The Legal Architecture That Makes Federal Agencies ‘Independent’

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Congress didn’t declare federal agencies “independent” and hope for the best. Over more than a century, lawmakers wrote specific rules into law—rules about firing officials, boards with overlapping terms, funding structures that bypass annual appropriations, rules requiring both parties on the board—designed to survive even aggressive presidential attempts at control. These weren’t policy preferences. They were deliberate architectural choices, written into law with the precision of engineers who knew what forces the structure would need to withstand.

On February 18, 2025, President Trump signed an executive order that tests whether that architecture can hold.

The order, titled “Ensuring Accountability for All Agencies,” extends White House Office of Information and Regulatory Affairs review requirements to independent regulatory agencies—agencies that Congress deliberately structured to operate with some insulation from direct presidential control. The executive order redefined which agencies are subject to OIRA review to include independent regulatory agencies, breaking from decades of practice that exempted such agencies from this requirement.

The Statutory Tools Congress Used to Build Independence

When Congress established the Federal Trade Commission in 1914, lawmakers provided that commissioners could be removed by the president only “for inefficiency, neglect of duty, or malfeasance in office.” This language—meaning serious wrongdoing or breaking the law—appears in almost identical form across independent agency statutes.

Courts have drawn a distinction between agencies that carry out the president’s orders and agencies that exercise functions that are part lawmaking, part judging alongside any executive functions. For the latter type of agency, Congress could impose restrictions on firing because the agency was not wielding executive power in the strict constitutional sense.

Beyond removal restrictions, Congress employed a second structural constraint: multi-member commissions with terms that don’t all end at the same time. Nearly all major independent regulatory agencies are led not by a single director removable at the pleasure of the president, but by five-, six-, or seven-member boards with staggered terms.

The Federal Reserve Board has seven members serving fourteen-year terms, with terms expiring in even-numbered years so that no president serving a single four-year term can appoint a majority of the Board. This structure makes it hard for one president to reshape an agency’s orientation during one term in office. Even if a president removes all removable members for cause, filling vacancies requires Senate confirmation, a process that takes months and can face opposition from the minority party.

These multi-member structures are often paired with a third constraint: statutory rules requiring both parties on the board. The SEC’s structure has historically presumed bipartisan composition. These bipartisan requirements prevent an agency from becoming a pure instrument of one party’s political agenda. The FEC, created in the post-Watergate era when Congress was determined to prevent the president of either party from weaponizing campaign finance enforcement against political opponents, exemplifies this constraint.

A fourth mechanism Congress used is funding independence. Agencies structured with traditional annual appropriations from Congress can be pressured through the appropriations process. The Federal Reserve System does not depend on congressional appropriations; it funds itself through earnings on its portfolio and assessments on member banks. This removes one powerful lever that a president might otherwise use to force an agency into compliance.

A fifth constraint is found in statutory language defining agency jurisdiction and limiting presidential override of specific agency determinations. The Federal Reserve Act excludes Federal Reserve monetary policy decisions from direct presidential control. The Federal Election Campaign Act gives the FEC explicit authority to investigate campaign finance violations and issue regulations within a defined scope. Many regulatory statutes include language saying the president can’t override agency decisions, meaning the President cannot simply override an agency decision and substitute their own judgment. These rules work in tandem with removal restrictions to create multiple barriers against simple presidential override.

Sixth, Congress has sometimes required agencies to be able to defend themselves in court without the Justice Department. The Federal Trade Commission, for example, can bring its own enforcement actions without DOJ involvement. This prevents a president from using the Justice Department to undermine an agency’s enforcement efforts by refusing to defend the agency’s rules in litigation or by filing briefs that contradict the agency’s legal positions.

Finally, Congress has embedded specific procedural requirements for agency decision-making that constrain presidential influence. Open meeting requirements for multi-member commissions mean that board deliberations happen on public record, with specific notice requirements. Voting procedures require documented votes on significant decisions. These procedures make it difficult for a president to pressure an agency chair into compliance through informal channels; the agency’s decision-making is visible and documented, creating accountability not just to the president but to Congress, courts, and the public.

