Economics

The US Supreme Court is primed to recalibrate government power

Published

1 year ago

April 5, 2024

Business Finance News

Listen to this story.

Enjoy more audio and podcasts on iOS or Android.

Your browser does not support the <audio> element.

TWO WEEKS before America’s Supreme Court considers whether Donald Trump may constitutionally remain on the presidential ballot, it will tackle a question closely tied to Mr Trump’s deregulatory plans for a second term. The power of some 436 federal agencies that do the bulk of the work of the federal government—from food safety to banking rules to pollution control—comes under the justices’ scrutiny on January 17th.

Herring—a silvery fish of the North Atlantic that can be smoked, pickled or, when young, tinned—is the unlikely star of Loper Bright Enterprises v Raimondo and Relentless v Department of Commerce. Both cases involve herring fishermen upset with the National Marine Fisheries Service (NMFS), a federal agency charged with safeguarding America’s ocean resources and habitat.

Drawing on a line in a statute giving the agency licence to make regulations that are “necessary and appropriate…to prevent overfishing and rebuild overfished stocks”, in 2020 the NMFS required fishermen to bring an observer along with them on their boats—and to pay that person’s per-diem fee themselves. Space on these vessels is a “scarce and precious resource”, the fisheries’ lawyer argues, making the NMFS’s rule (which was suspended in April 2023) an “enormous imposition”. Making the fishermen foot the bill “adds insult to injury”.

The rule nevertheless found receptive audiences at two of America’s appellate courts. In allowing the agency to impose the regulation, three-judge panels on both courts turned to a Supreme Court decision, Chevron USA v Natural Resources Defence Council, that has managed the inter-branch balance of power since 1984.

Chevron has two steps. First, judges determine if a law governing an administrative agency speaks clearly. If it does, judges interpret it themselves and tell the agencies what the law means. But if judges believe the law is ambiguous, they give bureaucrats the benefit of the doubt. At this second step, if the court sees the agency’s interpretation as reasonable—even if it is not the interpretation the court thinks best—it defers to the agency. In Loper Bright and Relentless, the circuit courts concluded that the law in question is ambiguous and that the NMFS’s interpretation of it is reasonable.

Chevron was popular among conservative justices in its early days. Five years after it was decided, Antonin Scalia (an arch-conservative justice who died in 2016) gave a lecture at Duke Law School in which he predicted that agency deference would endure as it “reflects the reality of government” and “serves its needs”. Yet two justices on the court today—Neil Gorsuch and Clarence Thomas—have made clear their deep disdain for what has become known as “Chevron deference”.

In a 2015 case involving the Environmental Protection Agency, Justice Thomas wrote that the wide berth Chevron afforded bureaucrats meant the court was “blithely giving the force of law” to “agency ‘interpretations’ of federal statutes” (note the scare quotes) and thereby straying “further and further from the constitution”. For Justice Gorsuch, who was railing against Chevron when he was still a judge on the 10th circuit court of appeals, agency deference is akin to “judicial abdication”.

The plaintiffs in Loper Bright and Relentless are banking on at least three more justices keen on reining in the administrative state. It may be a good bet. Brett Kavanaugh, two years before he became a justice, raised critical questions about Chevron in an article in the Harvard Law Review. The conservative majority has not invoked Chevron since 2016. The plaintiffs write that the doctrine has been “the-case-which-must-not-be-named” at the high court for years; the conservative court may see this as the moment to give Chevron, as Justice Gorsuch put it in 2022, “a tombstone no one can miss”.

Dozens of friend-of-the-court briefs urge the justices to do just that: bury-Chevron filings outnumber save-Chevron briefs by a ratio of four to one. But the implications of ditching the 40-year-old precedent are contested. For the plaintiffs, “Chevron’s primary victim is the citizenry” because the approach “literally gives the tie to their regulators in every close case”.

