After exploring why agencies need power, Gwen and Marc turn to how we keep that power honest. This episode explains why Congress sometimes chooses to bind the president’s hands in advance — creating institutions that can resist political pressure, maintain stability, and preserve public trust.
The episode opens with the now-infamous PAC-12 “boat call,” where a conference executive phoned in from a boat to overturn a targeting review. The result? Even well-intentioned interference shattered confidence in the process. Gwen uses that collapse of trust to launch into the core question: Why does Congress build entire agencies designed so the president can’t make that call?
Listeners follow the origins of independent agencies from the late 19th century to the creation of the FTC in 1914, using legislative history that reads like a blueprint for credibility: multi-member commissions, bipartisan composition, long staggered terms, and removal protections that prevent retaliation for unpopular decisions. These structural choices weren’t accidental — they were Congress’s way of acknowledging human nature. Power and temptation travel together, and even a well-meaning president will face short-term political incentives that clash with long-term stability.
Gwen and Marc walk through concrete examples — the Federal Reserve’s interest-rate decisions, the SEC’s role in policing financial markets, the FTC’s consumer protection mission — showing how independent agencies serve as referees who can’t be fired for making the right but unpopular call. They also situate these agencies in constitutional doctrine, from Humphrey’s Executor to Seila Law, previewing the Supreme Court’s upcoming confrontation with their very existence.
Ultimately, the episode reveals independent agencies as democracy’s pre-commitment system: guardrails Congress builds because it knows presidents — like Odysseus — may someday hear the siren song of short-term politics.
Key Concepts: Independent Agencies | For-Cause Removal | Multi-Member Commissions | Staggered Terms | Bipartisan Composition | Humphrey’s Executor | Seila Law | Unitary Executive Theory
Examples: PAC-12 replay interference | Federal Reserve | FTC in 1914 | SEC | CPSC | FERC | NLRB
Takeaway: Sometimes democracy protects itself by limiting its own future impulses. Independent agencies exist because stability, expertise, and long-term policy require insulation from the political storms of any single presidency.
🎧 Listen on Spotify | Apple Podcasts | remediespodcast.com
00:00:14 --> 00:00:17 Hello, and welcome to Administrative Remedies,
00:00:17 --> 00:00:19 because you can't fix what you don't understand.
00:00:19 --> 00:00:21 Brought to you in part by the University of Tulsa
00:00:21 --> 00:00:24 College of Law. I'm Gwendolyn Savitz, an associate
00:00:24 --> 00:00:26 professor here at TU and the associate dean of
00:00:26 --> 00:00:28 research and intellectual life. And I'm Mark
00:00:28 --> 00:00:31 Rourke. I'm the dean of the College of Law. We'll
00:00:31 --> 00:00:33 be breaking down complex doctrines with real
00:00:33 --> 00:00:35 -life analogies and examples to demystify the
00:00:35 --> 00:00:37 world of administrative law for everyone trying
00:00:37 --> 00:00:39 to understand how government actually works.
00:00:40 --> 00:00:41 Agencies are the main way the federal government
00:00:41 --> 00:00:44 gets things done. It's not through Congress for
00:00:44 --> 00:00:46 reasons we'll be addressing over the course of
00:00:46 --> 00:00:48 this series. Today, we're talking about independent
00:00:48 --> 00:00:51 agencies, what they are, why Congress created
00:00:51 --> 00:00:56 them, how their structure works, and why we're
00:00:56 --> 00:00:59 going to see them at the center of a major Supreme
00:00:59 --> 00:01:02 Court case soon. But first, let's start with
00:01:02 --> 00:01:05 a story about a man in a boat. Ooh, I like boats.
00:01:05 --> 00:01:10 Excellent. So tell me what you know about college
00:01:10 --> 00:01:14 football and replays. So they implemented the
00:01:14 --> 00:01:19 rule probably about 20 years ago that in certain
00:01:19 --> 00:01:22 instances, you can, as a coach, throw a flag.
00:01:22 --> 00:01:25 You can ask for a review of a play. Not every
00:01:25 --> 00:01:28 play is reviewable. Not every penalty is reviewable.
00:01:28 --> 00:01:31 Only certain kinds of plays are reviewable. Things
00:01:31 --> 00:01:34 like where the ball was placed can be reviewed.
00:01:35 --> 00:01:37 And intentional targeting on a play, that's always
00:01:37 --> 00:01:40 reviewable. But basic penalties like pass interference
00:01:40 --> 00:01:44 can't be reviewed at all. And one other that's
00:01:44 --> 00:01:47 definitely reviewable, if a player made a catch.
