The Sinking Fund Precedent: An Originalist Defense of Regulatory Independence

“The executive Power shall be vested in a President of the United States." With these words from Article II, President Trump has launched a constitutional revolution that threatens the structure of American governance. In a breathtaking display of executive power, Trump has summarily dismissed Federal Trade Commission Commissioner Rebecca Slaughter, National Labor Relations Board Chair Gwynne Wilcox, and Merit Systems Protection Board Chair Cathy Harris—officials who, by statutory design and longstanding practice, were protected from precisely such political removals.

This is no mere bureaucratic reshuffling. It represents nothing less than a frontal assault on the constitutional architecture that has structured our government for generations. What's at stake? The President's ability to manipulate interest rates before elections by firing Federal Reserve governors. The power to punish media companies by removing FCC commissioners who don't favor the President's allies. The capacity to neuter election enforcement by dismissing FEC commissioners who insist on applying campaign finance laws to the President's supporters.

This constitutional crisis arrives with a supreme irony: the architects of this "unitary executive" revolution claim the mantle of originalism while ignoring or dismissing compelling evidence from the founding era itself. The Constitution they invoke bears little resemblance to the document ratified in 1789 or the government established under it. Far from commanding absolute presidential control over all administration, America's founding texts and practices tell a far more nuanced story—one that legitimizes meaningful limits on presidential control over certain regulatory functions.

Let us unfold this constitutional tale, one that begins not with modern bureaucrats but with the Framers themselves.

Originalism and the Weakly Unitary Executive

Advocates of a "strong unitary" executive branch insist that Article II's vesting of executive power in "a President of the United States" and the Take Care Clause command absolute presidential control over all executive functions, including plenary removal authority over every official exercising administrative power. Under this view, any congressional attempt to insulate an official from at-will removal by the President is presumptively unconstitutional.

But this absolutist reading is more spider's web than constitutional bedrock, a selective rather than faithful reading of what the Constitution requires, as Justice Holmes feared. Originalist interpretation demands we examine not just isolated constitutional phrases, but how the founding generation interpreted and implemented them. And here, the historical record offers compelling evidence for what I call a "weakly unitary" executive—one where Congress has meaningful authority under the Necessary and Proper Clause to structure administration in ways that secure good governance while respecting presidential authority.

Consider the text itself. Article II vests "the executive Power" in a President but tells us precious little about what constitutes "executive power" or how it must be exercised. The Opinion in Writing Clause explicitly gives the President authority to "require the Opinion, in writing, of the principal Officer in each of the executive Departments," but if the President already possessed absolute control over all executive officers, why would the Framers specify this particular power? The Constitution's explicit enumeration of this presidential prerogative strongly suggests the President's authority over administration was understood to have meaningful limits.

The Sinking Fund Commission: America's Original Independent Agency

The smoking gun in this constitutional debate—one that advocates of the strong unitary executive theory consistently underplay—is the Sinking Fund Commission established in 1790 by the First Congress and signed by President George Washington. This early institution, created to manage the repayment of Revolutionary War debt, represents nothing less than an originalist precedent for administrative independence.

What was the Sinking Fund Commission? Created by statute in August 1790, it constituted a five-member board that included the Secretary of the Treasury (Alexander Hamilton), the Secretary of State (Thomas Jefferson), the Attorney General (Edmund Randolph), Vice President John Adams, and Chief Justice John Jay. This Commission controlled the disbursement of funds that Congress had already allocated to repay the national debt.

The historical context is crucial. In England, sinking funds had a poor track record because political actors routinely raided them for other spending purposes. Hamilton's writings explicitly acknowledged this concern and emphasized the need for "inviolable application" of funds set aside for debt redemption. To achieve this independence from potential executive interference, Congress deliberately structured the Commission with ex officio members that the President could not unilaterally remove from their underlying positions.

This matters immensely. The President had no constitutional authority to remove the Chief Justice or the Vice President from their offices and therefore had no power to replace these officials on the Commission. This was a deliberate feature, not a bug—the Commission was intentionally structured to prevent the President from unilaterally controlling the disbursement of these congressionally-allocated funds.

Consider the practical implications: If the President wished to divert these funds for other purposes (perhaps to fund a war or meet some other emergency), he could not simply replace Commission members until he found those who would approve his preferred expenditures. The Commission's independent structure ensured that money allocated for debt reduction would actually be used for that purpose.

