America's central bank, the Federal Reserve, is set up to be independent from politicians. But last week and early this week, President Donald Trump suggested he wanted to oust Fed chair Jerome Powell — something Powell says would be illegal.
The president wants interest rates to be lower, which can stimulate the economy but also spark inflation if done wrong. When financial markets recoiled, Trump said he wouldn't fire Powell but has still kept at him.
Other parts of the government are also thought to have some insulation from the White House. The Supreme Court has allowed — for now — Trump's firing of two high-ranking people from the National Labor Relations Board. The firings mean there isn't a quorum to make decisions.
For more about executive power starting with that labor board, let's turn to Elizabeth Wilkins president and CEO of the Roosevelt Institute, a liberal-leaning think tank.
David Brancaccio: So this is not a slam dunk for the administration? I mean, typically they can appoint and de-appoint, in many cases, parts of the executive branch. NLRB is different. It's independent in a sense?
Elizabeth Wilkins: That's right, there is a 90-year-old legal precedent called Humphrey’s Executor that says, “No, the President may not fire one of these commissioners for any reason that they want. They have to have cause.” The administration is very focused on testing that precedent.
Brancaccio: Now, President Trump got a lot of support from members of labor unions and styles himself as pro-labor, but as you view the administration's stance toward the NLRB, you would see it differently.
Wilkins: That is absolutely correct. I think one of the things we have to think about is whether we are seeing those promises being kept or broken. And here we have the administration both stripping the commission of some of its most enthusiastic enforcers on the commission and also entertaining arguments — we just saw a coalition of employers filing a petition with Attorney General Pam Bondi to roll back 16 decisions that protect workers’ rights to unionize. So I think we are watching in real time the administration walk back on its promises.
Brancaccio: And it's not just those four letters, NLRB. There's a lot of other letters where you're seeing the administration try to test the boundaries of how much control they can exert.
Wilkins: That's exactly right. We saw the same playbook with the Federal Trade Commission a few weeks ago. The administration illegally fired the two Democratic commissioners — Commissioner Bedoya and Commissioner Slaughter. Same move. The Federal Trade Commission protects workers, small businesses and consumers when they can't protect themselves from concentrated corporate power. And here we are again, watching the administration make sure that they can exercise unwielding power over the Federal Trade Commission and the way that it regulates the economy.
Brancaccio: Another three are SEC, Securities and Exchange Commission — certainly very focused on the great titans of industry working on Wall Street. But also there is a consumer element to the SEC work.
Wilkins: That's exactly right. I would say we are watching a very concerted effort to deregulate pieces of the economy. I just want to point out one other entity that would be affected by a decision: the Federal Reserve. If we watch the Supreme Court side with the administration in the NLRB case or the Federal Trade Commission case, I think we will really see the independence of the Federal Reserve questioned, as well. And that's a really scary prospect.
