Week 23: The Fourth Branch Falls

Max: Okay, so here's the thing. For 90 years, a chunk of the federal government has basically been off limits to whoever sits in the Oval Office. Can't fire them, can't touch them, and that is about to change. Blake: And we're not talking some fringe legal footnote. CNN is reporting the Supreme Court is racing to close out 23 cases this month, and a lot of them are about exactly that, who controls the executive branch. Max: Right, so welcome back to the Common Thread. I'm Max. Blake: And I'm Blake. And this week, honestly, it's one of those episodes where all the stories are actually the same story. Max: Yeah, they really are. So here's what we're getting into today. There's a 1935 Supreme Court case called Humphrey's Executor, 9-0, that created the whole idea of the independent agency. We're going to trace how that precedent got here and how Trump v. Slaughter is about to either finish it off or keep it on life support. Blake: And we'll dig into what the FTC firing actually looked like. looked like on the ground. Trump fired two commissioners in March 2025. SCOTUS blocked reinstatement before the merits were even decided. There's a buried question in that case about whether courts can reinstate wrongly fired officials at all. That one doesn't get enough attention. Max: Dude, nobody's talking about that second question. And then we'll zoom out. Birthright citizenship arguments, the tariff ruling, agency independence, and walk through why these aren't three separate f***ers. These fights share one constitutional framework. Blake: Plus the Fed. Lisa Cook. No president had ever moved to fire a Fed governor in 112 years of the central bank's history. Until now. We'll look at what's actually at risk there. Max: And we'll close with something concrete: actual steps you can take this week before the rulings drop. All right, let's get into it. Here's something your cable news anchor is not going to say out loud this week: the federal agencies that regulate your food, your employer, your cell phone carrier, and your retirement savings have been legally insulated from the president you voted for since 1935. The Supreme Court is about to change that. Blake: Wow. Max: The question is whether that's a constitutional correction or the start of something scarier. Blake: Welcome to the Common Thread. I'm Blake. Max: And I'm Max. And yeah, we're just going to start right there. Blake: Because honestly, where else do you start? CNN reported this week that the court is racing to decide 23 cases before the end of the month. Twenty-three! Max: 23, too. That's not a docket, that's a pile-up. Blake: And buried inside that pileup is a ruling that could touch basically everything, the FTC, the NLRB, the CPSC, the Merit Systems Protection Board. According to NBC News, the court heard oral arguments on whether Trump had the authority to fire FTC Commissioner Rebecca Kelly Slaughter without cause. Max: And so the legal shelter these agencies have been hiding under... That goes all the way back to a 1935 Supreme Court case called Humphrey's Executor. Ninety years. These agencies have operated at arm's length from the president for ninety years. Blake: Walk me through what that actually means for a normal person. Max: Okay, so like the FTC sets rules about what companies can and cannot do to you as a consumer. The NLRB is the referee on whether your employer can fire you for organizing. I Blake: see. Right. Max: The president you elected has had basically zero authority to fire the people running those shops; your vote didn't reach that far. Blake: That's interesting. And CBS News laid out the full stakes this week, noting that justices are also sitting on birthright citizenship and transgender athlete bans. But the agency power case sits underneath it all. Max: Because if the president can fire anyone at any of these agencies, the whole architecture shifts. And here's the thing. Chief Justice Roberts already called Humphrey's Executor, and I'm quoting here, a dried husk during oral arguments back in December. Blake: A dried husk. That's not exactly a ringing endorsement of keeping the president alive. Max: No, no, it is not. Blake: So how do we even get here? How does a 90-year-old case become the load-bearing wall of the entire federal government, and why is it about to come down? Max: That's exactly the right question, and the answer goes back to FDR, a guy named William Humphrey, and a firing that the Supreme Court said was illegal. So here's the origin story. In 1933, FDR fires William Humphrey from the FTC, not for misconduct, not for neglect, for policy disagreement. Humphrey refused to leave, Blake: just kept showing up to work. Max: kept showing up collecting a salary, Blake: Roosevelt fired him anyway. Humphrey died the next year and his estate sued for back pay. Max: And the