A Farewell to the Separation of Powers?

W hen Trump v. Slaughter is argued before the Supreme Court next week, it could mark a turning point in the history of the United States government. As it’s described in the media, the case doesn’t sound revolutionary. However, if the Court decides that President Trump can remove and replace the members of the Federal Trade Commission, he and future presidents will be able to take control of the 20 or so independent regulatory agencies that today oversee important and specialized sectors of the U.S. economy. This will add substantially to the power of the presidency, while diminishing the ability of bipartisan expert commissions to handle the challenges posed by modern commerce. 

The U.S. Constitution is based on a concept called the “separation of powers,” by which Congress, the presidency, and the judicial system each have specific and distinct governmental roles. The separation of powers itself is not mentioned in the Constitution, but the entire document — and the government structure it underlies — is based on the principle that the liberty of the people can be assured only if the legislature, the presidency, and the judiciary are able to function separately from one another.  

As conceived by the nation’s founders, that didn’t mean that the branches couldn’t cooperate — they have to — but it did mean that none of the parts could perform the functions of the others. Congress could enact taxes but couldn’t collect them; the president could enforce laws but couldn’t create them; and the courts could interpret the laws but couldn’t make them.  

But as the U.S. economy became more complicated, innovations were necessary. In 1887, to deal with interstate commerce issues created by the new railroads, Congress created the Interstate Commerce Commission. The problems of interstate commerce were novel, and not amenable to state regulation; even federal laws were difficult to enforce as railroads passed from one jurisdiction to another. The ICC was designed to deal with this problem — a multi-member commission authorized to make rules and settle disputes in a consistent way that courts could not — expeditiously, knowledgeably, and nationwide. In structure, the ICC was not conceived as part of the executive or legislative branches. It was an ingenious hybrid: a bipartisan body of experts assigned to regulate a specialized field of commerce. 

The initial success of the ICC made clear that this innovation was usable in dozens of ways, especially as new kinds of commerce — in communications, deposit insurance, securities regulation, and many other areas — became available, and Congress set about creating many other multi-member commissions to deal with the special problems of regulating and licensing these and other sectors of the economy. Today, there are around two dozen of these independent regulatory agencies. The patterns are roughly the same — a multi-member bipartisan board made up of individuals with specialized knowledge about the industry involved would make the rules and regulations for these industries. And each member would be appointed for staggered terms, removable from office only for malfeasance. 

Initially, these commissions were not considered part of either the executive or legislative branches, but in 1935, President Roosevelt sought to take over the Federal Trade Commission. FDR’s argument was that the FTC was engaged in executive functions, and he — as president — had the responsibility to control the executive branch. The controversy reached the Supreme Court, and in a 9–0 decision, the Court turned FDR down, arguing that the FTC had more than executive functions: It also had powers that were adjudicatory (to decide cases before it) and legislative (to make binding rules within the limits set by Congress).  

After that case, the issue seemed settled — until, of course, the second Trump administration. Trump argued that he, like FDR, should be able to control the FTC, and he started by firing then–FTC commissioner Rebecca Slaughter, who held a Democratic seat on the commission. 

Immediately, the issue again became whether the FTC was engaged in executive activities, and that is how the case — now known as Trump v. Slaughter — reached the Supreme Court. Both sides are arguing about whether the FTC is an executive agency, because some of its activities are executive, even though — as the Supreme Court said in 1935 — its activities also involve judicial and legislative elements. 

Readers would not be wrong to think that this is an overly simplistic way of looking at what each branch of government does. There is nothing in the Constitution that says all activities of the government that could be styled as “executive” have to be controlled by the president. The only thing the Constitution says is that the president has “executive Power,” whatever that means.  

The Constitution most definitely doesn’t say that every institution or agency that Congress creates under this authority must be controlled by the president. Yet because the 1935 case was argued on the basis that the FTC’s authority was “executive,” this is the issue again before the Supreme Court. The only difference between today’s case and the 1935 case is that President Trump has appointed a larger percentage of today’s Supreme Court than FDR had in 1935, so he has a better chance of winning.  

Anyone can see how destructive this is. The Constitution creates three separate powers — legislative, executive, and judicial. It doesn’t suggest that they can’t be mixed at the operational level, or that such a mixture would create a constitutional problem, or — even less important — would create a question about who has power to control an agency.   

Congress, which has the authority under the Constitution to regulate interstate and foreign commerce, created the FTC to regulate trade. Before that, it had created the ICC to control surface transportation. When that was no longer necessary, Congress eliminated the ICC. If an agency isn’t performing well, Congress can change it. During all the years the ICC existed, no one ever suggested that it should be controlled by the president.

Why is it that today the president should control the FTC and — by extension — the 20 or so other independent regulatory agencies that have been created by Congress after the ICC? It’s a baseless idea, flowing from the accretive ambitions of yet another aggressive president, and it has a chance of winning only because something called the “unitary executive” idea — which enhances the power of the presidency — seems to have captured a current majority of the Supreme Court.  

Congress — and only Congress — has authority under the Constitution to regulate commerce, and it should be able to establish any organizational structure it wants to carry out this assignment. As the 20-plus independent regulatory agencies that exist today have shown, they can function responsibly on their own; their control by the president would simply mean more seats for the current and future presidents to fill with yet more obedient loyal followers.  

There is no way that Congress can create new or responsive governmental or regulatory bodies if it has to conform to a rigid structure for their control and regulation. This is especially true when the president’s authority is derived from something as evanescent as the Constitution’s term “executive Power,” which — without any standards or restrictions — simply enables an aggressive president to claim more power.   

Nothing more clearly shows how problematic Trump’s argument is than the question of what we will do about the Federal Reserve if the Court decides to hand the FTC and other independent agencies over to the president. The Fed is exactly the same as the FTC, except that we realize in the case of the Fed that serious problems would abound if any president got to control it. So the Supreme Court — if it gives control of the FTC to the president — will then have to make up some reason why the president can’t control the Fed as they have allowed him to control the FTC and other independent agencies.  

That will be interesting for lawyers and constitutional scholars to watch, but if the Court allows the president to control the FTC, it will forever change the constitutional balance of the U.S. government and cement the presidency as the government’s dominating power.