Cozen Currents: Courting Power

“The Supreme Court’s conservative majority’s recent decisions have expanded the power of the presidency, opening the door for President Donald Trump — and future Oval Office occupants — to push the envelope of executive influence.” — Howard Schweitzer, CEO, Cozen O’Connor Public Strategies

The Cozen Lens

• In its recently concluded 2025-26 term, the Supreme Court made rulings in two major cases impacting federal agencies traditionally considered independent.
• The Republican Party’s foreign policy debate ahead of the 2028 election cycle pits an old guard interventionist tradition against MAGA’s America First nationalist philosophy, with China and Israel policy emerging as two key tests of where candidates stand.
• Senate GOP leadership plans to hold a floor vote on the crypto market structure bill known as the CLARITY Act before the August recess — a deadline lawmakers and analysts view as crucial if the bill is to become law this year. But with several issues still outstanding, its fate remains uncertain.

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The Supreme Expansion of Executive Power

Independent Agencies Are Not So Independent. In a recent decision, the Supreme Court (SCOTUS) reversed job protections for appointees of federal agencies previously considered independent of the White House.

• In Trump v. Slaughter, the Court’s conservative majority ruled that the president has the power to fire members of erstwhile independent agencies, overturning a 90-year-old precedent, Humphrey’s Executor. The case was brought by Rebecca Slaughter, a former Democratic commissioner on the Federal Trade Commission (FTC), who was fired by President Trump.
• Under the previous precedent, a president could only fire FTC commissioners and appointees at similar agencies for cause. While presidents could always appoint a majority of appointees belonging to their party, the once-independent agencies traditionally operated at a greater distance from the Oval Office.
• For example, former President Barack Obama attracted criticism from the right for calling on the Federal Communications Commission (FCC) to adopt net neutrality. In February 2016, the Republican-controlled Senate Homeland Security and Governmental Affairs Committee released a report titled “Regulating the Internet: How the White House Bowled Over FCC Independence.”
• While the case was about the FTC, the SCOTUS decision is relevant for other multi-member boards. Last week, Deirdre Hamilton, a former Democratic member of the National Mediation Board, which handles airline and rail labor disputes, dropped her legal challenge to her 2025 firing by Trump.

Implications of Slaughter. The ruling expands executive power over federal agencies.

• The president will now have greater direct control over these agencies. Presidents could always choose their own nominees, but once appointed, officials may not always have acted in the ways the president who picked them may have predicted or wanted. Knowing that they serve at the pleasure of the president, like members of the Cabinet, agency leaders will now have an incentive to take cues from the White House.
• In particular, appointees from the minority party will have less of a megaphone because they will be vulnerable to presidential dismissal. Even if they didn’t control the agenda, minority members could seek to influence the majority or leverage dissents to stake out their own positions for the next time they held the majority.
• The ruling may also create greater regulatory uncertainty for the business community. The independent agency structure provided appointees with a certain degree of insulation from day-to-day politics. This allowed for some continuity across administrations and gave the minority party a voice in the policymaking process.
• If agencies act as merely an extension of the White House, then they will be poised for dramatic shifts when control of the presidency changes. While tighter presidential control over federal agencies could allow a future president’s handpicked board to execute the White House’s agenda more quickly, it could also leave policy achievements more vulnerable to being rolled back when new parties come into power. The Slaughter decision empowers Trump now, but it will also give greater authority to future presidents.

Implications of Cook. While SCOTUS ruled against Slaughter, a majority of justices sided with Federal Reserve Board Governor Lisa Cook.

• In Trump v. Cook, Chief Justice John Roberts and Justice Brett Kavanaugh joined the Court’s three liberal justices in ruling that the president couldn’t remove Cook from office while litigation over Trump’s effort to fire her for alleged mortgage fraud remains ongoing. The upshot of the ruling was to draw a distinction between the Fed and other agencies.
• While the Cook decision is a victory for central bank independence, the Court’s ruling also raised some big questions and it’s not clear where Trump’s crusade against Cook will go next. The decision didn’t address the legal framework for how Trump could fire Cook or the specific allegations against her. The president has since promised in a social media post to “take appropriate action immediately” in the Cook situation. Trump’s feud with Cook may not be over and if it escalates, the Court could be asked to weigh in again.

GOP Foreign Policy at a Crossroads

The GOP’s Growing Hawk-Dove Divide. As the Republican Party begins to turn its eyes toward the 2028 presidential election, one of the most divisive splits in the party will be over how interventionist its foreign policy should be.

• Senator Lindsey Graham’s (R-SC) passing represents a significant loss for the hawkish philosophy associated with the party’s establishment, as he consistently served as a champion of a more interventionist approach. Still, he was not alone in this view, with other notable proponents including Senator Tom Cotton (R-AR), Secretary of State Marco Rubio, and House Armed Services Committee Chair Mike Rogers (R-AL).
• On the other side are Republicans who have been more cautious about the US taking such an active role in the world, including Vice President JD Vance. This group rose to prominence as part of President Trump’s America First ethos, though some have felt frustrated with the more active use of the military that Trump has employed during his second term.
• In the 2028 Republican presidential primary, candidates will have to decide where they fall on this axis. This could be particularly challenging for Vance, as he will likely walk a tightrope between defending the Trump administration’s more hawkish foreign policy while staying true to his more non-interventionist tendency that grew out of his disillusionment with the Iraq War in which he served as a Marine.