Supreme Court sided with the estate. Blake: 9-0 said Congress can write laws that protect agency commissioners. Commissioners from being fired without cause-that's where it came from, that one lawsuit. Max: Okay, but wait-didn't Congress set these agencies up intentionally? Like, the whole point is you want someone at the Antitrust Commission who isn't just doing whatever the White House wants that week. Blake: That's the intuitive read, and I get it. But here's where it runs into the Constitution. Article II says the President shall take care that the laws are faithfully executed. If an agency is writing rules, in forcing them, hauling companies into court, and the President cannot touch the people running it, who exactly is accountable to voters? Max: So the argument is: Congress created a fourth branch nobody elected. Blake: That's the angle, and the Roberts Court has been stress testing that logic for sixteen years. Free Enterprise Fund in twenty ten. Seila Law against the CFPB in twenty twenty. Collins versus Yellen in twenty twenty one. Max: Huh? Speaker 3: Hm? Blake: Each time the court narrowed Humphrey's a little more. Max: So get this: by Seila Law, according to Lawfare's analysis of those cases, Roberts had confined Humphrey's to one specific type of agency: bipartisan, multi member, not wielding substantial executive power, which almost no modern agency fits. Blake: Right; because the FTC in nineteen thirty five was basically an advisory board. The FTC today Speaker 4: is a vast administrative agency with broad enforcement powers, Blake: Today issues rules, enforcement actions, sues companies. SCOTUSblog noted the agency's formal powers have expanded dramatically since the Humphrey's Court assessed them. Max: So even before Trump fires anyone, the precedent is already hollowed out. Blake: That's the thing, and then Justices Thomas and Gorsuch go on record at oral argument calling the nineteen thirty five reasoning poorly constructed, two of the six conservatives publicly signaling direction. before the opinion even lands. Max: Which brings us to the actual incident: Trump fires Two FTC Commissioners in March, twenty twenty five. That's where the abstract constitutional debate becomes a real personnel decision-and that's the case sitting on the Court's desk right now. Blake: Trump versus Slaughter, and the answer the court gives changes the map for every one of those agencies going forward, whoever is President. Max: Right. Not a Trump story, a structural story. That part matters. So here's the actual incident log: March eighteenth twenty twenty five, Trump fires FTC Commissioners Rebecca Kelly Slaughter and Alvaro Bedoya—no cause cited. The FTC Act, which was written in nineteen fourteen, says you can only fire a commissioner for inefficiency, neglect of duty, or malfeasance. Trump's stated reason: "Their continued service was "inconsistent with my Administration's priorities. That's it. Blake: That doesn't meet the statutory standard. Max: Not even close. So Slaughter sues, the District Court reinstates her, two judges on the D C Circuit agree, and then SCOTUS blocks the reinstatement before the merits are even decided. Blake: Wait, hold on. The Supreme Court stepped in on the emergency docket before the case was fully heard. Max: Yeah, yeah, yeah. Chief Justice Roberts issues the Administrative Stay, the FTC now has three Republican Commissioners, And that's just the reality. Blake: Walk me through where the six conservative justices landed at oral argument. Max: All six signaled they're going Trump's way. Barrett said there's been an eroding of Humphrey's Executor. Gorsuch called the opinion poorly reasoned. Roberts already called it a dried husk. So if they rule as expected, any president can clean house across roughly twenty different independent agencies whenever they want. Blake: And here's where I want to slow you down, Max. Because cable news is going to bury this part. There's a second question in this case. Max: THE REINSTATEMENT QUESTION. Blake: Exactly. Even if a court says the firing was illegal, can a judge actually put someone back in their job? According to PBS News, Gorsuch wrote earlier this year that wrongly fired officials likely get back pay, but not reinstatement. Max: So you win in court and still lose your job. The firing just works. Blake: That's the operating system change right there. The legal remedy disappears. Max: And here's what nobody on cable news is saying, Blake: This isn't a Trump story. A Democratic president in twenty twenty-nine inherits these exact same powers. You want a progressive running the FTC with no independent commissioners? Same framework applies. Blake: That's the thing most people are missing: the structure changes regardless of who wins next. Max: It's like if your company's board designed a rule so the CEO could never fire Never