Bessent says he has no opinion on Trump authority to fire Fed officials over policy disputes

By David Lawder

WASHINGTON, Feb 4 (Reuters) – U.S. Treasury Secretary Scott Bessent said on Wednesday he has no opinion on whether the president has a constitutional authority to fire a Federal Reserve chair or board member because of a monetary policy disagreement, but he considers the central bank an independent agency.

Bessent told a U.S. House of Representatives Financial Services Committee hearing that there were “varying opinions” within the administration about a legal doctrine called the “unitary executive” theory that envisions vast executive authority for a president.

“There are varying opinions in the administration,” Bessent told lawmakers, saying he was not a lawyer and the issue would have to be decided by the U.S. Supreme Court.

The nation’s highest court is now considering President Donald Trump’s unprecedented bid to fire Federal Reserve Governor Lisa Cook in a case that has put a sharp spotlight on the central bank’s independence.

During arguments last month, the justices indicated they are unlikely to grant the Trump administration’s request to lift a judge’s order barring ​the president from immediately firing Cook while her legal challenge continues to play out.

Since the Fed was created in ​1913, no president has tried to oust an official from the central bank.

Conservative and liberal justices debated what constitutes adequate “cause” under ‌federal law to remove a Fed official and what procedures are needed to ensure fairness for Cook.

The justices expressed unease about the ramifications for the Fed’s cherished independence from political influence if they endorse the Trump administration’s arguments that the president acted within his powers in seeking to remove Cook.

Asked if he viewed the Fed as an executive or legislative agency, Bessent said, “I consider it an independent agency.”

“We will see,” he continued. “I do believe that the Federal Reserve has to maintain credibility and be like Caesar’s wife, beyond reproach.”

In a separate exchange, Bessent told committee members that the independence of the Federal Reserve was based on Americans’ trust of the central bank, which it lost because it allowed inflation to get out of control and “ravage” their incomes.

Trump’s broad assertions of power appear to be advancing an aggressive version of the “unitary executive” legal doctrine, arguing that Article II of the U.S. Constitution, which delineates presidential powers, gives the president sole authority over the federal government’s executive branch.

It envisions robust powers even when Congress has sought to impose certain limits, such as restricting a president’s ability to fire the heads of some independent agencies.

Under the Constitution, the U.S. government is divided into the executive, legislative and judicial branches – set up in the 18th century to ensure checks and balances within the American system. Advocates of the unitary executive theory argue that presidents legally can remove any executive branch official, including heads of independent agencies, even if such action would violate job protections guaranteed under other laws.

(Reporting by David Lawder, writing by Andrea Shalal; editing by Diane Craft)