Trump officials ask Supreme Court to allow firing of Fed governor Lisa Cook
The Trump administration asked the Supreme Court on Thursday to allow it to fire Federal Reserve governor Lisa Cook, an unprecedented move that would give the president greater power over the central bank and its unparalleled role in steering the U.S. economy.
The case sets up the biggest test to date of President Donald Trump’s push to exert greater control over independent agencies by firing their board members and heads. Trump has already successfully petitioned the court to fire executives from three other boards while cases against their removal play out in court.
The Trump administration tried unsuccessfully to get a court to remove Cook before a two-day Federal Reserve meeting this week where the central bank cut interest rates by a quarter point amid signs of a softening labor market. Cook voted to lower the rate.
Trump has accused Cook of mortgage fraud — a charge she denies. The Justice Department is investigating, but no charges have been filed. The Washington Post has obtained documents that appear to contradict the Trump administration’s claims about the mortgage fraud accusations.
Solicitor General D. John Sauer wrote in the filing with the Supreme Court that Trump had the necessary grounds to carry out a “for cause” removal of Cook as the law governing the Fed requires, and said lower courts did not have discretion to review the president’s rationale.
“The President’s strong concerns about the appearance of mortgage fraud, based on facially contradictory representations made to obtain mortgages by someone whose job is to set interest rates that affect Americans’ mortgages, satisfies any conception of cause,” Sauer wrote.
Cook has contended her removal was illegal and a pretext for Trump to have a Fed board that would accede to his wishes to lower interest rates. Her attorneys did not immediately respond to a request for comment Thursday.
Cook is one of seven members of the Fed board. The Senate this week confirmed Trump’s latest pick for the board, Stephen Miran, who previously served as an economic adviser to the president and is taking a leave from the White House. The Fed is tentatively expected to lower interest rates at least two more times this year.
If the high court decides to hear the case on Cook’s firing, it will be one of a trio of current cases in which the high court will decide whether to greatly expand the president’s power of the economy and federal spending.
The Supreme Court has already said it will hear on an expedited basis a case over the legality of Trump’s sweeping tariffs. Arguments will be held on Nov. 5 and a decision is likely to come before the end of the term next summer.
The high court is also grappling with an emergency appeal by the Trump administration, which is asking the justices to allow it to freeze billions of dollars in foreign aid budgeted by Congress. The case is a significant test of Trump’s bid to exert more control over government spending. A ruling could come at any time.
A divided federal appeals court on Monday night found Cook can keep her job, ruling against the Trump administration and its last-minute push to remove her ahead of the central bank’s key meeting on Tuesday and Wednesday.
The three-judge panel said Trump violated Cook’s rights by not giving her a chance to defend herself against the accusations.
“The government does not dispute that it failed to provide Cook even minimal process — that is, notice of the allegation against her and a meaningful opportunity to respond — before she was purportedly removed,” the majority wrote in the 2-1 ruling.
Judges Bradley N. Garcia and J. Michelle Childs, both appointees of former President Joe Biden, ruled against the Trump administration. Judge Gregory G. Katsas, a Trump appointee, dissented.
Katsas wrote that a federal judge was wrong to grant Cook an injunction against her removal on grounds that the alleged mortgage fraud occurred before she was nominated to the Fed. He also said Cook did not have a right to due process.
“Both holdings are mistaken, and the equitable balance here tips in favor of the government,” Katsas wrote.
Sauer wrote in Trump’s new filings with the high court Thursday that Cook had been given due process.
The Trump administration has already won rulings from the Supreme Court allowing it to remove board members of the Consumer Product Safety Commission, National Labor Relations Board and Merit Systems Protection Board. The justices found the Constitution vests executive authority in the president in one of the cases, and so the president could remove the officials despite laws insulating them from political interference.
But the justices said in a decision earlier this year that the Fed was structured differently and that the same standards would not necessarily apply.
In a separate case, Chief Justice John G. Roberts Jr. allowed Trump to go forward with the removal of a Democratic member of the Federal Trade Commission earlier this month while the court considers whether to weigh in on a case challenging her removal.