fire department heads. Blake: Right. Max: From an operations standpoint, that sounds like a nightmare. But when you erase that rule, every future CEO gets those powers too. You've rewritten how the org chart works permanently. Blake: And the lawyers arguing this is strictly about executive accountability, let's pressure test that in twenty twenty nine. Max: Right. And that's what makes the next piece even more interesting, because this court isn't just pro Trump across the board. On tariffs and birthright citizenship, the same constitutional framework cuts the other direction entirely. So here's what I keep coming back to: three cases, same term, same court, and the outcomes are all over the map. Blake: Right. And that's actually the point. Max: Walk me through it. Blake: Okay, so in February the court struck down Trump's emergency tariffs in Learning Resources versus Trump, six to three. Roberts, Gorsuch, and Barrett in the majority, Trump's own appointees. He called them an embarrassment to their families. His own picks. Then, in April, birthright citizenship arguments. Roberts tells Solicitor General Sauer it's a new world; it's the same Constitution. Trump actually showed up to watch, first sitting president ever to attend oral argument. Max: Dude, that's a flex, or... and attempted intimidation. Blake: The justices didn't acknowledge him, and the signal still pointed against the Administration. So the court is two for two going against Trump, but then on agency independence all six conservatives signal they're siding with him. Exactly, and here's where I think people are reading it wrong. They see the tariff ruling and say, "The court is checking Trump." They see the agency ruling and say, "The court is empowering Trump." Both framings miss it. Max: So the court is just doing its thing, like consistently. Blake: That's interesting. Think about what connects all three cases. The major questions doctrine cut against emergency tariffs. Congress never authorized that power clearly. Originalism on the Fourteenth Amendment cuts against rewriting birthright citizenship by executive order. Speaker 3: Uh huh. Blake: And Article II originalism on the unitary executive cuts for presidential removal power over agencies. So the same theory produces different outcomes depending on which direction the power goes. Max: The power is flowing. Blake: Exactly; the court is not pro Trump; the court has a framework, and applied consistently that framework sometimes helps him and sometimes absolutely does not. Max: Which is basically what principled adjudication is supposed to look like, and people are acting shocked. Blake: The consensus trap strikes again. So what does that mean going forward, like practically? Whoever sits in that office in twenty twenty-nine inherits a president who can fire agency heads but cannot use emergency statutes to unilaterally set tariffs, and almost certainly cannot rewrite the Fourteenth Amendment by executive order. Max: More power in some rooms, hard walls in others. Blake: And those walls are now constitutional, not just political-that's the part that doesn't flip with the next election. Max: Which raises the obvious next question: If the court is drawing these lines on agency power, where exactly does the Federal Reserve fit? Because that's a different kind of independent institution entirely. Blake: And a much higher stakes one-that's what we need to go. So here's the balance sheet problem that keeps me up at night on this one. Markets have largely shrugged the "Cook case." The court signaled it would protect the Fed for now, but the Slaughter ruling, which lands this month, could reopen that question almost immediately. Max: Wait, walk me through that. How does Slaughter touch the Fed? Blake: Okay, so according to Lawfare—and this is the line that stops me cold—there is simply no principled way for the Supreme Court to retain the Fed's removal protections while overturning Humphrey's Executor for the FTC and NLRB. Rest. the same Article II logic applies to both. Max: So the court can't just carve out the Fed and call it a day. Blake: They tried to thread that needle already: in Trump v. Wilcox, the majority floated a special Max: A simple historical carve-out, calling the Fed a uniquely structured quasi-private entity, Lawfare called that originalist carve-out essentially unprincipled. Blake: Dude, that feels like building a legal wall out of foam. It looks solid until someone leans on it. Max: That's actually exactly right; and here's where I want you to think like a bond trader for a second, Max. Trump fired Lisa Cook in August, twenty twenty-five; mortgage fraud allegations (which Cook denied) and documents NBC obtained basically contradicted the claim. Blake: Right; so it was always a pretext question. Max: Exactly. Lower courts blocked it, the Supreme Court heard arguments