This structure bears a striking resemblance to modern independent agencies. Just as the Federal Reserve's independence enables monetary policy to function without short-term political interference, the Sinking Fund's independence protected fiscal policy from presidential pressure. In both cases, the core constitutional value at stake is preventing the consolidation of too much financial power in presidential hands—a concern deeply rooted in republican principles dating to 1790.

Importantly, this wasn't some minor experiment or constitutional aberration. Washington signed this law without constitutional objection. John Marshall and James Madison served on the Commission in later years without raising constitutional concerns. The Sinking Fund remained a core institution of American governance for decades, with its basic independence-protecting structure intact.

Beyond the Sinking Fund: A Pattern of Early Administrative Experimentation

The Sinking Fund Commission was not an isolated case but part of a broader pattern of administrative experimentation in the early republic that belies the strongly unitary executive theory.

Consider the Post Office under President Washington. Established by the Post Office Act of 1792, this institution became one of early America's largest and most important administrative agencies. Crucially, while the Postmaster General served at the pleasure of the President, the vast network of local postmasters enjoyed a significant degree of practical independence. The Act contained detailed instructions for postmasters and postal operations that constrained presidential discretion. Local postmasters were understood to have protection from politically-motivated interference, as they performed functions requiring neutrality and trustworthiness. Washington himself recognized these constraints, never asserting unlimited control over postal operations.

The First Bank of the United States, championed by Hamilton and approved by Washington, likewise operated with meaningful independence from direct presidential control. Its directors, while nominated by the President, functioned with significant autonomy in making monetary and fiscal decisions—an arrangement that resembles modern financial regulatory agencies.

During the Civil War and Reconstruction, this pattern of administrative experimentation continued. The Freedmen's Bureau, established in 1865, represents another historical precedent for independent administration. Created to assist formerly enslaved people's transition to freedom, the Bureau exercised a remarkable range of functions—distributing food and medical supplies, establishing schools, supervising labor contracts, and even adjudicating disputes. While nominally within the War Department, the Bureau operated with considerable autonomy to fulfill its humanitarian and administrative mission.

As legal historian Jerry Mashaw has meticulously documented in his book "Creating the Administrative Constitution," the early republic witnessed a diverse array of administrative structures that didn't conform to a strong unitary model. The First Congress routinely enlisted judges and private parties to check executive officers' conduct in various capacities.

These historical practices reveal that the Constitution's original public meaning allowed for substantive congressional structuring of administration, including independence-protecting features in certain contexts. This doesn't mean Congress could create unlimited obstacles to presidential control—the Constitution clearly establishes a single chief executive with broad supervisory powers. But it does mean the Constitution's framers understood executive power in more nuanced ways than modern unitary executive proponents suggest.

Humphrey's Executor and Constitutional Evolution

The Supreme Court's 1935 decision in Humphrey's Executor v. United States, upholding the independence of the Federal Trade Commission, is often portrayed by unitary executive theorists as a radical departure from original understanding. But in light of the historical evidence, it's more accurately understood as a recognition of constitutional practices dating to the founding.

True, the FTC of 1935 was not identical to the Sinking Fund Commission of 1790. But both institutions reflected similar constitutional principles: that certain governmental functions benefit from insulation from direct presidential control, that Congress has authority under the Necessary and Proper Clause to structure administration accordingly, and that such structures don't fundamentally undermine the President's ability to fulfill constitutional obligations.

In Seila Law v. Consumer Financial Protection Bureau (2020), Chief Justice John Roberts attempted to distinguish Humphrey's Executor on the narrow ground that it involved a multi-member commission rather than a single director. But this distinction finds little support in constitutional text or original understanding. The Sinking Fund precedent suggests that what matters constitutionally is not the number of heads, but the nature of the function being performed and the structural needs of good governance.

The Constitutional Stakes of Today's Removal Controversy

President Trump's dismissals of independent agency officials is not merely a technical dispute over removal authority—it represents a frontal assault on the constitutional understanding that has structured American governance for generations. If validated by the courts, it would concentrate unprecedented power in presidential hands, allowing the President to exercise direct control over monetary policy, fair competition, labor relations, and election administration.

