Justices Question Trump Push to Oust Fed’s Lisa Cook (Full Transcript)

[00:00:00] Speaker 1: The Trump administration is squaring off against Fed Governor Lisa Cook at the Supreme Court today over President Trump's effort to fire Cook. Former Fed governors of both parties say independence of American monetary policy itself is at stake. The conservatives on the court seemed skeptical about President Trump's argument that he's allowed to fire her for cause and that only he can decide what for cause means.

[00:00:28] Speaker 2: Your position that there's no judicial review, no process required, no remedy available, very low bar for cause that the president alone determines, and that would weaken if not shatter the independence of the Federal Reserve that we just discussed.

[00:00:50] Speaker 1: And my smart panel is back. Phil Mattingly, I know you listen to most if not all of the arguments. I feel like when you have lost Brett Kavanaugh as a Republican president, you've kind of lost.

[00:01:02] Speaker 3: Yeah, I'll one up you and say when you've lost Samuel Alito, Brett Kavanaugh, Amy Coney Barrett, and Justice Gorsuch, all of whom had very skeptical questions of the Solicitor General, John Sauer. Now, let's be very clear, that doesn't necessarily mean they're going to rule one way or another. But having listened to a number of Supreme Court arguments this year, the Trump administration has kept a lot of us busy on that front. It was by far, I think, the most skeptical I've heard a large group of the conservative majority repeatedly over the course of the entire argument. And let's be clear here, this is not just an argument about whether or not the president can remove somebody. This is an extraordinary court case with the highest stakes as the president continues his verbal and also legal assault on the Federal Reserve that we've seen over the course of pretty much the entirety of his first term. I think the critical thing to keep in mind here, as we picked up the skepticism of the justices, is at the heart of this is an allegation of mortgage fraud. The justices themselves pointed out the actual documents that underpin that allegation are not even in the case file here. It's just tweets from Bill Pulte that have screenshots of some of those. And much of the discussion was not at all about the allegations or whether that hit the forecast threshold, but instead process procedure and why the administration wanted to move so quickly on this, none of which seemed to be good signs for the administration. And a lot of questions that I think coming out of it, the administration will still have to answer.

[00:02:24] Speaker 1: And just on the underlying allegation by the administration, which is, I didn't actually realize that none of this is in this Supreme Court filing.

[00:02:35] Speaker 3: I mean, to be fair, screenshots. No, no, I'm actually being very sarcastic when I say screenshots of tweets are totally what should underpin a case in front of the Supreme Court.

[00:02:44] Speaker 1: Let me just kind of catch people up in case they are not up to speed on Bill Pulte and who he is and how he's trying to find ways to take down the president's political enemies via mortgage fraud. He did so, at least he referred her for prosecution August 20th. The president sent a letter five days later saying that he is going to fire Lisa Cook for cause based on that. She sued to keep her job three days later. Then a federal district court granted an injunction preventing her from being fired. Then there was a report from Reuters that cast doubt on Pulte's fraud claims to begin with. And then October 1st is when the Supreme Court decided to take up this case, which they heard today.

[00:03:31] Speaker 4: Yeah. And the process piece of this was something that the justices really dug into, including the fact that was she given appropriate notice, given the fact that Donald Trump just tweeted about the fact he intended to fire her? Was that really substantial enough in order to move forward with this process? And again, like you noted, they were not really getting into the underlying issues of the mortgage fraud or questioning the cause piece of this. This was really a process piece. And if you have watched Supreme Court fights in the past, you have to really cross your T's and dot your I's in the process here before you even get to the underlying issues of this case.

[00:04:09] Speaker 1: And just a bit of analysis from our colleague Brian Mina today. And he wrote, if the court greenlights Cook's ouster, it set a precedent that Trump and any future president could take advantage of in order to reshape the board and force lower interest rates, even when they are not warranted by economic reality.

[00:04:30] Speaker 5: And I think three of the most important words in there are any future president. And that clearly is on the minds of the conservative justices that Phil was talking about here. The Donald Trump era will end at some point, but this will go on. And this is a decision that will last beyond that. And it is so important to the independence of the Federal Reserve. And I think that this is something that a fight the president picked early on that he may live to regret overall in the Federal Reserve, because it has absolutely changed his ability to shape it. His fight with Jerome Powell over and over again in the criminal charges or the investigation, it probably has hampered his ability to change the Federal Reserve like he otherwise would have been able to had he just left the process alone.

