The Constitution vs. the administrative state.
The Constitution vs. the administrative state
Author’s note: This is the second of a two-part series on why President Trump’s firing of executive-agency inspectors general foreshadows a battle to restore constitutional norms — in particular, separation of powers and political accountability — that would threaten the administrative state as it exists after over a century of progressive governance. Part 1 is here.
I n part 1 of this two-part series, I outlined the controversy over President Trump’s firing of executive-agency inspectors general in contravention of the removal terms in the statute — the Inspector General Act of 1978 — by which Congress created these IG positions. Here in part 2, I’ll address the constitutional stakes and why they are foundational to how our government works.
That Congress may place no limits on the president’s power to fire those who wield executive power is firmly established — or at least it was until the New Deal era when, ironically, it was denied to President Franklin D. Roosevelt by the Supreme Court’s New Deal skeptics. While this result enraged FDR at the time, fueling his Court-packing ambitions, it nevertheless significantly advanced his progressive overhaul of the federal government.
The Constitution mandates that executive officers may not be appointed absent Senate consent; it says no such thing about their termination. The general rule of Article II is that all executive power is vested in the president; the Senate’s “advice and consent” role in appointing executive officers is an express constitutional exception to that general rule. The exception, therefore, must be narrowly construed. If the Framers had wanted to require Senate consent for the termination of executive officers, in addition to the appointment of such officers, they’d have said so.
This understanding was affirmed by the first Congress in what is known as the “Decision of 1789.” As the Supreme Court later observed in Myers v. United States, James Madison and other representatives noted that if Congress were permitted to restrict the president’s removal authority, it would have
the means of thwarting the Executive in the exercise of his great powers and in the bearing of his great responsibility, by fastening upon him, as subordinate executive officers, men who by their inefficient service under him, by their lack of loyalty to the service, or by their different views of policy might make his taking care that the laws be faithfully executed most difficult or impossible.
Myers was a 1926 case. The Court’s recounting of the Decision of 1789 was necessary because the case involved a novel statute that purported to prohibit the president from firing postmasters — executive branch officials — without the advice and consent of the Senate. The Court, in an opinion by Chief Justice (and former president) William Howard Taft, ruled that “the power to remove officers appointed by the President and the Senate vested in the President alone.”
Very straightforward under the Constitution. But change was in the air. The Progressive Era had already dawned with the creation of independent regulatory agencies — i.e., purportedly independent of the executive or any other single branch of government. This began as an aberration: the creation in 1887 of the Interstate Commerce Commission, in reaction to public outcry over railroad industry rates and unfair practices, coupled with a Supreme Court ruling (in the 1886 Wabash case) that the states were powerless to do anything about it since only Congress could regulate interstate transportation. But 26 years later, the nation elected President Woodrow Wilson, a progressive Democratic academic openly skeptical about the Constitution’s continuing vitality, in the odd but momentous election of 1912 (in which the Republican vote was split between the incumbent president, William Howard Taft, and his former patron turned rival, Theodore Roosevelt, the former president and himself a progressive crusader). Within two years, the Federal Reserve and the Federal Trade Commission were established.
Consequently, when the question whether a president could lawfully remove a government official reared its head again nine years after Myers, at issue was not a postmaster but an independent agency bureaucrat — William Humphrey, a cantankerous FTC commissioner. The result was a fateful wrong turn, Humphrey’s Executor v. United States (1935), a bewildering Supreme Court decision justifiably regarded as a catalyst for today’s administrative state.
The FTC’s 1914 enabling statute purported to limit the president’s authority to fire commissioners to three causes — inefficiency, neglect of duty, or malfeasance in office. Commissioner Humphrey had been appointed by President Herbert Hoover. FDR, Hoover’s successor, asked for Humphrey’s resignation, not for cause but so that he could name his own loyalist to the FTC. (You thought Trump was the first president to want loyalists in key posts?) Humphrey refused. Finally, in 1933, FDR fired him. Humphrey declined to accept the termination, insisting that he remained entitled to perform the duties and collect the salary of a commissioner because FDR had flouted the statute. Humphrey died four months later, and the executor of his estate sued to collect his unpaid salary.
