Trump’s new executive order aims to increase control over independent regulators

President Donald Trump recently signed an executive order that aims to give greater control to the White House over independent federal regulators such as the Securities and Exchange Commission (SEC), the Federal Trade Commission (FTC), and the Federal Communications Commission (FCC). Trump’s move seeks to bolster his ability to influence oversight of the financial system and set guidelines for transportation safety, consumer protection, and communication technologies.

This directive highlights a larger trend within the Trump administration to expand authority over governmental operations, possibly leading to restrictions on congressionally approved spending. Previous administrations valued independent regulators that could act in the nation’s long-term interest without daily political interventions. Presidents relied on appointing agency leaders as a means to guide their actions without demanding strategic planning reports or controlling their access to funding initiatives, as outlined in the executive order.

The Trump administration argues that independent regulators could potentially derail the president’s policy agenda and disregard the will of the electorate. The goal is to establish greater accountability by aligning federal officials exercising significant powers with direct oversight from the elected President. Independent agencies have a long history, starting in 1887 with the establishment of the Independent Commerce Commission, which initially addressed railroad monopolies.

Roger Nober, a George Washington University professor and director of the GW Regulator Studies Center, labeled the executive order as “very significant.” He believes this directive goes beyond existing requirements for regulatory reviews by the White House Office of Management and Budget, especially concerning regulations with substantial economic impacts over $100 million.

While Trump’s move to increase White House control over regulators, like the SEC, is understandable, the long-term implications of this approach remain in question. Nober suggests that altering independent agencies’ political responsibility to the executive branch may not be the most effective strategy in the grand scheme of things. The Federal Reserve would maintain its autonomy over determining short-term interest rates, despite the executive order extending its reach to cover the regulatory obligations of the central bank.

The implications of this directive may provoke a legal response. The executive order could face challenges in court, aiming to clarify and solidify the executive branch’s authority over these agencies. The White House would assume new responsibilities, such as setting performance standards and management objectives for independent agency heads and adjusting their budget allocations to align with the administration’s agenda.

In conclusion, President Trump’s executive order signals a deliberate attempt to centralize oversight of independent regulators, elevating the White House’s influence over the nation’s key regulatory bodies. The potential ramifications of this order may manifest in political, legal, and practical realms, marking a significant shift in the balance of power.