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109 Cornell L. Rev. 843 (2023-2024)
Article II and the Federal Reserve

handle is hein.journals/clqv109 and id is 859 raw text is: ARTICLE II AND THE FEDERAL RESERVE Aditya Bamzait & Aaron L. Nielsontt The Supreme Court has twice held since 2020 that statu- tory restrictions on the President's removal power violate Article II of the U.S. Constitution. Because such removal restrictions create a measure of policy independence from the President, these cases have prompted discussion about the future of independent agencies generally, with special attention to the Federal Reserve in particular. The Federal Reserve is the most powerful central bank on earth and, arguably, the most impor- tant independent agency in the United States. A presidential removal power over Federal Reserve officials calls into ques- tion the independence of monetary policy. Drawing on overlooked documents and congressional debates, this Article offers a comprehensive assessment of the Federal Reserve's constitutionality under Article H. We con- clude that under the Court's modern precedent, which requires Congress to clearly state when it wishes to restrict removal, the President likely already enjoys a great deal of statutory author- ity to remove the Federal Reserve's leaders. Beyond that, in light of the Federal Reserve's current structure and functions, the President might have constitutional authority to do so. To the extent the Federal Reserve exercises inherently executive power-such as initiating enforcement actions, issuing fines, and promulgating consumer-protection rules-precedent sug- gests that Congress cannot prevent the President from freely removing the Federal Reserve Chair, members of the Board of Governors, and perhaps other senior officials. But Congress could render the Federal Reserve's monetary independence constitutional. That is because the President's power tofire the Federal Reserve's leaders does not stemfrom its primary mission: monetary policy. Congress can use pri- vate bank operations to influence monetary policy, which is why the First and Second Banks of the United States were understood to be lawful even though the President could not t Martha Lubin Karsh and Bruce A. Karsh Bicentennial Professor of Law, University of Virginia School of Law. f Professor of Law, J. Reuben Clark Law School, Brigham Young Univer- sity. Professor Nielson served as Court-appointed amicus in Collins v. Yellen, 141 S. Ct. 1761 (2021). For helpful comments and encouragement, we thank Divya Bamzai, Kent Barnett, Peter Conti-Brown, John Harrison, Adam White, David Zaring, Jeffery Zhang, participants in the 2023 Wharton Financial Regulation Conference, and the editors of the Cornell Law Review. All errors are our own. 843

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