When the case landed in the Supreme Court, Myers should have been the beginning and the end of the analysis. But Justice George Sutherland, one of the “Four Horsemen” — an epithet FDR’s administration branded on the conservative justices who thwarted New Deal legislation — authored a bizarre opinion for the Court. Despite the separation of powers rationale for the president’s statutory power to appoint FTC commissioners — namely, that they exercised enforcement authority, a quintessentially executive function — Justice Sutherland reasoned that the FTC was more a “quasi-legislative” and “quasi-judicial” entity that made reports for Congress and functioned as an adjudicative body. Therefore, the theory went, it was not truly an arm of the executive, rendering Myers and the president’s unlimited power to fire executive officers inapposite.
That this was utter nonsense was recognized by none less than the legendary Robert Jackson, the attorney general for FDR who later named Jackson to the Supreme Court. In a 1952 dissent (in FTC v. Ruberoid Co.), Justice Jackson observed:
Administrative agencies have been called quasi-legislative, quasi-executive or quasi-judicial, as the occasion required, in order to validate their functions within the separation-of-powers scheme of the Constitution. The mere retreat to the qualifying ‘quasi’ is implicit with confession that all recognized classifications have broken down, and ‘quasi’ is a smooth cover which we draw over our confusion as we might use a counterpane to conceal a disordered bed.
Based on Humphrey’s Estate, Congress has been emboldened to set separation of powers aside and create administrative agencies that simultaneously exercise executive, legislative, and judicial powers — exactly the roadmap to tyranny the Framers feared in forbidding the agglomeration of those powers in a single set of hands, to say nothing of hands that are politically unaccountable. A big part of this has been placing conditions on the president’s removal authority, rationalizing that these agencies are “independent,” rather than executive, notwithstanding their enforcement powers.
In more recent years, there has been pushback against this theory. In Free Enterprise v. Public Company Accounting Oversight Board (2010), the Court held that the Constitution’s separation of powers principles were transgressed by statutory restrictions on the president’s authority to remove members of the Public Company Accounting Oversight Board (which had been created by the 2002 Sarbanes-Oxley Act in overreaction to Enron and other corporate accounting scandals). And a decade later, in Seila Law (2020), the Court similarly stuck down the removal terms of the 2008 Dodd-Frank Act (an overreaction to the mortgage-loan crisis, which led to the financial meltdown that emerged in 2007); those terms violated separation of powers by purporting to prevent the president from firing the director of the Consumer Financial Protection Bureau in the absence of “inefficiency, neglect of duty, or malfeasance.”
In a partial Seila Law concurrence, Justice Clarence Thomas was joined by Justice Neil Gorsuch in faulting the Court for not going far enough — i.e., for not taking the essential step of overruling Humphrey’s Executor, rather than continuing to marginalize a patently erroneous decision that had proved so corruptive of our constitutional order. Tracing the history marshaled above, and quoting Justice Antonin Scalia’s prescient dissent in Morrison v. Olson (1988), which warned of the wages of deviating from separation of powers and political accountability, Justice Thomas wrote:
Humphrey’s Executor laid the foundation for a fundamental departure from our constitutional structure with nothing more than handwaving and obfuscating phrases such as “quasi-legislative” and “quasi-judicial.” Unlike the thorough analysis in Myers, the Court’s thinly reasoned decision is completely “devoid of textual or historical precedent for the novel principle it set forth.”. . . The exceptional weakness of the reasoning could be a product of the circumstances under which the case was decided — in the midst of a bitter standoff between the Court and President Roosevelt — or it could be just another example of this Court departing from the strictures of the Constitution for a “more pragmatic, flexible approach” to our government’s design. . . . But whatever the motivation, Humphrey’s Executor does not comport with the Constitution. [Citations and footnote omitted.]
Administrative agency should not be a barb, but neither should political accountability. A government for a free society in a complex modern world must have both. For too long, we haven’t: We have been ruled by a maze of agencies staffed by faceless bureaucrats whose ratchet gear spins relentlessly leftward because it seems no inside administrator is identifiably responsible for it and no outside elected official has the power to stop it.
Today’s Supreme Court has done much of the scutwork to restore constitutional order by curtailing the extent to which administrative agencies may stretch their statutory warrants beyond recognition and even define their own authority. But to be constitutionally legitimate, they must function in the separation of powers framework. That means: If they exercise enforcement power, they may not function as agents of Congress and they must be removable at will by the chief executive — the president who is politically accountable to the American people.
President Trump’s removal of inspectors general, in quite intentional disregard of Congress’s presumptuous fetters, is not a spat. It is a vital part of the debate about whether we will rule ourselves democratically or be ruled administratively.