Taken together, these mechanisms create a sophisticated system of constraints that makes it difficult for a single president to force an agency to comply with political directives that conflict with what Congress told the agency to do. This is the legal architecture that Trump’s executive order now directly challenges.

Why Every Previous President Accepted This Framework

One of the most striking facts about American administrative law is that every president since at least the 1950s, including many who embraced ambitious theories of presidential power, accepted the basic framework of independent agency independence. Courts have long recognized that established practice across multiple administrations and congresses can settle constitutional ambiguities.

The Justice Department’s Office of Legal Counsel later opined that the president might have authority to require independent agencies to submit to OIRA review. Yet presidents chose not to do so. When Clinton issued Executive Order 12866 updating regulatory review procedures in 1993, his order continued the practice of exempting independent regulatory agencies from mandatory OIRA review—a practice that has been standard across administrations regardless of party.

George W. Bush, who came to office with an administration full of people who believe the president should control all executive power, nonetheless left independent agency independence intact. His administration used other tools—appointment power, budget restrictions on agency funding requests to Congress, aggressive appellate litigation challenging agency interpretations—but did not attempt to directly subordinate independent agencies to OIRA review or to override removal protection statutes.

Obama and Biden similarly accepted the framework, though their administrations pursued ambitious regulatory agendas through executive agencies within the established system.

The Supreme Court’s jurisprudence on removal power has been in flux, and legal arguments for presidential supremacy have strong support. The Court’s more recent decisions—particularly Seila Law v. Consumer Financial Protection Bureau, a 2020 Supreme Court case about the CFPB, Collins v. Yellen (2021), and the emergency order in Trump v. Wilcox, a 2025 Supreme Court case—have all embraced broad theories of presidential removal power. Yet even as courts moved in this direction, administrations refrained from using executive orders to unilaterally subordinate independent agencies.

Several reasons explain this restraint. First, legal uncertainty: While those who believe the president should control all executive power have strong arguments, the Supreme Court has never overruled earlier precedent protecting independent agencies. No president wanted to trigger a constitutional crisis by signing an order that courts might strike down, which would weaken future presidential authority rather than strengthen it.

Second, independent agencies have bipartisan support across Congress, rooted in 1970s-era post-Watergate reforms with deep normative appeal. Attacking independent agencies directly invites legislative retaliation through budget restrictions on executive agencies or other means.

Third, the Federal Reserve’s independence is assumed by central banks and financial institutions worldwide in negotiating bilateral and multilateral agreements; undermining Fed independence could have serious international economic consequences.

Fourth, agencies like the Federal Reserve have proven effective at their missions because they operate with some insulation from short-term political pressure. Presidents of both parties have found it useful to have a Federal Reserve that can raise interest rates to fight inflation without being accused of sabotaging a president’s reelection prospects.

The Trump administration’s decision to challenge this framework directly represents a genuine break from established practice, not simply an acceleration of pre-existing trends.

The Constitutional Clash: Two Competing Theories

The collision between Trump’s executive order and congressional design of agency independence forces a fundamental constitutional choice between two competing interpretations of Article II.

The Unitary Executive Argument:

Article II, Section 1 of the Constitution provides that “the Executive Power shall be vested in a President of the United States.” The argument proceeds as follows: first, “the Executive Power” refers to all executive powers of the federal government, not a subset of them. Second, vesting all executive power in a single president creates an obligation that the president exercise control over that power. Third, if Congress could remove presidential control over executive functions through statutory design, Congress would have taken away executive power and given it to itself or to independent agencies, breaking the rule that power should be divided among branches. Therefore, Congress cannot constitutionally limit the president’s removal power over any officer exercising executive functions.

The people who wrote the Constitution debated whether the president could fire officials, and the prevailing understanding was that the president possessed removal power as a component of Article II authority. Early Congresses did not restrict presidential removal; the First Congress recognized presidential removal power through its interpretation of statutory provisions. In a 1926 Supreme Court case, the Supreme Court used this early practice to support presidential power in saying a law limiting the president’s firing power was unconstitutional.

More recently, the Supreme Court has moved in this direction. In Seila Law LLC v. Consumer Financial Protection Bureau (2020), the Court held that Congress could not insulate a single executive official from at-will removal by the president. The Court distinguished multi-member commissions but made clear that the Constitution sets limits on congressional authority to restrict removal.

