JD FOSTER: No, SCOTUS, The Federal Reserve Isn’t An ‘Independent Agency’

The Supreme Court was surely correct in its recent majority decision acknowledging President Trump acted within his authority in removing two holdover members of so-called “independent agencies.” But then the Supremes got too-cute-by-half with a possible carve out for the Federal Reserve.

In practice, the Federal government operates with five branches. We have the three constitutionally established branches in the legislative, judicial, and executive, and then we have “the fourth estate” of the free press, God help us.

And then there’s the fifth estate expressed in every government – the bureaucracy. Ninety years ago in Humphrey’s Executor the Court decided the Federal Trade Commission (FTC) exercised “quasi-legislative or quasi-judicial” powers and so was not wholly under the executive branch. Thus, the Court ruled a president couldn’t remove members of the FTC but for cause.

The Court’s Humphrey’s ruling was nonsensical from the outset. Agencies can only exercise authorities deriving from authorizing statutes. Those authorities may appear to reflect legislative or judicial powers, but those powers derive entirely from the authorizing statute. Thus these agencies execute Federal law and fall within the scope of the executive.

Humphreys vastly increased the independence of the so-called “independent agencies.” By insulating agency heads the Court expanded their power and pushed us down the undemocratic road of government-by-bureaucrat.

In its recent decision the Supremes seem intent on correcting the previous error except, perhaps, with regard to the Federal Reserve. In the majority opinion the Supremes implied the order may not apply to the Fed because the central bank is a “