00:01:47 --> 00:01:51 But if you ask for a review and you get it wrong,
00:01:51 --> 00:01:53 you lose a timeout. So you only get a certain
00:01:53 --> 00:01:56 number of reviews per game. Would you say you
00:01:56 --> 00:01:59 trust the process generally? Usually, yeah. I
00:01:59 --> 00:02:01 mean, I disagree and I see calls that I'm like,
00:02:01 --> 00:02:04 well, that's a reasonable disagreement. There
00:02:04 --> 00:02:07 has been a time when trust completely collapsed.
00:02:07 --> 00:02:09 That's what we're going to be talking about.
00:02:09 --> 00:02:13 2018, there is a Pac -12 game. It's Washington
00:02:13 --> 00:02:16 State versus USC. They're reviewing whether a
00:02:16 --> 00:02:18 player should be ejected for a dangerous hit.
00:02:19 --> 00:02:21 Everything normal so far? Normal process. Like
00:02:21 --> 00:02:25 every intentional hit to the head is reviewed
00:02:25 --> 00:02:28 as a potential targeting call and could result
00:02:28 --> 00:02:31 in somebody being ejected from the game. So the
00:02:31 --> 00:02:34 difference was that in this case, the Congress's
00:02:34 --> 00:02:37 general counsel, who was also a VP there, called
00:02:37 --> 00:02:39 in from a boat to overrule the replay officials.
00:02:40 --> 00:02:43 Wait, from a boat? Like he wasn't even at the
00:02:43 --> 00:02:46 game? He wasn't in the replay center? He wasn't
00:02:46 --> 00:02:50 up in the booth? No, watching it apparently from
00:02:50 --> 00:02:53 the boat. And the officials had made their call.
00:02:53 --> 00:02:56 Then he interfered in real time to change it.
00:02:57 --> 00:03:01 That... Seems way outside the bounds of what
00:03:01 --> 00:03:05 is actually supposed to happen. Very much so,
00:03:05 --> 00:03:09 yes. This was absolutely a breach of Pac -12
00:03:09 --> 00:03:12 protocol. They admitted it happened afterwards,
00:03:12 --> 00:03:14 apologized and rewrote the policy so administrators
00:03:14 --> 00:03:17 couldn't do this. But by that point, the damage
00:03:17 --> 00:03:20 was done. Well, yeah, because once everyone knows
00:03:20 --> 00:03:25 that someone upstairs or on a boat can change
00:03:25 --> 00:03:29 the call, then... Every decision that you don't
00:03:29 --> 00:03:31 know how it's going behind the scenes becomes
00:03:31 --> 00:03:36 suspect. Yes, exactly. Everybody stops trusting
00:03:36 --> 00:03:38 the process. The fans, the coaches, the players.
00:03:38 --> 00:03:41 It becomes about who has the power to interfere.
00:03:41 --> 00:03:44 And with that, the integrity of the entire system
00:03:44 --> 00:03:47 collapses. Here's the thing, though. The guy
00:03:47 --> 00:03:49 who made that phone call presumably thought he
00:03:49 --> 00:03:51 was making the right call. Yeah, but that's exactly
00:03:51 --> 00:03:54 the problem. When you give people power, they're
00:03:54 --> 00:03:57 going to use it even when they shouldn't. Right.
00:03:57 --> 00:04:00 So thinking about this, instances where people
00:04:00 --> 00:04:04 put prior restraints in place. So literature
00:04:04 --> 00:04:06 version of that would be Odysseus and the sirens.
00:04:07 --> 00:04:09 Odysseus knew he wouldn't be strong enough to
00:04:09 --> 00:04:11 resist their song. He told his crew to tie him
00:04:11 --> 00:04:13 up, to ignore everything he said once he was
00:04:13 --> 00:04:15 tied up to the mast. And because he knew future
00:04:15 --> 00:04:18 him would make terrible choices. It's one of
00:04:18 --> 00:04:20 the oldest stories about self -control, admitting
00:04:20 --> 00:04:23 in advance that when temptation hits, you won't
00:04:23 --> 00:04:25 be able to resist. So you take away your own
00:04:25 --> 00:04:28 power before you can abuse it. That's what the
00:04:28 --> 00:04:31 Pac -12 people did after this incident. They
00:04:31 --> 00:04:33 wrote the rules to take away the administrator's
00:04:33 --> 00:04:36 power. But we have a similar idea in our government,
00:04:37 --> 00:04:39 except the president doesn't tie himself to the
00:04:39 --> 00:04:42 mast Congress does. So Congress is tying the
00:04:42 --> 00:04:46 president's hands in advance. Yes. So for certain
00:04:46 --> 00:04:48 areas, Congress has decided that we need to have
00:04:48 --> 00:04:51 independent agencies. Those are Congress's way
00:04:51 --> 00:04:53 of saying to the president, you are going to
00:04:53 --> 00:04:56 hear the siren call of short term politics. But
00:04:56 --> 00:04:59 when you do, your hands will be tied. So do you
00:04:59 --> 00:05:01 have a concrete example? Sure. The Federal Reserve.
