DiGenova, Toensing to Newsmax: Trump, Powell Playing Game of Chicken

The way Joe diGenova, former U.S. attorney for Washington, D.C., and Victoria Toensing, former chief counsel for the Senate Intelligence Committee, see it, President-elect Donald Trump and Federal Reserve Chair Jerome Powell are playing a game of chicken when it comes to the latter remaining in his position once the former is sworn into office in January.

Some of Trump's advisers have reportedly called on Powell to resign, but he has said he will not resign and cannot be fired, even if the incoming president wants to appoint a new Fed chair.

During a Tuesday appearance on Newsmax's "The Chris Salcedo Show," Toensing said that "the Fed is constitutional," but the "bad statutory writing" was "silent on how you could get rid of the chairman."

"And so Powell's position is it's silent so I can stay," Toensing said. "This is really not a legal issue; it's a game of chicken. If Trump wants him to go and Powell doesn't budge, then they go to the courts to decide it. But back in the early 1920s, the Supreme Court decided that the president really is unencumbered, generally, in getting rid of people in the executive branch. So, we'll see where it stands."

DiGenova said that the statute governing Fed members' terms "speaks to" a president's ability to fire them or appoint someone to replace them under certain circumstances.

"It says that the members of the Federal Reserve, during their 14-year terms, can be removed for cause," diGenova said. "So, Congress has outlined that it has to be for cause. Now, Congress could change that and say they can stay at will and the president can remove them. In addition, the constitutional question about whether or not these independent regulatory agencies can be controlled by a president, by hiring and firing, has been unanswered by the Supreme Court.

"Cases about that are coming through the system, and the Supreme Court may eventually decide that issue, but right now, if Trump were to try to remove him, Jerome Powell could litigate it," he continued. "By the way, the Fed does not have standing to sue on its own behalf. It cannot sue on its own behalf, so Powell would have to pay for his representation out of his own pocket."

Toensing added that "that's one reason I call it a game of chicken: because when you're thinking of paying legal bills out of your pocket, it's a different issue."

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