In Free Enterprise Fund v. Public Company Accounting Oversight Board, a 2010 Supreme Court case, the Court struck down two levels of protection from being fired, where a lower-level official could only be fired by a higher-level official who was herself protected from removal except for cause.

The Congressional Authority Argument:

The counterargument holds that Congress possesses broad authority to design the structure of agencies it creates. The Constitution gives Congress the power to enact all laws necessary and proper to execute its specific powers listed in the Constitution. When Congress exercises its power to regulate interstate commerce, currency, securities markets, or elections, Congress must create institutions to carry out that regulatory function. In designing those institutions, Congress should have considerable latitude to choose structural features that align with the regulatory mission.

“Executive power” in Article II is not a unitary concept referring to all governmental action within the executive branch, but rather a specific phrase meaning powers like commanding the military, making treaties, and hiring/firing officials. Not every person employed in the executive branch performs “the Executive Power”—some make rules, some decide disputes, and some perform administrative functions that are better thought of as carrying out what Congress decided than as exercising discretionary executive power.

Congress can reasonably conclude that certain functions are better performed by agencies insulated from presidential pressure, particularly when the agency’s mandate is to implement statutory provisions fairly and expertly rather than to advance presidential policy preferences.

Congress retains appropriations power, legislative power to modify agency statutes, and oversight through hearings and investigations. Even if an agency is protected from presidential removal, it is not protected from Congress. Multiple mechanisms of accountability exist; removal is one of them. The Constitution doesn’t say all accountability has to go through the president.

Earlier precedent ruled that when an agency exercises functions that are part lawmaking, part judging as well as executive functions, Congress can structure that agency to maintain independence from presidential control over policy choices within the agency’s area of responsibility. The Federal Reserve Board does not exercise “purely executive” power; it makes monetary policy based on statutory mandates to promote price stability and maximum employment. The Federal Election Commission enforces statutory campaign finance restrictions in an impartial manner; it does not exercise a presidential function but rather a function of applying the law to specific situations.

The Status of This Debate:

The Supreme Court hasn’t clearly decided this question, though recent decisions suggest the Court majority favors the unitary executive view. In the emergency order in Trump v. Wilcox (2025), the Court temporarily allowed Trump to remove National Labor Relations Board members despite statutory protections, but the majority said it wasn’t deciding whether the NLRB is a special case. The majority also stated that the decision had “no bearing” on “the constitutionality of for-cause removal provisions applicable to the Federal Reserve Board,” suggesting the Court might view the Federal Reserve as uniquely protected.

The Constitution’s wording supports the president, but its structure supports Congress. History shows agencies have been independent, suggesting that the Constitution allows such independence. Yet the Court has shown increasing skepticism of earlier precedent and support for presidential removal power. Into this constitutional uncertainty, Trump’s executive order ventures.

How Other Democracies Handle Regulatory Independence

The United Kingdom provides an interesting contrast. The Bank of England operates under statutory independence for monetary policy purposes, with a statutory duty to maintain price stability embedded in the Bank of England Act 1998. Yet this independence operates within a legal framework that permits the Treasury Secretary to give the Bank of England binding directives in “exceptional circumstances” affecting economic stability—a mechanism that has never been invoked but exists as a potential override. The British model accepts more direct executive override authority than the American model, but channels that authority through specific statutory procedures rather than claiming inherent presidential power.

The European Union offers a different model, placing regulatory independence in a framework that works almost like a constitution. EU law includes provisions stating that the European Central Bank and other EU regulatory authorities “shall be independent in the exercise of their powers” and that member governments “shall respect that independence.” This independence is protected by international treaties, meaning that no single country can change it on its own; all EU countries would have to agree to change it.

Canada structures financial regulatory independence through federal banking legislation that provides removal-for-cause protections similar to the U.S. model. The Governor serves a fixed seven-year term and can be removed only for cause, with specific procedures for removal. Australia similarly structures Reserve Bank independence through statutory provisions, though with somewhat more executive oversight mechanisms than the American or Canadian models.