00:05:02 --> 00:05:04 Anytime a president feels like the economy is
00:05:04 --> 00:05:08 getting wobbly, he could decide to cut race and
00:05:08 --> 00:05:11 boost the economy, help win him reelection. That's
00:05:11 --> 00:05:14 the temptation to call from the boat to say you're
00:05:14 --> 00:05:16 getting this wrong. Yes, exactly. So the president
00:05:16 --> 00:05:18 wants to be the guy phoning in to change the
00:05:18 --> 00:05:22 call. But. With the Fed, they can't. The president
00:05:22 --> 00:05:24 can appoint them, but once they're in office,
00:05:25 --> 00:05:27 they're independent. Even if the political pressure
00:05:27 --> 00:05:30 is enormous, the president literally cannot make
00:05:30 --> 00:05:33 that call. He can call and ask nicely, but he
00:05:33 --> 00:05:36 can't make them do anything. That's the point.
00:05:36 --> 00:05:39 We've created the system where the president's
00:05:39 --> 00:05:42 short -term desires can't win out over this desire
00:05:42 --> 00:05:45 for long -term stability in the area the independent
00:05:45 --> 00:05:48 agency regulates. So independent agencies are...
00:05:48 --> 00:05:51 Democracy's pre -commitment system. Not because
00:05:51 --> 00:05:52 we don't trust any specific president, although
00:05:52 --> 00:05:55 most people probably could name a president at
00:05:55 --> 00:05:57 some point they don't trust, but because we understand
00:05:57 --> 00:06:01 human nature. Power and temptation travel together,
00:06:01 --> 00:06:02 especially when you're in a position like the
00:06:02 --> 00:06:04 presidency where you're facing these enormous
00:06:04 --> 00:06:07 political challenges. However, not everyone agrees
00:06:07 --> 00:06:10 this structure is constitutional. That's what
00:06:10 --> 00:06:12 we're going to be looking at pretty soon. Okay,
00:06:12 --> 00:06:14 so before we go further, let me make sure I understand
00:06:14 --> 00:06:18 the basics. What exactly is an independent agency?
00:06:18 --> 00:06:23 An independent agency is an organization in the
00:06:23 --> 00:06:26 government that the president can appoint the
00:06:26 --> 00:06:28 members of, but the president cannot fire them
00:06:28 --> 00:06:31 at will. So the EPA administrator, head of FDA,
00:06:32 --> 00:06:35 they could be fired tomorrow. The FTC chair cannot.
00:06:36 --> 00:06:39 The members of the Fed cannot. So it's all a
00:06:39 --> 00:06:42 question about who has the power to remove. At
00:06:42 --> 00:06:45 its core, yes. As part of this protection, we
00:06:45 --> 00:06:48 have an entire structure. So the first real independent
00:06:48 --> 00:06:50 agency was the Interstate Commerce Commission.
00:06:50 --> 00:06:53 But we really think in general that the model
00:06:53 --> 00:06:55 sort of took off with the Federal Trade Commission
00:06:55 --> 00:06:59 in 1914. So what was going on in 1914 that made
00:06:59 --> 00:07:02 it necessary? At that point, Standard Oil had
00:07:02 --> 00:07:05 just been broken up. There's still the American
00:07:05 --> 00:07:07 Tobacco Trust, the meatpacking giants, the money
00:07:07 --> 00:07:10 trusts on Wall Street. Congress could see that
00:07:10 --> 00:07:13 unfair... Competition couldn't be handed over
00:07:13 --> 00:07:16 to whoever happened to be in office because each
00:07:16 --> 00:07:18 president had their own political incentives.
00:07:19 --> 00:07:22 And in part because they had also had an office
00:07:22 --> 00:07:24 in the executive branch directly that was supposed
00:07:24 --> 00:07:26 to be dealing with this and hadn't done a very
00:07:26 --> 00:07:29 good job. So why not just have the Justice Department
00:07:29 --> 00:07:31 handle it? These trusts were super powerful.
00:07:32 --> 00:07:35 They had money, influence and connections. If
00:07:35 --> 00:07:37 the president could fire anyone investigating
00:07:37 --> 00:07:39 them, every big business would just lobby the
00:07:39 --> 00:07:41 president to remove these troublesome prosecutors.
