as a backstop: if the administration can't eliminate independent agencies by converting their leaders into officers subject to at-will removal by the president, it will undercut their independence by forcing them to work under White House supervision.
That said, at least one aspect of the EO is fairly anodyne. It requires heads of independent agencies to consult with the Office of Management and Budget and other White House officials. To the extent that this requires agency heads to provide information to the White House, that's lawful--indeed, it's the president's prerogative under Article II, Section 2 of the Constitution: "he may require the opinion, in writing, of the principal officer in each of the executive departments, upon any subject relating to the duties of their respective offices." For purposes of that clause, an independent agency surely counts as an "executive department."
The obligation of independent agencies to toe the White House line on legal matters is a bit trickier. There is already on the books a federal statute that makes the Attorney General and the Solicitor General the representatives of the United States in the Supreme Court and, if the AG so decides, in any court of the United States. As Professor Neil Devins wrote in an astute 1994 law review article, the ultimate ability of central Justice to decide whether to back an independent agency in litigation seriously undercuts agency independence. Devins proposed giving more independent litigation authority to the independent agencies. (They already possess some.) A more recent and more wide-ranging paper by Professors Dan Farber and Ann O'Connell intriguingly describes the existence of inter-agency conflict as potentially beneficial.
Over the last several decades, there have been circumstances in which independent agencies have argued positions contrary to the position taken by the AG and SG, but as I read the relevant authorities, this is mostly by the grace of the presidential administration, except where specific statutes provide otherwise. It is pretty clear that the Trump administration will not extend any grace to independent agencies going forward. That's not unlawful, however.
Having said that, the fact that the administration has the ultimate legal authority to frustrate agency independence through controlling SCOTUS and potentially other litigation at the back end doesn't mean that the administration has the legal authority to frustrate agency independence at the starting gate. Yet the Ensuring Accountability EO assumes such an authority. It doesn't merely require agency heads to provide reports to the president, as contemplated by the Constitution's opinions clause; it requires them to "coordinate policies and priorities with the directors of OMB, the White House Domestic Policy Council, and the White House National Economic Council." That's a direct assault on agency independence.
Can this effort to control independent agencies from the starting gate be challenged in court? Potentially yes. Suppose an independent agency promulgates a regulation or takes other actions without consulting with the White House. What can the White House do in response? If some third party challenges the agency's action (either as a plaintiff suing under the Administrative Procedure Act or as a defendant in the course of defending against an agency enforcement action), the AG or SG can frustrate the agency's goals by taking a litigation position contrary to that of the agency, but that could take years.
A more immediate White House response would be to fire the agency head and any other commissioners (or the like) on the agency who are not toeing the president's line. Then, when the agency head and/or other commissioners sue to retain their jobs, the White House would offer two responses: (1) the good-cause removal provision is unconstitutional, so the president didn't need a good reason to fire the agency head and/or other commissioners; and (2) even if the restriction on presidential removal is constitutionally valid, the failure to coordinate in violation of the Ensuring Accountability EO was good cause.
As I mentioned above, if the administration prevails on (1), there are no independent agencies, so that's that. But if SCOTUS does not substantially modify its removal power precedents, then (2) comes into play. At that point, the question will arise whether the White House is permitted to assert control over an agency that Congress made independent via good-cause removal protection. If the Ensuring Accountability EO is deemed inconsistent with the statutory protection against removal, then failure to abide by the EO cannot be good cause.
I would hope the courts see the matter this way. After all, the whole point of insulating agency heads and commissioners from at-will removal is to give them the ability to exercise independent policy judgment. So a court that, by hypothesis, accepts the constitutionality of good-cause removal restrictions should also regard the EO as an unlawful effort to circumvent Congress's will. But there's no guarantee that the courts (including SCOTUS) would give the relevant good-cause statutes the purposive reading I think they deserve.
Finally, it's notable that the EO asserts that it does "not apply to the Board of Governors of the Federal Reserve System or to the Federal Open Market Committee in its conduct of monetary policy." That's probably in there to reassure courts that upholding the EO would not give rise to direct political control of the central bank and thus risk disastrous hyper-inflation if and when Trump recklessly seeks to lower interest rates to juice the economy. The courts should not be reassured, however, because all of the reasons the administration and the EO advance in favoring of reining in other independent agencies pretty clearly apply to the Fed. The carve-out is, from the perspective of the unitary executive theory, arbitrary.
Meanwhile, the fact that Trump is not currently seeking to control the Fed is cold comfort. He has indicated in the past that he'd like to pressure the Fed to lower interest rates regardless of the economic data. The fact that he isn't doing so in this one EO is no reason to think he wouldn't do so later.