It may feel as though there’s a new executive order from the White House to decipher and parse every day. In reality, though, that’s simply not true. The Trump administration, in fact, is actually issuing about two executive orders every day. (Note: executive orders do not include presidential memos, executive guidance, or spending cut mandates from DOGE.)
This aggressiveness is unique, even for President Donald Trump. In his first four years in office, President Trump issued 220 executive orders in total. Since he started his second term on January 20 — just 37 days ago, if you can believe it — the commander-in-chief has already issued 73 executive orders – just about one-third of the entire amount he issued between January 2017 and January 2021. Put in a more historical context, President Trump already has issued more executive orders than the first 10 U.S. presidents combined.
Last week, President Trump issued an executive order that will radically alter how financial regulatory agencies work. What is this order, what all does it entail, and will it hold up in federal court?
Let’s take a look.
Independent Agencies Lost Some Of Their Independence
On February 18, President Trump issued an executive order called “Ensuring Accountability for All Agencies.” As CNN noted, “The order follows — and is closely tied to — a push by the White House to remove the leaders of some independent agencies, including those who are empowered to criticize the president’s agenda.”
The first section of the executive order outlines the Trump administration’s argument for why he believes cabinet and senior staff members like Elon Musk, though unelected, should wield significant power. “The Constitution vests all executive power in the president and charges him with faithfully executing the laws,” the order begins. “Since it would be impossible for the president to single-handedly perform all the executive business of the federal government, the Constitution also provides for subordinate officers to assist the president in his executive duties. In the exercise of their often-considerable authority, these executive branch officials remain subject to the president’s ongoing supervision and control. The president in turn is regularly elected by and accountable to the American people.”
In the next breath, however, the order claims some agencies — specifically, independent financial regulatory agencies like the U.S. Securities and Exchange Commission (SEC), the Federal Deposit Insurance Corporation (FDIC), and the Commodity Futures Trading Commission (CFTC) — have been given too much power and lack “sufficient accountability to the president.” The White House concluders that the goal of the order is to ensure “presidential supervision and control of the entire executive branch,” (emphasis added) including these independent agencies.
As AXIOS explained, while independent regulatory agencies are led by presidential appointees who often share the president’s philosophy (unless their term straddles two administrations), once they take their seats they have generally been “left to lead as they see fit.” If they disagree with the president, so be it. In fact, independent agencies’ power traditionally has been read to mean the ability to oversee the “writing of regulations and the enforcement of rules” — again, even if the president disagreed with the aim, scope, or specifics of a regulation — and to navigate “the politics of multimember boards with appointees from both parties.”
The goal of this structure, AXIOS noted, was to insulate independent agencies from politics and political considerations.
President Trump’s order would eliminate that independence, upending nearly a century of policy precedent. “Congress and presidents of both parties have created regulatory agencies structurally independent of the president because the bipartisan consensus for generations has held that this was in our economic interest,” Aaron Klein, a senior fellow at the Brookings Institution, told AXIOS, “This executive order upends that multigenerational bipartisan consensus.”
Both President Ronald Reagan and President Bill Clinton issued executive orders that required White House regulatory review for certain agencies, but even those orders exempted independent regulatory agencies from their mandates.
What Does “Ensuring Accountability For All Agencies” Actually Do?
President Trump’s order calls for three specific changes:
- For independent regulatory agencies to submit all proposed regulations to the White House’s Office of Information and Regulatory Affairs (OIRA), an agency that is housed within the Executive Office of the President (EOP), before taking any other steps to pursue them;
- For the Office of Management and Budget (OMB), another office housed within the EOP, to set performance standards and objectives for independent regulatory agency heads; and
- For the OMB to adjust the budgets of these independent agencies, including stopping them from spending money on particular activities.
As an article in the National Law Review explained, without offering specifics for how to do so, the executive order also “requires independent regulatory agency chairpersons to regularly consult with and coordinate policies and priorities with OMB directors, the White House Domestic Policy Council, and the White House National Economic Council.” In other words, the agencies need to discuss the details of their work with White House Deputy Chief of Staff Stephen Miller, who also oversees the DPC, and OMB Director Russell Vought, who is considered the architect of President Trump’s plan to reduce the size and scope of the federal government.
The order does appear to preserve the Federal Reserve’s independence, at least when it comes to setting monetary policy.
Why does the order leave the Fed alone? According to AXIOS it’s because “The Fed’s independence from direct political influence is more deeply established in law and precedent than some of the discussion around Trump’s assertion of power might suggest.” Specifically, AXIOS noted, the Federal Reserve Act, which was approved by Congress 112 years ago, describes clear authorities for the Fed’s Board of Governors and makes no mention of White House review. The law even gives the Fed the power to set its own budget, and it “lays out a series of authorities held by the board, sets the structure of hybrid public-private reserve banks across the country, and empowers the Federal Open Market Committee to set monetary policy.”
Former Federal Reserve Vice Chair of Supervision Michael Barr warned last week that the order could give the White House broader authority over Fed rulemaking and its oversight of the financial industry. “I don’t think we want other entities saying that we should or shouldn’t issue an enforcement action on a bank for a violation of the law,” Barr said. “Independence has been an absolutely critical principle, in my judgment, one that ought to be respected.”
What Will Happen To This Order In The Courts?
Public Citizen, a progressive advocacy group, has called President Trump’s executive order “illegal” and a “giant gift to the corporate class.” Co-President Robert Weissman added, “This is a profoundly dangerous idea for the nation’s health, safety, environment and economy — and for our democracy. Congress made independent agencies independent of the White House for good reason.”
Still, one week after it was issued, we have yet to see a legal challenge to the order filed.
Of course, silence so far does not imply independent regulatory agencies and the companies they oversee, along with organizations like Public Citizen, have consented. So: what’s likely to happen if this order is challenged in federal court?
According to the National Law Review article cited above, federal courts can strike down presidential executive orders for two reasons:
- Where the president lacks the authority to issue the order; and
- Where the order is prima facie unconstitutional in substance.
The article warned that while the constitutionality of executive orders has been challenged, “federal courts have been cautious to overstep into the powers of another branch.”
Indeed, legal observers who talked to The Hill believe the courts also will be reluctant to overturn President Trump’s independent agency order. More likely, according to scholars, the legal wrangling over the order “could set the stage for the Supreme Court to overturn its 90-year-old precedent of Humphrey’s Executor v. United States, which has enabled Congress to protect certain independent agency leaders from termination without cause.” That case arose after then-President Franklin D. Roosevelt fired Federal Trade Commission (FTC) member William Humphrey for not supporting the New Deal. Humphrey died before the Supreme Court could decide the case, but the executors of his estate continued the litigation and ultimately prevailed. The court ruled the FTC’s removal protections were constitutional, so Humphrey’s firing was not allowed.
The Trump administration is trying to avoid a similar ruling. In fact, according to CNN, the reason the order largely exempts the Fed from White House oversight is because the Trump administration “is attempting to avoid a legal confrontation that might go too far for a conservative Supreme Court.”