GOP House Representative Advances Legislation Easing Trump's Firing Power Over Fed Chair
In a move that could potentially alter the balance between the Federal Reserve's independence and presidential control, Rep. Buddy Carter, a House Republican, has introduced a bill called the TOO LATE Act. This proposed legislation seeks to make it easier for President Donald Trump to remove the current Federal Reserve Chair, Jerome Powell, under specific conditions.
Currently, the Federal Reserve Act of 1913 stipulates that the President can only dismiss the chair "for cause," which generally means malfeasance or dereliction of duty. This requirement makes dismissal difficult and protects the Fed's independence.
The TOO LATE Act, however, aims to modify this by establishing new, more flexible conditions for dismissal. If passed, the bill would allow the President to remove Powell based on economic or management criteria instead of legal cause. This could include situations where the federal funds target rate deviates by more than 200 basis points from an average generated by certain benchmarks for two consecutive quarters.
The bill would also lower the threshold from "for cause" to allow removal based on performance or policy disagreements, such as failure to lower interest rates promptly or meet other economic goals. This would effectively give the President more direct control over monetary policy decisions through the threat of firing the Fed chair for perceived policy failures, rather than only for legal misconduct.
If any of the two benchmarks are hit, President Trump could write a letter giving a reason for removing Powell, which would then be submitted to Congress and reviewed by the House Financial Services and Senate Banking, Housing and Urban Affairs committees within 30 days.
The proposed bill is a response to President Trump's previous threats to fire Powell for not lowering interest rates, but his recent statement that he would allow Powell to finish his term that expires next May. It is also a dig at Trump's nickname for the Fed chair.
Rep. Buddy Carter believes that Powell has been too late to cut rates, and this is directly harming the American people. He argues that Powell needs to go and the President should have the power to make that decision without question.
The Federal Reserve Board of Governors declined to comment when reached by Fox News Digital.
As the TOO LATE Act makes its way through Congress, it remains to be seen whether it will pass and what impact it might have on the Federal Reserve's independence and the economy as a whole.
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