Why Congress Created Agencies the President Can’t Fire—And Whether That Still Holds

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On February 18, 2025, President Trump signed an executive order that attempts to bring agencies that Congress set up to be independent from the president—the Consumer Financial Protection Bureau, the Securities and Exchange Commission, and others—under direct White House control. (The Federal Reserve is explicitly excluded from the executive order’s requirements, though this exclusion applies only to the Fed’s monetary policy functions, not all of its regulatory activities.) The order requires these agencies to submit all proposed rules to the White House for approval, grants the Office of Management and Budget authority to control their spending, and mandates that they maintain White House liaisons in their offices. If it survives the legal challenges already mounting, the order will tear apart the system Congress built over more than a century—a system designed to keep certain decisions out of the Oval Office, no matter who occupies it.

Why Congress Created Independent Agencies

The story starts in the railroad yards of the 1880s. A few huge companies had merged and taken over so much economic power that ordinary democratic processes couldn’t touch them. State legislatures tried to regulate the railroads, but companies’ lawyers found ways to get around state rules. Congress had neither the expertise nor the attention span to manage intricate technical questions about freight rates and track access.

The ICC was designed to combine regulatory power with technical knowledge, protected from pressure based on election cycles.

The Federal Reserve Act embodied a deal that balanced different interests: Congress didn’t grant the presidency complete control over interest rates and money supply. Instead, it created a system with regional Federal Reserve Banks and a Board of Governors appointed by the president but not removable at will. Woodrow Wilson and Congress believed that interest rates and money supply were too important and too technical to be determined by election cycles, yet too important to be left entirely to bankers.

Congress was trying to protect decisions from what lawmakers saw as the greatest threat: the pressure to make short-term political calculations that contradicted sound policy. Certain decisions—whether a business practice violated antitrust law, whether a bank met capital standards, whether an insurance company was lying in its advertising—required the application of expertise and professional judgment that could be corrupted by the immediate political pressures surrounding an election year.

Congress wanted presidents to appoint the commissioners and set overall direction through those appointments. It didn’t want a president to fire commissioners simply because they reached conclusions the president disliked.

The architects of this system were influenced by Progressive Era reformers’ deep skepticism of both unchecked corporate power and unchecked political power. Independence was the answer to both problems. A commissioner who knew he couldn’t be fired for unpopular decisions might feel free to follow the law rather than political pressure.

The Supreme Court Upheld Congressional Authority

This was the deal: The president appointed commissioners and could designate which one served as chair. The president couldn’t fire them at will simply because they disagreed with him on policy. This distinction—between appointment power and removal power—became the constitutional cornerstone of the independent agency model.

In Morrison v. Olson (1988), the Court reaffirmed that Congress could create offices with removal restrictions.

For decades, presidents of both parties accepted this framework. They worked within it, using appointment power and informal pressure. The framework itself went unchallenged.

Conservative Judges Challenge Agency Independence

That changed in the 2010s and 2020s, as conservative constitutional scholars and judges increasingly embraced the idea that Article II gives all executive power to the president. Therefore Congress cannot restrict the president’s ability to remove officials. According to this view, independent agencies are an unconstitutional fourth branch of government.

The Court left untouched the basic principle: Congress could impose a single layer of protection that prevents firing except for specific reasons like breaking the law. However, the reasoning showed the Court doubted whether independence was constitutional. The pattern was clear: the current Supreme Court majority viewed independent agencies with constitutional skepticism that earlier Courts had not shared.

When Trump took office in 2025 and almost immediately began firing independent agency heads without cause—removing officials from the National Labor Relations Board, the Federal Reserve, and other agencies—he was building a record for the Supreme Court to overturn the 1935 precedent entirely.

The February 18 order represents the culmination of this strategy. Rather than simply firing agency heads and forcing litigation on removal power, the order attacks the structural independence of agencies more broadly, attempting to place them under presidential review.

How the Order Works

The order requires mandatory OIRA review for independent agencies. OIRA is part of the Office of Management and Budget and reviews proposed rules to ensure they match the president’s priorities and that benefits outweigh costs. For agencies, significant actions must be submitted to OIRA before publication. OIRA has 90 days to review them, with possible extensions. During that time, OIRA staff, who represent what the White House wants, can request changes, demand additional analysis, or block the regulation through delay.