Not all regulations, though, are as hard to swallow as forcing fishermen to dole out up to a fifth of their profits to an on-board observer. Federal agencies, staffed by some 2.2m civil servants with expertise that judges often lack, protect workplace safety and respond to natural disasters. They keep aeroplanes and financial markets aloft. The government warns that abandoning Chevron—which lower courts continue to rely on even as the Supreme Court has quietly ignored it—would “threaten settled expectations in virtually every area of conduct regulated by federal law”. ■

Stay on top of American politics with Checks and Balance, our weekly subscriber-only newsletter, which examines the state of American democracy and the issues that matter to voters.

Economics

Checks and Balance newsletter: The Democrats’ future is up for grabs

Published

28 minutes ago

April 19, 2025

Business Finance News

Checks and Balance newsletter: The Democrats’ future is up for grabs

Economics

Trump’s approval rating on economy at lowest of presidential career

Published

4 hours ago

April 19, 2025

Business Finance News

President Donald Trump is registering the worst economic approval numbers of his presidential career amid broad discontent over his handling of tariffs, inflation and government spending, according to the latest CNBC All-America Economic Survey.

The survey found that the boost in economic optimism that accompanied Trump’s reelection has disappeared, with more Americans now believing the economy will get worse than at any time since 2023 and with a sharp turn toward pessimism about the stock market.

The survey of 1,000 Americans across the country showed 44% approving of Trump’s handling of the presidency and 51% disapproving, slightly better than CNBC’s final reading when the president left office in 2020. On the economy, however, the survey showed Trump with 43% approval and 55% disapproval, the first time in any CNBC poll that he has been net negative on the economy while president.

Trump’s Republican base remains solidly behind him, but Democrats, at -90 net economic approval, are 30 points more negative than their average during his first term, and independents are 23 points more negative. Blue collar workers, who were key to the president’s election victory, remain positive on the Trump’s handling of the economy, but their disapproval numbers have shot up by 14 points compared to their average for his first term.

“Donald Trump was reelected specifically to improve the economy, and so far, people are not liking what they’re seeing,” said Jay Campbell, partner with Hart Associates, the Democratic pollster on the survey.

The poll was conducted April 9 through 13th and has a margin of error of +/-3.1%.

The results show that Trump has so far been able to convince only his base that his economic policies will be good for the country over time: 49% of the public believe the economy will get worse over the next year, the most pessimistic overall result since 2023. That figure includes 76% of Republicans who see the economy improving. But 83% of Democrats and 54% of independents see the economy getting worse. Among those believing the president’s policies will have a positive impact, 27% say it will take a year or longer. However, 40% of those who are negative about the president’s policies say they are hurting the economy now.

“We’re in a turbulent, kind of maelstrom of change when it comes to how people feel about what’s going to happen next,” said Micah Roberts, managing partner with Public Opinion Strategies, the Republican pollsters for the survey. “The data… suggests more than ever that it’s the negative partisan reaction that’s driving and sustaining discontent and trepidation about what comes next.”

While partisanship is the most significant part of the president’s negative showing, he loses some support among Republicans in key areas like tariffs and inflation, and has seen a notable deterioration among independents.

Tariffs look to be a substantial part of the overall public’s discontent. Americans disapprove of across-the-board tariffs by a 49 to 35 margin, and majorities believe they are bad for American workers, inflation and the overall economy. Democrats give tariffs a thumbs down by an 83-point margin and independents by 26 points. Republicans approve of the tariffs by a 59-point spread — 20 points below their 79% net approval of the president.

Large majorities of Americans see Canada, Mexico, the EU and Japan as more of an economic opportunity for the United States rather than an economic threat. In fact, all are viewed more favorably than when CNBC asked the question during Trump’s first term. The data suggest the public, including majorities of Republicans, do not embrace the antipathy the president has expressed towards those trading partners. On China, however, the public sees it as a threat by a 44% to 35% margin, substantially worse than when CNBC last asked the question in 2019.

The president’s worst numbers come on his handling of inflation, which the public disapproves of by a 37 to 60% margin, including strong net negatives from Democrats and independents. But at 58%, it’s the lowest net positive approval from Republicans for any of the issues asked about the president. 57% of the public believe we will soon be, or are currently in, a recession, up from just 40% in March 2024. The figure includes 12% who think the recession has already begun.