The Major Fault Lines. Aside from this larger philosophical divide, there are some specific key issues of contention within the Republican Party over how best to pursue foreign policy, including on how aggressively to compete with China and how the US should approach its relationship with Israel.

• On China, while there is a general consensus that the US should work to outcompete its rival, there is a split over how best to achieve this objective. One of the starkest areas of this disagreement is on how to handle export controls. The Trump administration is currently pursuing a novel method, championed most vociferously by former White House AI and Crypto Czar David Sacks, that aims to have China become “addicted” to the US tech stacks. In contrast, most congressional GOP China hawks have advocated for a more traditional approach that would seek to limit China’s access to advanced technology.
• Support for Israel has become a prominent flashpoint in Democratic politics, but it is also becoming a dividing issue for Republicans. In particular, Vance has come under some fire for his role in negotiating the failed cease-fire memorandum of understanding with Iran and his pointed public criticism of Israeli leaders. Even if the US-Iran conflict concludes before the 2028 primary season gets underway, it has put a spotlight on the US-Israel relationship that candidates will be expected to take a stance on.

Seeking Some CLARITY on Crypto

The Politics of a Crypto Market Structure Vote. Even if senators can’t resolve every policy issue that stands between them and a bipartisan deal, GOP leadership is incentivized to hold a vote on the crypto market structure bill known as the CLARITY Act before the month-long August recess starts.

• Since the beginning of the year, lawmakers, the White House, and outside stakeholders have focused on passing the market structure bill before the August recess, aware that midterm campaigning truncates the back half of the year’s legislative calendar. The balance of power in Congress could then flip after the November elections, further complicating negotiations. Despite this shared urgency, negotiations have dragged on: first through a multi-month delay over stablecoin yield language, and now over the three issues that continue to divide the parties: officeholder ethics, illicit finance, and components of the Senate Agriculture Committee’s portion of the text.
• With the August deadline approaching, lawmakers in both parties are under pressure to advance the bill, but those same midterm-related dynamics are also complicating the effort. Because the legislation is a key White House and GOP priority, Democrats, in particular, are incentivized to use their leverage in the Senate minority to extract concessions they can sell to their voters. Chief among these is legislative language on “officeholder ethics,” the single biggest issue still holding up talks. Even the most pro-crypto Democrats want the bill to include language restricting lawmakers, White House officials, and government staffers from profiting from crypto-related activities. This issue is made more pressing by the Democrats’ intention to make rooting out corruption central to their electoral message.
• Regardless of whether negotiators can reach an agreement on key outstanding issues such as ethics, GOP lawmakers are signaling that a vote is coming before the Senate’s anticipated break for its recess on August 7th. For GOP leadership, all incentives align to hold the vote even if it ends up being partisan. If the issues get ironed out before the bill comes to the floor, it passes as they hope. If things remain unresolved, Democrats are put on record blocking the crypto industry’s top legislative priority just months before the midterms. The industry’s super PAC network entered this cycle with nearly $200 million in the bank and has already spent heavily in primaries, raising the stakes of that vote for members of both parties.

Where Negotiations Stand. With a potential vote looming, senators and the White House are engaged in ongoing negotiations and are promising updated legislative text as soon as this week.

• Much of the current talks center on ethics, which Democrats have made clear is central to their support (or lack thereof) for the bill. Senator Ruben Gallego (D-AZ) told Politico last week, “At the end of the day, we don’t have strong ethics. I don’t care what the president says. You’re not going to have the Democratic votes.” Negotiators, including Gallego, neared an ethics deal around the May Banking Committee markup, but it collapsed in June over how the guardrails would be enforced according to Crypto in America. Any new landing spot will need sign-off from both Democrats and President Trump himself. Senators Cynthia Lummis (R-WY) and Bernie Moreno (R-OH) briefed Trump late last week, with a particular focus on ethics per CoinDesk.
• While secondary to the issue of ethics, another major unresolved issue is language governing illicit finance. Law enforcement groups and key Democrats remain concerned that the Blockchain Regulatory Certainty Act, a provision of the bill that would exempt certain software developers from money-transmitter registration and related anti-money-laundering requirements, would weaken law enforcement’s ability to pursue criminals. In recent weeks, White House engagement has softened opposition from a handful of law enforcement groups including NOBLE and the Major County Sheriffs of America, but several others remain opposed.
• A handful of other issues also remain, many of which are concentrated within the Agriculture Committee’s portion of the bill. A central sticking point is the administration’s commitment to appointing a full, bipartisan slate of commissioners to the Commodity Futures Trading Commission. Crypto in America also reports there are other unresolved questions regarding federal preemption of state law, exchange conflict-of-interest rules, and affiliate-trading limits. However, if the thorny ethics issue can be resolved, the remaining outstanding issues should likely also be resolved in time to meet the August deadline.

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