00:07:42 --> 00:07:44 They wanted referees who couldn't be removed
00:07:44 --> 00:07:46 just for making unpopular calls. These tend to
00:07:46 --> 00:07:48 be areas where there will be a lot of unpopular
00:07:48 --> 00:07:52 calls. And again, they could see that the predecessor
00:07:52 --> 00:07:55 of the FTC, the Bureau of Corporations, hadn't
00:07:55 --> 00:07:58 done its job, whereas the Independent Interstate
00:07:58 --> 00:08:01 Commerce Commission had broken the railroad robber
00:08:01 --> 00:08:04 barons. How did they decide to do it? All right.
00:08:04 --> 00:08:07 So this is part of the original FCC Act in 1914.
00:08:07 --> 00:08:10 Can you read this section? The commission shall
00:08:10 --> 00:08:12 be composed of five commissioners who shall be
00:08:12 --> 00:08:14 appointed by the president by and with the advice
00:08:14 --> 00:08:17 and consent of the Senate. Not more than three
00:08:17 --> 00:08:19 of the commissioners shall be members of the
00:08:19 --> 00:08:22 same political party. Any commissioner may be
00:08:22 --> 00:08:25 removed by the president for inefficiency, for
00:08:25 --> 00:08:28 neglect of duty or malfeasance in office. Notice
00:08:28 --> 00:08:31 what it says and what it doesn't say. It lists
00:08:31 --> 00:08:34 specific reasons for removal. But it doesn't
00:08:34 --> 00:08:36 say at the pleasure of the president or for any
00:08:36 --> 00:08:39 reason. Right. And we can contrast that with
00:08:39 --> 00:08:42 true executive agencies where the law generally
00:08:42 --> 00:08:45 just says nothing about removal, meaning they
00:08:45 --> 00:08:46 just serve at the pleasure of the president,
00:08:46 --> 00:08:49 or that they can explicitly be removed at will.
00:08:49 --> 00:08:52 Here, Congress is trying to create a body that
00:08:52 --> 00:08:54 can regulate business without being captured
00:08:54 --> 00:08:57 by either political party. How do we know that's
00:08:57 --> 00:08:59 what they intended? We can see it in the legislative
00:08:59 --> 00:09:02 history. Here's part of the Senate report. Can
00:09:02 --> 00:09:04 you read this section? One of the chief advantages
00:09:04 --> 00:09:06 of the proposed commission over the Bureau of
00:09:06 --> 00:09:09 Corporations lies in the fact that it will have
00:09:09 --> 00:09:11 greater prestige and independence in its decisions,
00:09:12 --> 00:09:14 coming from the board of several persons, will
00:09:14 --> 00:09:17 be more readily acceptable as impartial and well
00:09:17 --> 00:09:21 -considered. For this reason, also, it is essential
00:09:21 --> 00:09:23 that it should not be open to the suspicion of
00:09:23 --> 00:09:26 partisan direction, and this bill provides, therefore,
00:09:26 --> 00:09:29 that not more than three members of the commission
00:09:29 --> 00:09:32 shall belong to any one political party. So that's
00:09:32 --> 00:09:34 straight from Congress. They're not just building
00:09:34 --> 00:09:37 an agency. They're trying to build increased
00:09:37 --> 00:09:39 credibility. They want an institution that people
00:09:39 --> 00:09:42 can trust. One of the bill's sponsors explained
00:09:42 --> 00:09:44 what they were thinking. The administration of
00:09:44 --> 00:09:47 the Antitrust Act has been a lame and halting,
00:09:47 --> 00:09:49 changing with the shifting incumbents of the
00:09:49 --> 00:09:51 attorney general's office and according to the
00:09:51 --> 00:09:55 requirements of political exigencies. As a result,
00:09:55 --> 00:09:57 practically no progress has been made in the
00:09:57 --> 00:10:00 control of the trusts. Experience should teach
00:10:00 --> 00:10:02 us that with reference to interstate trade, a
00:10:02 --> 00:10:04 commission or board should be organized similar
00:10:04 --> 00:10:07 to the Interstate Commerce Commission with powers
00:10:07 --> 00:10:10 of investigation, of condemnation, and of recommendation.
00:10:11 --> 00:10:14 Congress is saying that they needed a permanent
00:10:14 --> 00:10:16 body that wouldn't shift with every administration.
00:10:17 --> 00:10:20 Another senator put it even more clearly. There
00:10:20 --> 00:10:22 should be an administrative tribunal of high
00:10:22 --> 00:10:24 character, nonpartisan or rather bipartisan,
00:10:25 --> 00:10:28 and independent of any department of the government.