The public also disapproves of the president’s handling of federal government spending by a 45% to 51% and foreign policy by a 42% to 53% margin.

Trump’s best numbers come on immigration, where his handling of the Southern border is approved by a 53% to 41% margin, and deportation of illegal immigrants is approved 52% to 45%. The president achieved a slight majority of support from independents on deportations and 22% support from Democrats on the Southern border. While still modest, it’s the best-performing issue for Trump among Democrats.

Meanwhile, Americans have turned more negative on the stock market than they’ve been in two years. Some 53% say it’s a bad time to invest, with just 38% saying it’s a good time. The numbers represent a sharp turnaround from the stock market optimism that greeted the president’s election. In fact, the December survey represented the sharpest swing toward market optimism in the survey’s 17-year history and the April survey is the sharpest turn towards pessimism.

The president’s troubles with his approval rating do not appear to be translating for now into significant potential gains for Democrats. Asked about congressional preference, 48% of the public support Democratic control and 46% support Republican control, barely changed from CNBC’s March 2022 survey.

Get Your Ticket to Pro LIVE

Join us at the New York Stock Exchange!
Uncertain markets? Gain an edge with CNBC Pro LIVE, an exclusive, inaugural event at the historic New York Stock Exchange.

In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12.

Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!

Economics

‘He should bring them down’

Published

1 day ago

April 18, 2025

Business Finance News

U.S. President Donald Trump and U.S. Federal Reserve Chair Jerome Powell.

Win McNamee | Annabelle Gordon | Reuters

President Donald Trump on Friday lobbed his latest criticism at Federal Reserve Chair Jerome Powell, as the White House’s discontent for the economic policy leader hits a fever pitch.

During a Friday afternoon question-and-answer session with reporters, Trump pointed to examples of prices going down.

“If we had a Fed Chairman that understood what he was doing, interest rates would be coming down, too,” Trump said. “He should bring them down.”

Trump has long argued that the Fed, which sets monetary policy in the U.S., should cut down interest rates. His latest comments come as the White House has ratcheted up its attacks on Powell in recent days.

White House economic adviser Kevin Hassett said Friday that Trump and his team are assessing whether they can remove the Fed chair. Powell has said previously that he cannot be fired under law and intends to serve through the end of his term as chair in May 2026.

“The president and his team will continue to study that matter,” Hassett said at the White House after a reporter questioned if firing Powell “is an option in a way that it wasn’t before,” according to Reuters.

Trump posted on Truth Social on Thursday that “Powell’s termination cannot come fast enough.” His post included the nickname of “Too Late” for Powell, a continuation of Trump’s habit of giving satirical titles to political rivals.

His use of the word “termination” raised questions around if Trump was referring to Powell’s potential removal from his post ahead of schedule. Hassett said on Friday the administration will look at if there’s “new legal analysis” that would allow for Powell’s firing.

Powell appeared to irk Trump after saying Wednesday that the president’s contentious tariff plan could drive up inflation in the near-term and create challenges for the central bank in managing goals of high employment rates and price stability. Powell said Trump’s levies — many of which are currently on pause — are “likely to move us further away from our goals.”

“We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” Powell said in prepared remarks before the Economic Club of Chicago. “If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close.”

Powell also said that the Fed was “well positioned to wait for greater clarity before considering any adjustments to our policy stance.”

The Federal Open Market Committee has its borrowing rate currently targeted in a range between 4.25% and 4.5%, where it has sat since December. Fed funds futures are pricing in a more than 90% likelihood that the central bank holds rates steady again at its policy meeting next month, according to CME’s FedWatch tool.

As Trump’s team has scaled up criticisms, some Democrats have gone on defense. Sen. Elizabeth Warren, D-Mass., warned on Thursday that a president firing the Fed chief would be dire for U.S. financial markets.

“Understand this: If Chairman Powell can be fired by the president of the United States, it will crash markets in the United States,” Warren said on CNBC.