Gary Gensler (Massachusetts Institute of Technology (MIT) – Sloan School of Management) & Lev Menand (Columbia University – Law School) have posted Presidential Supremacy Over Administrative Agencies on SSRN. Here is the abstract:
In the United States, the public has long benefited from the role played by administrative agencies with a degree of autonomy from the White House, each agency with distinct duties and authorities to implement the law as set out by Congress. In its first hundred days, the second Trump administration has moved rapidly to centralise control over all administrative agencies, including so-called independent agencies, which have long operated at a greater remove from the White House . The administration is asserting an interpretation of the Constitution known as “unitary executive theory” which, in its pure form, holds that the President has the inherent power to fully control all federal agencies, regardless of statutory design. Such presidential supremacy, in a break with history, significantly increases the role of White House staff in the operations of independent agencies. It also changes how all departments and agencies operate, with less insulation for their adjudicatory proceedings and less protection for civil servants. In this chapter, we examine what these changes may mean for the economy. We build on the broad economic research consensus on the value of agency autonomy in central banking (a consensus that is generally shared by political observers and policymakers in both parties). First, we explore Congress’ goals in setting up agencies and granting them some degree of autonomy from the White House. Second, we describe five major moves that the new administration has made to take greater control of all federal agencies. Third, drawing on empirical evidence where available, we consider how the resulting loss of agency semi-autonomy may affect the economy. Lastly, due to the critical importance of the Federal Reserve, we assess what these changes might mean for the conduct of monetary policy, inflation, and economic growth.