WASHINGTON − The Trump administration on Sept. 18 asked the Supreme Court to let the president remove Lisa Cook from the Federal Reserve board in a major test of the central bank's longstanding independence.

"This application involves yet another case of improper judicial interference with the President’s removal authority," Solicitor General John Sauer wrote in the administration's emergency request.

Cook's attorneys argue removing her would risk "shock waves in the financial markets that could not easily be undone."

Trump is probing the limits of his executive power, including over agencies designed to be insulated from political influence.

In May, the Supreme Court said Trump could fire without cause members of two such agencies that deal with labor issues.

But the majority also notably said the Federal Reserve is different from the National Labor Relations Board and the Merit Systems Protection Board.

The court called the central bank a “uniquely structured, quasi-private entity,” signaling the justices would likely uphold the constitutionality of the bank’s for-cause removal protections.

Trump, however, argues he has sufficient justification. Trump said he fired Cook in August for allegedly making false statements on mortgage applications before she began her 14-year term in 2023.

Cook hasn't been charged with a crime

Cook hasn’t been charged with a crime and hasn’t had a chance to formally respond to Trump’s allegations that she declared more than one home her “primary residence” in an effort to get a more favorable interest rate for a second home.

Documents reviewed by Reuters show Cook had declared the second property a “vacation home,” countering other documents Cook’s critics have citied.

No president has ever tried to fire a Fed governor since Congress created the board in 1913.

The law allows a Fed member to be removed “for cause” but does not say what that covers or specify a procedure for proving wrongdoing.

Cook argues Trump's allegations are a pretext to fire her for her monetary policy stance.

Fed board designed by Congress to be independent of political pressure

The Fed sets interest rates that help determine how fast or slow the economy grows. Trump has berated Fed Chairman Jerome Powell for being too slow to lower interest rates to spur growth.

But Congress set up the seven-member Fed board to make its economic decisions independent of political pressure.

"An order from this Court allowing the removal of Governor Cook will thus threaten grave harm to the American economy," Cook's lawyers told the Supreme Court.

A federal district judge and a divided appeals court panel said Cook should be allowed to remain on the board as she challenges Trump's effort to remove her.

The administration doesn’t dispute that it failed to tell Cook why she was being fired and failed to give her a meaningful opportunity to respond, two of the three judges on the U.S. Court of Appeals for the DC Circuit who heard the case said Sept. 15.

Because of that, and because of the many ways the case is different from Trump’s removals of members of other independent agencies, Cook should stay on the job for now, Judge Brad Garcia wrote in a concurring opinion joined by Judge Michelle Childs. Both judges were appointed by President Joe Biden.

Judge Gregory Katsas, who was appointed by Trump to the appeals court, said the president should be allowed to remove Cook.

Katsas wrote that Cook’s challenge turns on the meaning of the phrase “for cause,” which should be interpreted broadly.

“The President plainly invoked a cause relating to Cook’s conduct, ability, fitness, or competence,” he wrote.

Trump agues Cook isn't entitled to a formal chance to respond

The Justice Department argues Cook isn’t entitled to a formal chance to respond and, in any case, didn’t attempt to counter the allegations after Trump first raised them.

“Having declined to bring any defense to the President’s attention or to dispute any material facts, Cook cannot complain about insufficient process,” Sauer, the solicitor general, wrote.

And as long as the president has a justification other than a policy disagreement for removing Cook, Trump’s reason is not reviewable by the courts, he told the justices.

“That the Federal Reserve Board plays a uniquely important role in the American economy," Sauer wrote, "only heightens the government’s and the public’s interest in ensuring that an ethically compromised member does not continue wielding its vast powers."

This article originally appeared on USA TODAY: Trump asks Supreme Court to let him fire Lisa Cook from Federal Reserve

Reporting by Maureen Groppe, USA TODAY / USA TODAY

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