These countries all protect regulatory independence because they recognize its benefits of protecting agencies from pressure to make decisions based on what helps politicians win elections, particularly for financial regulation and monetary policy. If the president could control Federal Reserve decisions, central banks would wonder whether Fed decisions reflected the president’s politics or independent judgment. This could make other countries trust the Federal Reserve less and weaken the dollar’s importance in world finance.

The Gap Between Formal Independence and Practical Reality

An important distinction often overlooked is the difference between what the law says and what happens. Statutory removal protections and multi-member commissions matter, but they’re not the only things that affect how agencies act. Presidents can influence agencies in many ways even without legal authority to override them.

Appointment power is the most important tool. Even though the president can’t fire a commissioner without cause, the president can appoint people who agree with the president. Over time, a president can change how an agency operates through appointments without firing anyone. The Federal Reserve’s long terms make it harder for one president to change it quickly, but presidents appoint a new Fed Chair every four years, which lets them shape the Fed. The FEC’s two-year appointment cycles let presidents shape it more quickly, which is why the FEC often can’t agree on decisions, with appointees voting based on party rather than the law.

Budget pressure is another way presidents can influence agencies. Agencies that get money from Congress must ask for it, and if a president disagrees with an agency, the president can propose cutting its budget. The SEC, FTC, and other agencies sometimes get budget requests below what they say they need, which limits what they can do. However, agencies with independent funding (like the Federal Reserve and CFPB) don’t face this pressure.

Presidents can also influence agencies through public pressure. If a president publicly criticizes an agency, the agency feels pressure to respond. A commission chair might worry about what the president says publicly and might change decisions to avoid conflict. A chair who wants to keep the job (the president picks the chair) may make choices the president likes to keep the job. For multi-member commissions, this creates pressure within the board: the chair has reasons to agree with the president, while other commissioners can resist because the law protects them.

During Trump’s first term, Fed Chair Jerome Powell resisted pressure to cut interest rates faster, showing that independence protections can stop presidents from getting what they want. The FEC often deadlocks because commissioners vote based on party rather than the law. Paradoxically, FEC independence protections haven’t stopped the agency from becoming political; the bipartisan structure has instead led to partisan fighting.

Independence protections prevent the president from firing officials to force them to obey and make it harder for the president to change an agency overnight. But independence isn’t absolute; presidents still have many ways to influence agencies through hiring, budgets, and other tools.

What the Executive Order Requires

The order says “The Constitution gives all executive power to the President” and that all executive branch officials must follow the president. Based on this, the order sets specific requirements for independent agencies.

Most significantly, the order changes a previous executive order (a rule from the Clinton administration about reviewing new regulations) to require independent agencies to submit all new and final rules to the White House for review before they become official. This dramatically expands White House review of agency rules, which has historically not applied to independent agencies. Previously, independent agencies could voluntarily share rules with the White House, but didn’t have to, and could publish rules without White House approval. Trump’s order requires agencies to submit rules to the White House for review.

Second, the order requires independent agencies to have White House representatives and regularly coordinate with the White House on policies.

Third, the order tells the budget office to set goals for independent agencies and to control how they spend money to support the president’s goals. While the budget office already reviews agency budgets, this lets it control how agencies spend money, stronger control over agency budgets.

Fourth, the order says no agency can take a legal position that disagrees with the president or attorney general, and this applies to agencies in court cases.

The order includes a savings clause saying it doesn’t override existing laws and must follow the law. These provisions give agencies a legal basis to resist: if an agency says the order conflicts with its legal authority, the savings clause matters.

The Legal Problem:

The main legal problem is that the order tries to control agencies that Congress made independent. When Congress created the Federal Reserve, it deliberately kept it away from presidential control. Congress did this on purpose, debating whether the Fed should be controlled by bankers, government, or both that would let government oversee the Fed while keeping it away from politics. Congress deliberately kept monetary policy away from the president in ways the order tries to change.

Congress created the FEC after Watergate, when presidents had abused their power. Congress made the FEC bipartisan and multi-member so no president could control it. Congress wanted an agency that could investigate the president’s own party without fear of retaliation. Trump’s order contradicts what Congress intended.

The SEC and FTC have similar independence protections. Congress wanted agencies to regulate business fairly, not based on what helps the president. When Trump’s order requires these agencies to consult with the White House and get approval for rules, it undermines the independence Congress created.

