The Supreme Court is hearing arguments over whether President Trump can fire Federal Reserve Governor Lisa Cook over allegations of mortgage fraud.

Cook has denied the allegations, calling them politically motivated.

Justices Brett Kavanaugh and Amy Coney Barrett expressed doubt over the legality of the move, with Kavanaugh conducting a rigorous line of questioning to Trump Solicitor General D. John Sauer.

Kavanaugh warned of setting a dangerous precedent where future presidents could fire people “at will,” warning Sauer, “what comes around goes around.”

Transcript of the exchange can be read below:

Kavanaugh: For present purposes, you accept the constitutionality of the for-cause removal provision for the Federal Reserve, and that is what protects the independence of the Federal Reserve. What, in your view, is the purpose of that independence?

Sauer: It protects the governors. Exactly reflecting the plain text of the statute, it protects the governors from removal for policy disagreement or for no reason at all.

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Kavanaugh: What is the broader purpose of that?

Sauer: To preserve the independence of the Federal Reserve.

Kavanaugh: And what is the broader purpose of that?

Sauer: Well, there are a number of reasons that are discussed by the amici, and I think not disputed by us, which is that there is, you know, a long tradition of having this exercise of monetary policy be exercised independent of, you know, executive influence, and we don’t dispute that that’s what Congress was doing in that statute. And again, we are not disputing the validity of the for-cause removal restriction here.

Kavanaugh: And why is that independence important in your view?

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Sauer: We don’t dispute the importance of that for many of the reasons that the amici say, but we emphasize that there’s a balance struck here. This is not an ironclad “you can never be removed.” There is a cause removal authorization.

Kavanaugh: But on that, in your position that there’s no judicial review, no process required, no remedy available, very low bar for cause that the president alone determines—that would weaken, if not shatter, the independence of the Federal Reserve that we just discussed.
Sauer: We disagree with that, and I would point to the point you made that this is a low bar for cause. In a sense, it’s a very high bar.

It is a very strong protection, because it does protect them from the one thing that Congress was apparently most worried about, which is—
Kavanaugh: But it would be in the view of the president—the president who might have a policy disagreement—and there’s no judicial review, and the president can just define it on his or her own.

Sauer: One of the strongest traditions in this court’s jurisprudence is the sort of presumption of regularity to the president’s actions that has applied to this provision, I think, effectively for 112 years, and it continues to do so.

Kavanaugh: Let’s talk about the real-world downstream effects of this. Because if this were set as a precedent, it seems to me, just thinking big picture, what goes around comes around. All of the current president’s appointees would likely be removed for cause on January 20, 2029, if there’s a Democratic president, or January 20, 2033. And then we’re really at at-will removal. So what are we doing here? What is—you know, we started—that’s why I started with what’s the purpose of the independence and the for-cause removal. If we accept all these—no procedure, no judicial review, no remedy—you know, that’s what’s going to happen, I think. And then where are we? So do you dispute that that is, you know, the real-world effect?

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Sauer: I can’t predict what future presidents may or may not do, but the argument strikes me as a policy argument.

Kavanaugh: Well, history is a pretty good guide. Once these tools are unleashed, they are used by both sides, and usually more the second time around. And I think that’s what we have to make sure we’re—again, that can’t drive the decision necessarily. We have to be aware of what we’re doing and the consequences of your position for the structure of the government.

A summary of SCOTUS arguments can be heard in the CBS News clip below:

(Video Credit: CBS Evening News)

As it stands, SCOTUS appears poised to side with Cook, with a ruling expected by summer that could affect other agencies.

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