[00:05:21] Speaker 6: And I think Bill Pulte's role in this can't be under-talked about because obviously he is the person who looks over Fannie Mae and Freddie Mac. But he, sources tell me, is at the White House all of the time, kind of going in and talking to the president about various different matters. We know that he's not just behind this Lisa Cook, you know, sort of indictment on her, or at least the beginning parts of that, but he's done it to other officials that he believes that should be kind of under investigation. And the president has vocalized that he wants to see under investigation. And it's, you know, kind of to the annoyance of some White House officials. Some White House officials like the idea that they're being more aggressive and that he is kind of behind this. But he's fundamentally a part of all of these efforts to bring folks up on these mortgages charges. Not only that, he's a member of Mar-a-Lago, so he can go talk to the president in Florida. And so I think that you see him kind of move in these shadow ways. And a lot of times we see somebody come under indictment or investigation, and then we learn just a few weeks later that it was Bill Pulte putting their name in there.

[00:06:25] Speaker 1: Yeah, Bill Pulte, who, as you said, is the FIFA FHFA chair. And so his job is to be in charge of Fannie and Freddie. He is very well aware of who the president wants to either send a message to or maybe even just full on prosecute. And so he's finding ways to do so in his narrow domain.

[00:06:50] Speaker 7: Let's bring in our legal analyst, Kerri Cordero. Kerri, tell us a little bit more about what these justices are questioning and how it looks.

[00:06:58] Speaker 8: So throughout this argument, Wolf, I think what the justices are trying to figure out is, one, should they actually get to more of the merits of the case? So this hearing overall was not going to get at the decision of whether or not the Fed governor should be removed from her position, but rather whether she should be able to stay in the job while her case proceeds through the courts. And so the justices asked a number of questions, both of the solicitor general and of her counsel, Paul Clement, as to how they should be thinking about this. There's a lot of issues that remain in the case, how the courts should interpret the for-cause requirement that a Fed governor be removed, whether or not the D.C. Circuit was correct in finding that the Fed governor has a due process right to her role. And so the courts are trying—the Supreme Court throughout its hearing was trying to wrestle with those questions and figure out how extensive they should go in terms of making those decisions, or whether they should just say that maybe the Trump administration jumped the gun a little bit in making this emergency request to the Supreme Court, and it should just continue to work through the lower courts.

[00:08:15] Speaker 9: And remind our— Carrie— Oh, go ahead. Yeah, go ahead. Well, Carrie, remind our viewers the implications here, how high the stakes are, why we're paying so much attention to this case.

[00:08:25] Speaker 8: So it came up a few times, Pamela, that this is such a novel case because a president in the Federal Reserve's history has not fired a governor. Governors are appointed to statutory terms. The Federal Reserve Act, the statute that governs the Federal Reserve, says that a governor should only be removed for cause, and yet it has never in the history of the United States been tested in this way.

[00:08:56] Speaker 7: Even some of the conservative justices—Carrie, correct me if I'm wrong—they seem to be suggesting that maybe the president went too far. But what's your assessment?

[00:09:06] Speaker 8: Yeah, I think there was a question as to whether or not this was just premature altogether, this emergency application that the administration made to the Supreme Court. Again, her case, Lisa Cook's challenge to her firing by President Trump was working its way through the lower courts, and they hadn't yet gotten to the merits of whether or not she could be actually removed. As a practical matter, she remains in her position as of this day, and so the Trump administration was trying to push the Supreme Court in its arguments to actually force her removal before she's actually been able to challenge her removal.

[00:09:48] Speaker 9: Do you think, Carrie, we'll get this decision at the very end of the term in June because of the implications here?

[00:09:54] Speaker 8: It's hard to say. The Supreme Court did take this case as an emergency application, and so that tends to indicate that they thought that there was an urgency to it. But at the same time, some of the questions from the justices did pertain to whether there's really any harm in her remaining in her position, particularly because the allegation that the Trump administration has made is not that she has done anything improper or illegal while she's been serving as a governor, but instead the conduct that they're alleging pertains to an action that she took, is alleged to have taken prior to becoming a governor.