Consider the FTC specifically. Commissioner Rebecca Slaughter was dismissed not because of "inefficiency, neglect of duty, or malfeasance in office"—the statutory standard that has protected commissioners' independence for generations—but rather because her policy views diverged from the President's. If this stands, future presidents could dismiss Federal Reserve governors who refuse to lower interest rates before elections, FCC commissioners who don't favor the President's political allies in media regulation, or FEC commissioners who insist on enforcing campaign finance laws against the President's supporters.

This is precisely the concentration of power that the founding generation feared and designed institutions to prevent. The Sinking Fund Commission was created precisely because the founders understood that certain governmental functions required insulation from direct presidential control to function effectively. Modern independent agencies serve this same constitutional purpose.

Presidential Practice and Constitutional Settlement

Proponents of the strong unitary executive theory sometimes claim that presidents have consistently opposed independent agencies throughout American history. But the historical record tells a different story. Between Franklin Roosevelt (who did challenge the FTC's independence in Humphrey's Executor) and Donald Trump, no president explicitly argued that independent agencies were unconstitutional or claimed the power to remove commissioners at will.

Instead, presidents from both parties have appointed commissioners, respected statutory removal protections, and worked within the established framework of independent agencies. Even when presidents chafed at particular agency decisions, they did not assert constitutional authority to simply fire commissioners whose policy views they disliked. This consistent executive practice represents a form of constitutional settlement that deserves significant weight in constitutional interpretation.

The fact that presidents and Congress have continued to create and maintain independent agencies, within the basic framework established by Humphrey's Executor, reflects a constitutional understanding that has been woven into the fabric of American governance. This doesn't mean the Court must slavishly follow every aspect of this practice, but it does suggest that the core constitutional principle—that Congress can create agencies with meaningful independence from direct presidential control—has been accepted by all three branches of government for generations.

A Path Forward: Preserving Constitutional Balance

How should courts resolve this controversy? By recognizing that the Constitution permits varied administrative structures based on the function being performed and the needs of good governance. This approach respects both original understanding, as exemplified by the Sinking Fund Commission, and the constitutional settlements that have developed over time.

Some agencies and functions properly belong under direct presidential control. Others—particularly those involving monetary policy, market competition, or fair elections—benefit from meaningful independence. The key constitutional question isn't whether all executive power must be subject to presidential control, but rather what kinds of structural arrangements best serve constitutional values while preserving the President's ability to fulfill constitutional obligations.

This approach would uphold the independence of multi-member regulatory commissions like the FTC, FCC, SEC, and Federal Reserve, while perhaps finding more direct presidential control appropriate for certain single-headed agencies or those exercising core foreign affairs and national security functions. It would respect Congress's authority to structure administration under the Necessary and Proper Clause, while preserving the President's constitutional role as chief executive.

In the specific cases now percolating through the courts, this approach would likely find Trump's dismissal of FTC and NLRB commissioners unconstitutional, as those officials serve on multi-member bodies with statutory protection from at-will removal. For the Merit Systems Protection Board Chair, the question would turn on the specific nature of that office's functions and its structural relationship to core executive powers.

Conclusion: Constitutional Fidelity and Constitutional Balance

The debates over the unitary executive theory aren't merely academic—they go to the heart of how our constitutional democracy functions. A proper originalist approach recognizes that the Constitution's framers created a chief executive with significant powers, but did not envision a president with unfettered control over all administration. The Sinking Fund Commission stands as compelling evidence that the founding generation understood congressional authority to include the power to create administrative bodies with meaningful independence from direct presidential control.

The Constitution's core values—preventing the concentration of too much power in any one branch while enabling effective governance—are best served by preserving the constitutional balance that independent regulatory commissions represent. Courts should reject extreme claims of presidential removal power and instead reaffirm the constitutional understanding that has structured American governance since the republic's earliest days: that certain governmental functions, properly authorized by Congress, may be performed with a measure of independence that serves rather than undermines our constitutional design.

Mauni Jalali is an Associate at Quinn Emanuel Urquhart & Sullivan, LLP. A graduate of Yale Law School, Class of 2022, he previously worked for the Senate Judiciary Committee and was a law clerk for the Honorable John C. Coughenour. He is a member of the American Constitution Society.