Throughout this week, the Washington Examiner’s Restoring America project will feature its latest series titled “Reforming the Deep State: Reining in the Federal Bureaucracy.” We invited some of the best policy minds in the conservative movement to speak to the issues of what waste, fraud, abuse, and unaccountability exist throughout the federal government and what still needs to be done. To read more from this series, click here.
For over a century, the Federal Reserve has wielded immense influence over America’s economy, shaping interest rates, credit, and financial stability. Yet its most powerful official, the chairman, operates under a veil of “independence” that too often shields mismanagement from accountability. That is neither what the Constitution envisioned nor what people deserve.
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Federal Reserve Chairman Jerome Powell’s tenure illustrates why this shield should be reexamined. From sluggish responses to inflation, earning him the label “Too Late Jerome Powell,” to overseeing record multibillion-dollar operating losses, Powell’s leadership failures are not abstract. They have real consequences for U.S. households and businesses. To make matters worse, he has presided over a $2.5 billion headquarters renovation marred by cost overruns, luxury upgrades, and misrepresentations to Congress.
Article II vests “the executive Power” solely in the president, who must “take Care that the Laws be faithfully executed.” In Myers v. United States, the Supreme Court held that this power includes removing those who act on the president’s behalf. Without removal authority, the president cannot be held politically accountable for the execution of federal law — the very outcome Alexander Hamilton warned against in Federalist No. 70.
While Congress can grant certain agencies a measure of operational independence, Seila Law v. Consumer Financial Protection Bureau made clear that single-headed agencies exercising core executive power cannot be insulated from presidential control. According to statute, the chairman of the Fed’s Board of Governors is the “active executive officer” who directs enforcement, regulation, and economic governance on a national scale. If the president can remove a CFPB director, the logic applies with equal force to the Fed’s top official.
The Federal Reserve’s defenders cite history and “for-cause” statutory language in 12 U.S.C. § 242. But history is not constitutional law. The early Banks of the United States were private corporations, not immune public agencies. The 1951 Treasury-Fed Accord was a political agreement, not a judicial decree. And the Seila Law footnote musing about the Fed’s “special arrangement” was dicta — a passing comment, not binding precedent.
Even under the “for-cause” standard, Powell’s conduct meets the threshold. In June, he testified to Congress that the Fed’s renovation plans did not include rooftop gardens, marble finishes, or private elevators. But official National Capital Planning Commission records show these features were in the original plans. Providing knowingly false testimony to Congress violates federal law and undermines the integrity of the office.
YES, TRUMP CAN FIRE BUREAUCRATS WHO BLOCK HIS AGENDA
Moreover, Powell failed to notify the NCPC of significant deviations from approved plans, a likely violation of the National Capital Planning Act. Such actions qualify as mismanagement and neglect of duty — explicit grounds for removal under the Federal Reserve Act. As Office of Management and Budget Director Russ Vought stated in a formal letter, Powell’s actions fell materially below the standards expected of his position, and the president was “extremely troubled.”
The resistance to holding Powell accountable is not just about economic or executive theory — it is about entrenched bureaucratic power. Washington’s permanent class is adept at building procedural fortresses to protect its own, whether through obscure statutory interpretations or politicized claims of “independence.” None of this is accidental. If an unelected official is seen as ideologically aligned with the permanent bureaucracy, layers of supposed “independence” are invoked to shield them from consequences. This reflex to insulate insiders is precisely why the framers of the Constitution vested removal authority in an elected president. No official steering the nation’s monetary policy should be beyond reach.
The deeper legal obstacle is the Supreme Court’s 1935 decision in Humphrey’s Executor v. United States, which carved out protections for certain “independent” officials. That case departed from Myers and has fueled a century of agency autonomy at odds with democratic accountability. Humphrey’s has been narrowed repeatedly: in Free Enterprise Fund v. Public Company Oversight Board, in Seila Law, and most recently in Trump v. Wilcox, in which the court allowed the president to remove members of the National Labor Relations Board and Merit Systems Protection Board without cause while litigation proceeded. The trajectory is clear: The court is open to restoring the full scope of Article II removal authority.
Critics warn that removing a Fed chairman would jeopardize monetary stability. History proves otherwise. Leadership changes, from Marriner Eccles to William McChesney Martin, have happened without sparking financial collapse. The Fed’s operational independence in setting interest rates does not depend on personal immunity for its chairman.
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What does threaten stability is allowing a principal officer to remain in office after deceiving Congress and flouting federal law. Independence in policy is not independence from accountability.
The president has more than one option. He can remove the chairman he appointed under Article II as a principal officer serving at his pleasure. Alternatively, he can remove the chairman for cause under 12 U.S.C. § 242, citing neglect of duty or misconduct. The legal arguments for each are strong, and recent judicial trends have shifted toward broader presidential removal authority. Whether to exercise that power is a matter of judgment, but the Constitution ensures that the option exists and that the decision rests with the one official elected to represent the entire nation.
Benjamin Osborne is a legal fellow at the Center for Renewing America.