Trump Makes New Push to Fire Fed Governor

Trump still wants Powell out.
Reuters
By Yuval Rosenberg and Michael Rainey

Happy Monday! With a shutdown deadline looming, a congressional game of chicken will commence this week, as Republicans look to vote on a “clean” bill that will fund the government into November. Also this week, the Fed is expected to cut interest rates on Wednesday after a two-day meeting that will likely include Stephen Miran, the White House economist who President Trump appointed to serve on the Fed’s board. The Senate is on track to confirm Miran tonight — and is slated to confirm a group of 48 other Trump nominees on Thursday, the first such batch of appointees to be approved after Republicans last week used the so-called “nuclear option” to change the rules for considering some lower-level nominations. Here's what you need to know this evening.

Trump Pressures Republicans to Pass a ‘Clean’ Spending Bill to Avert a Shutdown

President Trump on Monday called on House Republicans to unite in support of a “clean” short-term continuing resolution that GOP leaders are preparing to avoid a government shutdown on October 1 and fund federal agencies into late November.

“In times like these, Republicans have to stick TOGETHER to fight back against the Radical Left Democrat demands, and vote ‘YES!’ on both Votes needed to pass a Clean CR this week out of the House of Representatives,” Trump wrote on his social media platform. “Democrats want the Government to shut down. Republicans want the Government to OPEN.”

The post comes as a couple of House Republicans, Reps. Thomas Massie of Kentucky and Victoria Spartz of Indiana, have already voiced their opposition to the funding plan, with Reps. Warren Davidson of Ohio and Marjorie Taylor-Greene of Georgia signaling reservations as well. House Speaker Mike Johnson can’t afford to lose more than two votes, assuming all Democrats stick together. Spartz has been known to threaten to vote against GOP leadership’s plans only to fall in line when pressed.

Republican leaders are working to put Democrats in a similar predicament to the one they faced in March, when House GOPers banded together to pass a funding bill, forcing Senate Democrats to choose between approving a spending plan they had no part in writing or allowing a shutdown. At least seven Democrats would be needed to reach the required 60 votes to pass the bill in the Senate. In March, Senate Minority Leader Chuck Schumer and nine other Democrats ultimately helped advance a seven-month funding bill.

But Schumer says this time will be different. He and House Minority Leader Hakeem Jeffries have called on Republicans to negotiate on the funding bill and include healthcare concessions such as an extension of enhanced Affordable Care Act subsidies. “We want to keep the government open by engaging in bipartisan negotiation,” Schumer reportedly said Monday. He sought to lay the blame for a potential shutdown on Republicans: “If one side refuses to negotiate they are the ones causing the shutdown.”

Senate Majority Leader John Thune told reporters on Monday that he hopes to get the stopgap measure done this week before lawmakers leave for a scheduled recess next week. That may not happen, though, as a House vote might not come until Thursday or Friday.

One unresolved issue delaying the release of the Republican legislation: Lawmakers may include additional funding for congressional security after the assassination last week of conservative activist Charlie Kirk. The White House is also asking Congress for an extra $58 million in security funding for the executive and judicial branches.

Trump Makes New Push to Fire Fed Governor Lisa Cook

President Trump is pressing ahead in his effort to fire Federal Reserve Governor Lisa Cook, despite the emergence of documents calling into question his claim that Cook committed mortgage fraud and is therefore subject to removal.

Loan records reviewed by Reuters and others show that Cook identified a second home she purchased in Georgia in 2021, before she was appointed to the central bank, as a “vacation home.” Without providing evidence, William Pulte, director of the Federal Housing Finance Agency, previously accused Cook of identifying two houses — the one in Georgia and another in Michigan — as her primary residences, which could constitute fraud. Trump seized upon that accusation to claim that it gave him grounds to fire Cook and replace her with an ally, a move that critics say would violate long-standing rules prohibiting such political interference with the central bank.

Trump attempted to fire Cook via letter on August 25, saying the alleged mortgage fraud gave him cause to do so, but a judge ruled that Cook cannot be removed while her lawsuit challenging the firing is still in process. Trump has asked an appeals court to overturn the ruling, and on Sunday, the Justice Department repeated its request for a stay. If the request fails, Trump is expected to appeal to the Supreme Court immediately as he seeks a ruling ahead of the next Fed meeting, which begins Tuesday.

Cook pushes back: One of Cook’s lawyers, Abbe Lowell, said Sunday that the Trump administration’s allegations are a “smear campaign” being waged to give the president more control over the central bank.

“The government continues to ignore the facts that have been publicly reported on and cited in our briefs that refute their allegations against Governor Cook,” Lowell said, per Bloomberg. “The attempt to remove Governor Cook is based on cherry-picked social media posts from the FHFA Director that collapse under basic scrutiny.”

In its filing, the Justice Department challenged Cook’s claim that the president cannot fire a Fed official for alleged or proven misconduct that occurred before the official took office. While Fed officials are protected from removal, the president has the authority to remove officials “for cause” — an authority that has never been exercised or tested before — and Trump is claiming that his removal authority is not limited to the period of time officials are in office.

More boldly, the Trump administration is arguing that the president’s assertion that he is firing an official for cause is not reviewable by the courts. As the Justice Department filing puts it, “The president’s ‘cause’ determination is not subject to judicial second-guessing.”

The case raises major questions about the limits on executive authority and the nature of the relationship between the president and the central bank, and some legal observers expect the Supreme Court to address the case quickly.

Trump ally nears approval: However the Cook case is decided, Trump will have at least one new ally at the Fed when the central bank starts its two-day meeting tomorrow. Later today, the Senate is expected to approve Stephen Miran, who currently chairs the White House Council of Economic Advisers, to fill a vacant seat on the seven-member Federal Reserve Board.

Miran has said he will take a leave of absence from his current job while filling in at the Fed but will return to his White House post when his term expires at the end of January 2026. It will be the first time a White House official has had a direct role in setting monetary policy in 90 years.

Quotes of the Day

“I’m never going to claim to be the smartest person in the room. I’m happy to be the most annoying person in the room.”

− Stephen Miran, quoted in a Wall Street Journal profile as he prepares to join the Federal Reserve’s 12-member board of governors.

“The rapid rise of the 42-year-old Harvard-educated economist from relative obscurity on Wall Street to the upper echelon of U.S. monetary policy stems from his deep-rooted devotion to the president’s economic agenda and knack for stirring up debate with provocative arguments,” the Journal’s Sam Goldfarb and Matt Grossman write, adding, “In his confirmation hearing this month, Miran said he would leave his role as an advocate of the president’s economic agenda at the Fed’s doorstep. Critics doubt that is possible.”

“We see lots of signs that the economy is weakening.”

− Congressional Budget Office Director Phill Swagel, in an appearance on CNBC, discussing the updated economic outlook released by his team on Friday. Swagel also said that, while inflation has come in below the expectations of many Wall Street economists, it has run higher than CBO expected early this year, fueled by President Trump’s tariffs. The Supreme Court is set to hear a challenge to the legality of Trump’s tariffs in November, and Swagel called that case “one of the key uncertainties in the economy.”

  

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