00:10:28 --> 00:10:31 We want traditions. We want a fixed policy. We
00:10:31 --> 00:10:34 want trained experts. We want precedents. We
00:10:34 --> 00:10:37 want a body of administrative law built up. Such
00:10:37 --> 00:10:39 work must be done by the board or commission
00:10:39 --> 00:10:41 of dignity, permanence, ability, independent
00:10:41 --> 00:10:45 of the executive authority, acceptance, selection,
00:10:45 --> 00:10:48 and independent in character. They're trying
00:10:48 --> 00:10:52 to create a permanent institution with integrity.
00:10:53 --> 00:10:56 So they were creating referees for markets. Yes.
00:10:56 --> 00:10:58 Referees that might not be popular with businesses,
00:10:58 --> 00:11:01 but would be trusted. And that's because the
00:11:01 --> 00:11:04 game depends on that trust. So we've talked about
00:11:04 --> 00:11:06 why Congress wanted independent agencies and
00:11:06 --> 00:11:10 talked about the basic core definition. But let's
00:11:10 --> 00:11:12 talk about what you actually need to make an
00:11:12 --> 00:11:14 agency independent. There are five main protections
00:11:14 --> 00:11:17 we'll generally see. Not every independent agency
00:11:17 --> 00:11:19 has all of them. So the first one we've talked
00:11:19 --> 00:11:22 about, that's that for -cause removal. The president
00:11:22 --> 00:11:24 can't fire a member of this agency just because
00:11:24 --> 00:11:26 he doesn't like the decision. They can only do
00:11:26 --> 00:11:29 it for inefficiency, neglect of duty, or malfeasance
00:11:29 --> 00:11:32 in office. Those terms seem pretty vague, though.
00:11:32 --> 00:11:35 They really are vague, and that's kind of intentional.
00:11:35 --> 00:11:38 We'll be talking more about exactly what they
00:11:38 --> 00:11:41 mean next episode, but what matters now is that
00:11:41 --> 00:11:43 it can't just mean I disagree with your policy
00:11:43 --> 00:11:46 choices. So the second requirement is fixed terms.
00:11:47 --> 00:11:49 You don't serve for the pleasure of the president.
00:11:49 --> 00:11:51 Once you're appointed, you serve for a set number
00:11:51 --> 00:11:54 of years. So how long are these years? It depends
00:11:54 --> 00:11:57 on the agency. The FTC commissioners are seven
00:11:57 --> 00:12:01 years. The Fed get 14. So in this case, even
00:12:01 --> 00:12:04 if we have a president serving two consecutive
00:12:04 --> 00:12:06 terms, they cannot appoint every member of the
00:12:06 --> 00:12:09 Fed. That seems to be the point, though, right?
00:12:09 --> 00:12:11 That these terms are designed to outlast any
00:12:11 --> 00:12:14 single administration, meaning it's not political.
00:12:14 --> 00:12:16 It is political in the sense of who is being
00:12:16 --> 00:12:18 appointed, but it's not political in the sense
00:12:18 --> 00:12:21 that the president directly controls it. A governor
00:12:21 --> 00:12:23 of the Fed who's appointed today will serve under
00:12:23 --> 00:12:26 three or four presidents generally, but the terms
00:12:26 --> 00:12:28 aren't quite as long for some of the other agencies.
00:12:29 --> 00:12:31 They're still pretty lengthy, though. SEC commissioners
00:12:31 --> 00:12:33 have five years. Fire commissioners have five.
00:12:33 --> 00:12:36 The Nuclear Regulatory Commission also has five
00:12:36 --> 00:12:39 years. So fixed terms, four calls removal. What
00:12:39 --> 00:12:42 else? The other one we've already been talking
00:12:42 --> 00:12:45 about, just not. saying it explicitly, multi
00:12:45 --> 00:12:47 -member boards. The Fed has seven board members.
00:12:47 --> 00:12:50 The FTC has five commissioners. The SEC has five.
00:12:50 --> 00:12:52 Why not just one person? Wouldn't that be more
00:12:52 --> 00:12:55 efficient? If we have an entire group, it's going
00:12:55 --> 00:12:57 to be a lot harder to capture or influence each
00:12:57 --> 00:13:00 person. We're also going to get diverse perspectives.
00:13:00 --> 00:13:02 They can check each other. And it means that
00:13:02 --> 00:13:06 no single person will have too much power of
00:13:06 --> 00:13:09 themselves. It also means that we're going to
00:13:09 --> 00:13:12 be rotating so that the membership of the board
00:13:12 --> 00:13:14 will change, but it will change relatively slowly.
00:13:15 --> 00:13:19 Okay. So then what's the fourth element? Most
00:13:19 --> 00:13:22 of the time, there's also a bipartisan requirement.