How the Savings Clause Helps Agencies Resist

The order’s savings clause gives agencies a legal reason to resist. If the OIRA review requirement conflicts with what the law says an agency can do—for example, if the Federal Reserve Act says the Fed must make monetary policy without the president interfering—then the agency can argue the order violates the law and doesn’t apply to it. This lets agencies go to court to challenge the order instead of obeying it.

The order says it only applies to the Fed’s regulation of banks, not to the Fed’s decisions about interest rates. This suggests even Trump’s team knows some Fed functions can’t be controlled by the president. The question is whether requiring Fed staff to coordinate with the White House on regulation indirectly controls interest rates.

When Presidents Have Gone Too Far Before

Understanding how courts have handled past presidential power grabs shows what might happen to Trump’s order. Three historical cases are particularly relevant.

In 1952, President Truman ordered the seizure of American steel mills during the Korean War to stop a strike he said would hurt the war effort. Truman claimed the president could seize private property and override Congress. The Supreme Court rejected this, holding that the president can’t seize property or override laws without Congress’s permission, even in emergencies.

A Supreme Court justice’s opinion in that case created a test courts still use. Justice Jackson identified three situations: first, actions Congress approves are strongest; second, actions Congress doesn’t address are uncertain; and third, actions that go against Congress are weakest and usually fail. Trump’s order is the third type—it goes against Congress. It directly conflicts with laws Congress wrote to prevent this kind of presidential control. Under that test, courts should reject such an order unless Congress approved it (which it didn’t).

President Nixon claimed his duty to enforce the laws gave him the power to refuse to spend money Congress appropriated if he thought it would be wasteful or against his policies. Nixon refused to spend billions Congress appropriated for environmental and water projects he didn’t like. Congress rejected this theory by passing a law in 1974 that forbids the president from refusing to spend appropriated money. Trump’s order is similar because it lets the budget office control agency spending to support the president—it claims the president can block agency spending Congress approved. Agencies could argue that following this order violates the law Congress passed: that Congress’s appropriations must be spent, and the president can’t change where the money goes.

In 2019, Trump used military construction money for a border wall, claiming emergency powers let him redirect Congress’s money. Federal courts rejected this, saying the president can’t change how Congress’s money is spent, even in emergencies. This recent case is important for Trump’s current order because courts showed they’ll stop the president even on national security and emergencies.

History shows courts stop presidents when they try to override Congress. The key in each case is that Congress had decided how power should be divided, and the president tried to override Congress’s decision. Courts have consistently said the president can’t do this without Congress’s permission or a real emergency.

However, the order’s legal weakness is also why it’s designed the way it is. Rather than directly firing agency leaders, the order tries to control them through procedures. This makes it unclear whether the president is acting legally or violating the law. Courts might be less willing to block coordination and review than to block direct firing.

The Problem Agencies Face Now

Trump’s order creates immediate problems for agencies. Most directly, the order conflicts with what the law says agencies must do.

Consider the Federal Reserve: the order requires it to get White House approval for interest rate decisions, but the law doesn’t allow this and the order itself says the Fed is independent. Can the Fed follow both the order and the law?

Similarly, the FEC must enforce campaign finance law without bias, but the order requires it to follow the White House and attorney general on legal questions. The FEC can’t both enforce the law fairly and take orders from the White House.

Agencies must choose: obey the order and break the law, or refuse and face retaliation. Some agencies will probably pretend to comply while staying independent. Others may refuse to comply, or delay OIRA review indefinitely. The lawsuits that follow will test whether Congress’s independence protections can survive.

What Happens Next

Congress’s independence protections are more sophisticated than most people realize. Rather than saying agencies are independent, Congress wrote specific rules into law: rules about firing, boards with overlapping terms, bipartisan requirements, independent funding, and public procedures. Courts have approved these rules and presidents have accepted them for over a century.

Trump’s order claims the president’s constitutional power overrides Congress’s laws. This will likely go to the Supreme Court, which will have to decide how much power the president has and how much Congress can limit it. The court’s decision will determine not only whether this order survives but also whether Congress’s system of independent agencies can survive.

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