While OIRA cannot officially reject a rule, it has real power: agencies know that rules OIRA opposes might be challenged in court for not properly weighing costs against benefits.

In the past, independent agencies didn’t have to submit their rules to OIRA. Though some chose to ask OIRA for feedback, this wasn’t a statutory requirement. The Trump order fundamentally changes this by making OIRA review mandatory for independent agencies’ significant actions.

In practice: The Federal Reserve’s Board of Governors votes to issue a new regulation on bank lending practices. Under the order, before that regulation can be published, it must be submitted to OIRA for review. OIRA’s staff, responsive to presidential priorities (which might emphasize banking industry preferences over consumer protection), can request revisions, demand new analysis showing the costs are too high, or simply delay action. Congress gave the Fed the power to regulate banks, and the Fed’s board is statutorily independent. Yet the rule can’t go into effect until OIRA approves it or all the review steps are finished—a process that could take months or years.

The order makes explicit that independent agency leaders must “establish a position of White House Liaison in their respective agencies” at a senior level. This ensures White House officials can see what the agency is doing every day and can apply pressure informally as well as through the formal review process.

The order also provides that “The President and the Attorney General… shall provide authoritative interpretations of law for the executive branch” and that “No government employee can officially say the government’s position on the law contradicts what the president or attorney general says.” This provision would take away independent agencies’ power to interpret the laws they enforce. If the Attorney General issues an interpretation of the laws an agency administers, that interpretation is “controlling” on the agency. This directly contradicts decades of practice in which independent agencies like the FTC or SEC developed their own interpretations of the laws they were created to enforce.

Why Previous Presidents Didn’t Attempt This

Presidents have sometimes tried to grab more power over agencies than the law allowed. The most famous involved President Richard Nixon and Federal Reserve Chair Arthur Burns. Declassified Nixon tapes show Nixon directly pressuring Burns to pursue expansionary monetary policy in advance of the 1972 election. “I don’t care what you say,” Nixon told Burns. “You are a free man. Make up your own mind.” Nixon was saying: loosen up the money supply. Burns complied—the Federal Reserve did ease monetary policy in the run-up to the election, and historians debate whether this was due to economic conditions or Nixon’s pressure. This shows that presidents can pressure agencies even when they’re supposed to be independent.

The Case For and Against Agency Independence

The February 18 order forces a confrontation with a difficult question: Do Congress’s reasons for creating independent agencies remain compelling in 2025, or has the world changed so fundamentally that presidential accountability should override agency independence?

The main arguments for independence are: First, some decisions need technical expertise that elected politicians often don’t have and have incentives to make short-term-popular rather than long-term-sound decisions. Would any politician trying to get reelected raise interest rates the way Fed leaders sometimes think is necessary to combat inflation? Probably not. Independent Fed leaders can make unpopular decisions without fear of losing their jobs.

Second, some decisions should be based on law and fairness, not politics. Is a particular business practice illegal? Is a particular loan product misleading to consumers? These should be decided by law and expertise, not politics.

Third, independent agencies are less likely to be corrupted. If a regulator can’t be fired for following the law, the president and industry can’t pressure them as easily.

Fourth, independent agencies mean rules don’t change every time a new president takes office. Businesses need to know that the environment won’t swing wildly based on which party won the last election.

Research from 155 countries over fifty years shows that independent central banks cause lower inflation and greater price stability. When central banks answer to politicians, politicians pressure them to increase the money supply in the short term to help the economy before elections, even if it causes problems later. Independent central banks can resist that pressure.

The arguments against independence are also getting stronger. First, there’s the accountability problem: How can an independent agency head, who can only be fired for breaking the law, be held accountable to voters? In a democracy, voters should be able to punish elected officials for bad government decisions. If independent agencies make big decisions the president can’t control, voters can’t punish those decisions at the ballot box.

Second, there’s the practical question of whether independence on paper means independence in practice. Nixon pressured Burns despite the Fed’s statutory independence. Presidents can influence agencies by choosing who runs them, by hints and signals, and by controlling their budgets and the weight of the presidency itself. The question is whether protecting people from being fired matters when the president has so many other ways to influence them.