00:13:22 --> 00:13:25 This one doesn't apply to the Fed. But the FTC
00:13:25 --> 00:13:26 can have no more than three members from one
00:13:26 --> 00:13:30 political party. The FCC, same thing. The Federal
00:13:30 --> 00:13:33 Election Commission is split 3 -3. Even a president
00:13:33 --> 00:13:36 who serves for two full terms, even if they could
00:13:36 --> 00:13:37 theoretically pick every one of these members,
00:13:37 --> 00:13:39 they can't pack it with members from their party.
00:13:40 --> 00:13:43 So built -in political diversity, though I imagine
00:13:43 --> 00:13:45 that also can cause some problems. It certainly
00:13:45 --> 00:13:49 can. The FEC has been deadlocked 3 -3 for years
00:13:49 --> 00:13:51 because of this bizarre bipartisan structure.
00:13:52 --> 00:13:55 Notice most of the time the boards have an odd
00:13:55 --> 00:13:57 number of people. So let me ask, is the political
00:13:57 --> 00:14:00 bipartisan structure just a function of realism?
00:14:00 --> 00:14:04 Because we have in states, for example, judges
00:14:04 --> 00:14:08 who run as non -political, politically elected
00:14:08 --> 00:14:13 officers. But the reality is that we know judges
00:14:13 --> 00:14:16 are Democrats and Republicans and they vote certain
00:14:16 --> 00:14:19 ways. They just can't advertise that as they
00:14:19 --> 00:14:22 are running for office. So why not have that
00:14:22 --> 00:14:27 as a secondary level to... this bipartisan or
00:14:27 --> 00:14:31 this nonpartisan or this, what is the right word
00:14:31 --> 00:14:33 here? We generally will think of them as bipartisan.
00:14:33 --> 00:14:37 It's acknowledging that people do have political
00:14:37 --> 00:14:40 viewpoints and trying to ensure that we can't
00:14:40 --> 00:14:44 use a cloak of neutrality to prevent the board
00:14:44 --> 00:14:48 from actually having diverse viewpoints. Okay.
00:14:48 --> 00:14:51 So then what is the fifth element? So the last
00:14:51 --> 00:14:53 one, we've also kind of hinted at, and that's
00:14:53 --> 00:14:56 staggered terms. One member of the Fed, their
00:14:56 --> 00:15:00 term expires every two years. One FTC commissioner's
00:15:00 --> 00:15:03 term expires every year. And again, that is because
00:15:03 --> 00:15:06 it means that when we're changing the composition
00:15:06 --> 00:15:09 of these groups, it's going to change slowly.
00:15:09 --> 00:15:12 So it's like the Senate. Yes. Only a third of
00:15:12 --> 00:15:15 the Senate is up for election every cycle. So
00:15:15 --> 00:15:17 we've got some continuity within the system.
00:15:18 --> 00:15:20 Let me just make sure I understand the combined
00:15:20 --> 00:15:23 effect. If I'm the president. and I appoint someone
00:15:23 --> 00:15:26 to the Fed board for 14 years, and then they
00:15:26 --> 00:15:29 start making decisions I hate. You are absolutely
00:15:29 --> 00:15:32 stuck with them unless they commit actual misconduct.
00:15:32 --> 00:15:34 You chose them, but once they're confirmed by
00:15:34 --> 00:15:36 the Senate and have taken office, they are independent.
00:15:37 --> 00:15:39 You can talk to them, you can pressure them,
00:15:39 --> 00:15:42 but you can't actually fire them for policy disagreements.
00:15:42 --> 00:15:45 That seems like it could backfire spectacularly.
00:15:46 --> 00:15:48 And indeed it can. Presidents can become really
00:15:48 --> 00:15:51 frustrated with their choices. Why do we need
00:15:51 --> 00:15:53 these referee agencies at all? Why not just have
00:15:53 --> 00:15:56 everything be accountable to the president? That
00:15:56 --> 00:15:58 seems more democratic. We elect a president.
00:15:58 --> 00:16:00 The president should control the executive branch.
00:16:01 --> 00:16:04 Politicians have much shorter time horizons,
00:16:04 --> 00:16:07 and we could already see this danger years ago.
