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The decision that reshapes the relationship between the White House and independent institutions
The United States Supreme Court on Monday delivered one of the most important decisions of this term, giving President Donald Trump a significant victory in his efforts to expand control over independent federal agencies, but at the same time placing clear limits on his authority over the Federal Reserve.
In two decisions announced simultaneously, the Court's conservative majority ruled that Trump can fire members of the Federal Trade Commission (FTC), while rejecting for the time being his attempt to remove Federal Reserve Governor Lisa Cook from office.
The decision is considered a key moment in the constitutional debate over the limits of presidential power and the independence of federal institutions.
Victory for Trump in the FTC case
By a 6-3 majority, the Supreme Court upheld the dismissal of a member of the Federal Trade Commission, significantly weakening a historical precedent that for nearly a century had limited the ability of presidents to remove the heads of independent agencies.
Supreme Court Chief Justice John Roberts clearly signaled a change in the course of American jurisprudence.
" If there is anything left of Humphrey's precedent, we overturn it ," Roberts wrote in the majority opinion.
The decision is expected to have broad consequences for how independent federal agencies, which Congress had designed to operate away from the president's direct political influence, operate.
The limit set for the Federal Reserve
On the same day, the Supreme Court rejected Trump's request to immediately fire Federal Reserve Governor Lisa Cook.
By a 5-4 majority, the court ruled that Cook had the right to be formally notified of the charges against her and to have the opportunity to present a defense before a decision was made to remove her.
Roberts pointed out that Congress had clearly defined these procedural guarantees in the 1913 law and then in the 1935 amendments.
" This does not mean that a Federal Reserve governor is entitled to a full trial or a special audience with the president. But the law requires that he be notified of the charges and have an opportunity to respond ," he wrote.
The court did not rule on whether Trump had the right to fire Cook over the mortgage fraud allegations, which she has consistently denied. According to the ruling, the case must first be reviewed on the facts. Until then, Cook will continue to serve.
Why the Federal Reserve was treated differently
In its reasoning, the Supreme Court made a clear distinction between the Federal Reserve and other federal agencies.
According to Roberts, the Federal Reserve enjoys a unique historical and institutional status. The US central bank sets its own budget without direct congressional oversight and is made up in part of privately owned regional banks, which makes it operate at a deliberate distance from the political process.
This argument was used to defend the independence of the institution responsible for American monetary policy.
Political and economic implications
The decision sends two different signals. On the one hand, the Court gives Trump a significant victory in his efforts to expand presidential control over independent agencies, weakening one of the most important precedents in American administrative law.
On the other hand, it protects – at least for the moment – the independence of the Federal Reserve, an institution considered vital to the financial stability and credibility of the American economy.
Analysts see the decision as a message that, although the conservative majority has shown itself willing to expand the president's powers in some areas of the federal administration, it is not willing to allow the immediate politicization of the US central bank.
A precedent with long-term impact
Monday's two decisions are expected to affect how presidential powers will be interpreted in the coming years.
If the FTC decision strengthens the president's control over federal agencies, the procedural protections guaranteed to the Federal Reserve show that the Supreme Court continues to consider the independence of the central bank as a fundamental element of the American institutional system.
The debate over the limits of presidential power and the autonomy of federal institutions is expected to continue, as the Trump administration aims to reshape the relationship between the White House and the federal bureaucracy. / Pamphlet
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