Third, there’s the empirical question of whether independent agencies do their jobs better than agencies the president controls. Do independent agencies make better, fairer decisions? Or do they avoid responsibility while protecting their own power? When industries secretly take over the agencies supposed to regulate them, it suggests that independence can backfire. An agency protected from the president might end up protecting the industries it’s supposed to regulate, with nothing stopping industry from controlling it.

Fourth, there’s the changed political context argument. The independent agency model was designed when both parties agreed on basic goals. Democrats and Republicans disagreed on details but both believed regulation was needed. Today, Democrats and Republicans disagree about whether government should regulate at all. Independence might make political fights worse instead of better. People no longer trust experts and neutral expertise the way they did when independent agencies were created. Many people think experts are biased, pushing a political agenda, or controlled by special interests. In that context, saying unelected experts should make decisions might seem less appealing than letting voters control policy by choosing a president.

But there’s a counterargument: independence might be more important than ever. Because politics are so divided, decisions need protection from political pressure. If left alone, elected officials of both parties would make decisions based on what helps them get reelected instead of following the law. An independent agency, following the law instead of election cycles, stops politicians from doing whatever helps them win. The inflation that hurt the U.S. economy in the 1970s was partly caused by politicians pressuring the Fed to loosen up the money supply to help the president get reelected.

How Other Democracies Structure Regulatory Agencies

The European Central Bank, which controls interest rates and money supply for European countries, has even more protection from politics than the U.S. Federal Reserve. The ECB’s independence is a basic rule in the EU’s founding treaty. No elected official can tell the ECB’s governing council what to do, and while there is accountability through transparency and reporting requirements, no politician can overrule the ECB’s decisions. European leaders decided that interest rates and money supply need protection from election politics.

The Bank of England is less independent than the ECB but still has legal protections that stop the Prime Minister from controlling it. Parliament told the Bank’s Monetary Policy Committee to keep inflation low, and the Governor can’t be fired for disagreeing with the Prime Minister. After periods when the government controlled the central bank (especially during the high-inflation 1970s), the UK changed its system to give independence, and the evidence shows it worked for keeping prices steady.

In democracies where the government controls the central bank—various Latin American countries at different times, Turkey, and Hungary under Viktor Orbán—the pattern is the same: inflation goes up, the currency becomes less stable, and the central bank becomes a tool for politicians to reward friends instead of managing the economy properly. This international evidence suggests the reasons for creating independent agencies weren’t American concerns but real problems every democracy has.

How Agencies and Congress Might Respond

If the Trump order takes effect and courts don’t stop it, agencies must decide: follow it or fight it. The Federal Reserve has said that OIRA can’t review interest rate decisions without destroying the Fed’s independence and breaking agreements with other countries. The Fed’s lawyers argued that the law creating the Fed gives it independence over interest rates that the president can’t override with an order.

Congress could change the laws that created independent agencies to protect them from OIRA review and say the president can’t control policy through orders. Congressional Democrats have introduced bills to stop the Justice Department from being used as a political tool, and Congress could pass similar laws for other agencies. Congress could also attach conditions to spending bills saying OIRA can’t review independent agencies, stopping it from happening.

But Republicans control Congress and probably won’t pass laws protecting agencies from a Republican president. And if Democrats take over later, they could do the same thing: a future Democratic president could claim the same power over agencies.

What Happens Next

Courts, especially the Supreme Court, will probably decide what happens to the Trump order. Lower courts will probably reject it because the laws creating agencies protect their independence and because Congress clearly wanted some decisions made without the president controlling them.

The Supreme Court has six conservative justices who doubt whether independent agencies are constitutional and might approve the order or use it as a reason to overturn the 1935 ruling.

If courts ultimately approve the order—either by narrowly interpreting the laws or by saying the president controls all executive power—the effects would go far beyond policy. It would mean the president controls everything and that Congress can’t protect agencies from the president. Depending on how far the Court goes, it could affect not only agencies but also inspectors general and the Office of Special Counsel and other checks on presidential power.

Congress decided in 1913, 1914, 1934, 2010, and other times that some decisions are too important, too technical, or too exposed to political pressure to let elected politicians make alone. Whether that answer survives 2025 will decide more than who controls the Federal Reserve or the FTC but whether there are any real limits on the president besides elections.

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