00:16:07 --> 00:16:12 This was what was at issue in Humphrey's executor
00:16:12 --> 00:16:17 in 1935, a big year as we've seen in this podcast
00:16:17 --> 00:16:20 so far. So here the court explained why some
00:16:20 --> 00:16:23 agencies have to operate independently. Can you
00:16:23 --> 00:16:25 read this section? The Federal Trade Commission
00:16:25 --> 00:16:27 is an administrative body created by Congress
00:16:27 --> 00:16:30 to carry into effect legislative policies embodied
00:16:30 --> 00:16:33 in the statute in accordance with the legislative
00:16:33 --> 00:16:36 standard therein prescribed and to perform other
00:16:36 --> 00:16:38 specified duties as legislative or as judicial
00:16:38 --> 00:16:41 aid. Such a body cannot in any proper sense be
00:16:41 --> 00:16:44 characterized as an arm or an eye of the executive,
00:16:44 --> 00:16:47 its duties are performed without executive leave,
00:16:47 --> 00:16:49 and in the contemplation of the statute must
00:16:49 --> 00:16:52 be free from executive control. It is quite evident
00:16:52 --> 00:16:55 that one who holds his office only during the
00:16:55 --> 00:16:58 pleasure of another cannot be depended upon to
00:16:58 --> 00:17:00 maintain an attitude of independence against
00:17:00 --> 00:17:03 the latter's will. Since the Federal Trade Commission
00:17:03 --> 00:17:05 occupies no place in the Executive Department,
00:17:05 --> 00:17:08 the Commission acts in part quasi -legislative,
00:17:08 --> 00:17:12 and part quasi -judicially, to the extent that
00:17:12 --> 00:17:15 it exercises any executive function, it does
00:17:15 --> 00:17:18 so in the discharge and effectuation of the quasi
00:17:18 --> 00:17:21 -legislative or quasi -judicial powers. So here
00:17:21 --> 00:17:24 the court was saying that some functions aren't
00:17:24 --> 00:17:27 really executive at all. When the FTC is investigating
00:17:27 --> 00:17:29 antitrust violations, it's acting like a court.
00:17:30 --> 00:17:32 When it's making rules, it's acting like a legislature.
00:17:32 --> 00:17:35 But it's still in the executive branch organizationally.
00:17:36 --> 00:17:38 It certainly doesn't seem like it was in the
00:17:38 --> 00:17:41 mind of the court then, but functionally, everybody
00:17:41 --> 00:17:43 would put it within the executive branch now.
00:17:43 --> 00:17:47 That tension and the shift in how it's viewed
00:17:47 --> 00:17:50 is partly why Humphrey's executor is on such
00:17:50 --> 00:17:53 shaky ground now. This is getting pretty philosophical.
00:17:54 --> 00:17:56 Can you give me something a little bit more concrete?
00:17:57 --> 00:17:59 The Consumer Product Safety Commission, we call
00:17:59 --> 00:18:01 it Dangerous Toys. We don't want whether toys
00:18:01 --> 00:18:04 have lead to depend on whether the company making
00:18:04 --> 00:18:07 the toy has political connections. Yeah, kids'
00:18:07 --> 00:18:12 safety shouldn't be political. Congress has decided
00:18:12 --> 00:18:15 some decisions should be based on expertise and
00:18:15 --> 00:18:19 facts, not politics. The SEC's stability in the
00:18:19 --> 00:18:22 middle of the GameStop surge was critical to
00:18:22 --> 00:18:24 controlling the chaos we had then. That was the
00:18:24 --> 00:18:27 independent model working. And it also takes
00:18:27 --> 00:18:30 years to understand monetary policy or securities
00:18:30 --> 00:18:32 regulation or telecommunications technology.
00:18:32 --> 00:18:34 If we could fire all of these people every four
00:18:34 --> 00:18:37 years, we would completely lose all this institutional
00:18:37 --> 00:18:40 knowledge. So which agencies are actually independent?
00:18:41 --> 00:18:43 Let's get a lineup. We've talked about some of
00:18:43 --> 00:18:45 them. The Federal Reserve, they control interest
00:18:45 --> 00:18:47 rates and monetary policy. There are 14 -year
00:18:47 --> 00:18:50 terms. The Securities and Exchange Commission,
00:18:50 --> 00:18:53 they police the stock market. They have five
00:18:53 --> 00:18:54 -year terms. The Federal Trade Commission, the
00:18:54 --> 00:18:57 FTC. They are a consumer protection antitrust.
00:18:57 --> 00:19:01 They have seven -year terms. What else? Oh, the
00:19:01 --> 00:19:03 list goes on. The FCC, the Federal Communications
00:19:03 --> 00:19:06 Commission, they regulate broadcasting, internet,
00:19:06 --> 00:19:08 and phones. The National Labor Relations Board,
00:19:08 --> 00:19:10 the NLRB, it protects the right to unionize.
00:19:11 --> 00:19:13 The Consumer Product Safety Commission, this
00:19:13 --> 00:19:15 is why your kids' toys don't have lead paint.
00:19:15 --> 00:19:18 The Federal Energy Regulatory Commission oversees
00:19:18 --> 00:19:21 energy markets and the electrical grid. So these
00:19:21 --> 00:19:24 all basically touch our daily lives. Yes. These
00:19:24 --> 00:19:26 affect so many parts of our daily life. What
00:19:26 --> 00:19:30 about agencies like the EPA and the FDA? Those
00:19:30 --> 00:19:32 are executive agencies, not independent agencies.
