WASHINGTON — President Donald Trump has taken steps to enhance White House oversight of independent federal regulatory bodies, including the Securities and Exchange Commission, the Federal Trade Commission, and the Federal Communications Commission. This move, formalized through an executive order signed on Tuesday, aims to grant the president increased authority in managing financial system oversight, as well as in establishing guidelines for transportation safety, consumer protection, and various communication sectors like broadcast, broadband, and satellite.
This action is part of a larger initiative by the Trump administration to assert more control over different government entities, which may lead to limitations on how congressionally approved funds are spent, potentially inviting legal challenges and judicial scrutiny. Historically, previous administrations have valued the independence of regulatory agencies, allowing them to act in the nation’s long-term interest away from immediate political influences. While presidents could indirectly influence these agencies through appointments, they typically did not require these organizations to align closely with White House strategic goals or funding criteria.
The Trump administration argues that such independent regulators may hinder the president’s policy agenda and undermine the voice of the electorate. According to the order signed by Trump, “For the Federal Government to be truly accountable to the American people, officials who wield vast executive power must be supervised and controlled by the people’s elected President.” This initiative has faced pushback, suggesting it could lead to misuse of power by the administration.
Critics, like Alexandra Reeve Givens, CEO of the Center for Democracy & Technology, expressed concerns that this move could politically taint independent agencies, subjecting them to the fluctuating demands of those in power. “For a century, these agencies have been independent for a reason — Congress needs these experts to interpret the laws it passes and enforce those laws without political favoritism,” Givens stated.
The concept of independent agencies dates back to 1887, with the formation of the Interstate Commerce Commission to regulate railroad monopolies. Numerous agencies have since been modeled similarly, functioning with presidential appointments and legislative oversight. Roger Nober, a George Washington University professor and director of the GW Regulatory Studies Center, labeled the executive order as “very significant,” noting that it expands beyond existing mandates that require larger regulations to be reviewed by the White House Office of Management and Budget.
Nober acknowledged the rationale behind seeking greater control over regulators like the SEC, but questioned the long-term implications of such a strategy on the independence of regulatory agencies. The executive order also addresses the Federal Reserve’s regulatory duties but safeguards its autonomy regarding short-term interest rate decisions that impact inflation and employment. A spokesperson for the Fed opted not to comment on the executive order at this time.
The practical effects of the order might be limited in the near future. The Fed’s vice chair for supervision, Michael Barr, who was appointed by President Biden, is expected to depart on February 28. Additionally, the Fed has indicated plans to stall any significant rulemaking until Barr’s successor is confirmed.
Policy analyst Ian Katz from Capital Alpha suggested that legal challenges might be a deliberate goal behind the order, noting, “The White House and conservatives not only expect, but want, legal challenges to the executive order. They would like a Supreme Court ruling that further solidifies executive branch authority over the agencies.”
Under the new order, the Office of Management and Budget will be responsible for establishing performance standards and management objectives for the leadership of independent agencies. It can also adjust funding for these agencies based on activities that conflict with the president’s priorities. Furthermore, the heads of independent agencies will be required to engage with designated White House liaisons to communicate effectively with presidential advisers and aides.