January twenty-first, and the signal from Roberts and Barrett And Barrett was skeptical of the firing. Cook probably keeps her seat (for now), but what does the Slaughter ruling do to that protection six months from now? Blake: And what's the market actually pricing in here? Max: That's the thing: not much—yet; but the uncertainty itself has a cost. Former Fed chairs Greenspan, Bernanke, Yellen—they all filed briefs urging the court to block this. Jerome Powell called Cook's case perhaps the most important legal case in the Fed's one hundred and thirteen year history. Speaker 3: Wow! Blake: Okay, that's not a throwaway quote—that's Powell saying the institutional credibility that makes Treasury bonds attractive to foreign governments— The thing that props up dollar dominance is in play. Max: Right. You don't have to fire a Fed governor to move rates. You just have to make traders believe you could. That uncertainty is already a liability on the balance sheet, even if it hasn't shown up in the numbers yet. Blake: So the court might try to carve out the Fed, but legally there's no clean way to do it. That's the hidden structural risk sitting inside whatever ruling drops this month. Max: And that's the question that affects your mortgage rate, your savings. means the dollar in your pocket, which is exactly why what you do with this information matters, and that's where we're going now. Blake: So, practically speaking, what do you do with all this? Because I know, I know, call your senator sounds like the thing people say at the end of every civics video. But here's why this one actually has a specific mechanism. Max: Walk me through it. Blake: Okay, figure out which agency directly touches your life. You're in a unionized workplace? That's the NLRB. You work in tech, retail, FTC. You have little kids running around the house. CPSC. Then look up your two senators, because agency leadership gets confirmed by the Senate. Those confirmation votes just became way more consequential than they were six months ago. Max: Right, because whoever runs these agencies now serves at the President's pleasure. No more for-cause protection after Slaughter lands. Blake: Exactly. So your senator's vote on the next FTC chair is no longer a procedural formality. It's a policy vote. Max: The other thing I'd push on is the civic knowledge gap. Most Americans generally don't have a Speaker 4: much idea what their government is doing. Max: You have a mental model of how much of daily life is regulated by agencies that were never directly voted on: the speed limit on a drug label, the fire safety standard on your kid's pajamas, the overtime threshold for your paycheck-that all comes from rulemaking, not Congress. Blake: I, in the sound of "and," this gap is part of why rulings like this one land without context. People hear "independent agency" and their eyes glaze over. Talk to anyone under thirty in your life about this-seriously, not a lecture, just "here's the system, here's what's changing." Max: You'd be surprised how fast the conversation gets interesting once they realize it affects their job. Blake: Right? It stops being abstract real fast. Speaker 5: There! Max: Okay, and here's my closing thought on staying informed: rulings can drop any day between now and early July, according to SCOTUSblog, which has twenty three pending decisions still out. When that happens, Follow SCOTUSblog on the day, not cable news. Hard to agree. Blake: SCOTUSblog will have the actual opinion posted within minutes. Cable will spend four hours telling you how to feel about it. The opinion itself is maybe thirty pages. Read the syllabus at the front, it's usually one page, and you'll know more than most of the people talking on TV. That's actually a low bar, and also completely true. Max: That's the thing. This isn't complicated once you have the frame, Blake: Yeah. Max: and we spent today building the frame. Blake: Go build something with it. All right, that's a wrap on this one, and look, if there's one thing I want people to walk away with today it's this: Whoever wins the next election inherits every tool we talked about, Max: Mm hmm. Blake: every single one. Max: That's the frame, the accountability question we kept circling back to: If voters can't trace a rule back to someone they can remove, something's broken. That cuts in every direction. Blake: Right, and Blake, the Roberts dried husk moment? That one's going to stick with me. Max: As it should-ninety years of precedent-and that's the eulogy? Blake: Basically. Okay, so follow SCOTUSblog when these rulings drop. Seriously, go direct to the source. Max: And share this episode with one person who needs it. Subscribe so you catch us every Saturday. Blake: We genuinely appreciate you being here. Go do that one local thing. Your town needs you in the room. Max: See you next week.