00:19:33 --> 00:19:35 The heads of those agencies can be fired by the
00:19:35 --> 00:19:38 president at will. They're part of the president's
00:19:38 --> 00:19:40 team implementing the president's agenda. The
00:19:40 --> 00:19:42 EPA administrator could be fired tomorrow. The
00:19:42 --> 00:19:45 FTC chair cannot. That's the difference. It is
00:19:45 --> 00:19:48 a policy choice that Congress has made. They've
00:19:48 --> 00:19:50 decided that environmental policy should be responsive
00:19:50 --> 00:19:53 to elections. People vote for presidents for
00:19:53 --> 00:19:55 a lot of reasons, but it's going to be partly
00:19:55 --> 00:19:57 based on their views on the environment. But
00:19:57 --> 00:20:00 they thought that monetary policy should be more
00:20:00 --> 00:20:03 insulated from political pressures. But Congress
00:20:03 --> 00:20:06 could change this if they wanted to. Yes, they
00:20:06 --> 00:20:08 can. And they do occasionally, not very often.
00:20:08 --> 00:20:10 The Consumer Financial Protection Bureau was
00:20:10 --> 00:20:14 created in 2010. But the Supreme Court said in
00:20:14 --> 00:20:16 2020 that the structure was unconstitutional.
00:20:16 --> 00:20:20 That only had a single director. So now, instead,
00:20:20 --> 00:20:22 that director serves at the pleasure of the president.
00:20:23 --> 00:20:26 So it's no longer an independent agency. It isn't.
00:20:26 --> 00:20:30 This was the first step the courts took to sort
00:20:30 --> 00:20:32 of killing off independent agencies. There's
00:20:32 --> 00:20:34 a big difference between an agency that's being
00:20:34 --> 00:20:36 run by one person and one that's being run by
00:20:36 --> 00:20:39 a board, which is why the rest of the independent
00:20:39 --> 00:20:42 agencies have survived so far. But this could
00:20:42 --> 00:20:44 dramatically change the landscape of administrative
00:20:44 --> 00:20:46 law. And I'm sure we're going to talk about this
00:20:46 --> 00:20:50 next episode. But why would courts be concerned
00:20:50 --> 00:20:53 about independent agencies? This is where we're
00:20:53 --> 00:20:54 going to be talking about the unitary executive
00:20:54 --> 00:20:56 theory. Well, before we get there, let's see
00:20:56 --> 00:20:59 if we can recap what we covered today. All right,
00:20:59 --> 00:21:01 go for it. Okay, so we started with independent
00:21:01 --> 00:21:03 agencies are agencies whose leaders can't be
00:21:03 --> 00:21:06 fired at will. We talked about their origins
00:21:06 --> 00:21:09 with the FTC in 1914. We covered how their structure
00:21:09 --> 00:21:12 works, fixed terms, for -cause removal, multi
00:21:12 --> 00:21:15 -member boards, bipartisan requirements, staggered
00:21:15 --> 00:21:17 terms. And we discussed why Congress built them
00:21:17 --> 00:21:20 this way to keep certain decisions based on expertise
00:21:20 --> 00:21:23 and facts rather than short -term politics. Exactly.
00:21:23 --> 00:21:25 These are referees who can't be fired for making
00:21:25 --> 00:21:29 unpopular calls. And this has been critical to
00:21:29 --> 00:21:32 creating the kind of stable markets that we would
00:21:32 --> 00:21:35 want in a modern democracy. Though it is a weird
00:21:35 --> 00:21:38 structure. It does seem to violate basic constitutional
00:21:38 --> 00:21:41 principles like all executive power is supposed
00:21:41 --> 00:21:44 to be vested in the president. That does create
00:21:44 --> 00:21:48 tension. And that likely means we are not going
00:21:48 --> 00:21:49 to have this structure for very much longer.
00:21:50 --> 00:21:53 But as of this recording, independent agencies
00:21:53 --> 00:21:58 still exist. Well, and because without independence,
00:21:58 --> 00:22:01 everything now becomes political. Yes, everything
00:22:01 --> 00:22:05 becomes political. And in our next episode, we'll
00:22:05 --> 00:22:07 be talking about the removal power. We'll talk
00:22:07 --> 00:22:09 about specifically what forecause means in practice.
00:22:15 --> 00:22:18 the major Supreme Court case. How could you not
00:22:18 --> 00:22:20 look forward to that? We'll see you next time
00:22:20 --> 00:22:21 on Administrative Remedies.