When President Donald Trump took office on Jan. 20 for the second time, he stood in the Capitol rotunda and laid out the challenges facing our country as he saw them.
Those challenges were familiar to anyone who had watched the Republican during his 2024 campaign: Undocumented immigration was high on the list, as was American entanglement in foreign affairs and a lackluster disaster response. The blame for those challenges, Trump said, lay with a "radical and corrupt establishment" that has "extracted power and wealth from our citizens while the pillars of our society lay broken and seemingly in complete disrepair.
"My recent election," he continued, "is a mandate to completely and totally reverse a horrible betrayal and all of these many betrayals that have taken place and to give the people back their faith, their wealth, their democracy, and, indeed, their freedom. From this moment on, America's decline is over."
Over the next 100 days, Trump embarked on a program of reforming not only rules and policy but also the
"Purely from a theory of the constitutional executive, we've never seen anything like this," said Peter Conti-Brown, Class of 1965 associate professor of financial regulation at the Wharton School of the University of Pennsylvania and nonresident fellow at the Brookings Institution. "It's just this unleashing of addition by subtraction. He's trying to delete so much from the preexisting set of institutions, so that what's left over can be reshaped into his image. This is a Trumpian vision — it's not even a conservative one."
Presidents tend to come into office with ambitious goals. Barack Obama aimed to modernize the financial system, improve access to health care and address climate change. George W. Bush opened his second term with a plan to privatize Social Security; Ronald Reagan zeroed in on tax reform in his first 100 days. Not all of those initiatives succeeded — or if they did, they were tempered by the forces of politics and process over time.
The first 100 days of Trump's second term, by contrast, have been less about enacting policies as they have been about changing the paradigms of how federal power is wielded — and by whom. But whether those changes stick over the course of the remaining 1,360 days of the Trump administration and beyond will depend on whether and how courts, Congress, markets and voters react to the new normal.
Unitary executive theory in practice
One of the hallmarks of Trump's new term has been an expansive view of the president's power over the administrative state, embodied by what's called "unitary executive theory." But to understand that, one needs to understand the backstory behind how executive power has been exercised over time.
Article II of the U.S. Constitution holds that "the executive Power shall be vested in a President of the United States of America" — in other words, those powers vested by Congress in the executive are ultimately vested in the president. For the first 100 years or so of the nation's history, the president was regarded as the primary agent of executive power, but the exercise of that power typically came in the form of appointments of party loyalists to federal jobs. That practice, known as the "spoils system" of government, had antecedents that date to the colonial era but has become credited to Andrew Jackson, who installed many of his supporters upon his presidential victory in 1828.
The drawbacks to that arrangement were apparent even to contemporaneous observers. Public offices — or, more accurately, their salaries and/or revenues — served as rewards for party loyalty rather than jobs that required competent execution, and as a result incompetence and graft were the norm rather than the exception. Humorist Mark Twain complained in 1876 that one "will not hire a blacksmith who never lifted a sledge" nor "hire a schoolteacher who does not know the alphabet … but when you come to our civil service, we serenely fill great numbers of our minor public offices with ignoramuses."
The problem seemed intractable in the United States during the 19th century as the job of civil service reform fell to politicians whose parties were beholden to the status quo. It took the assassination of President James Garfield in 1881 by a disturbed office seeker to spur his successor, President Chester Arthur, to push a reform bill known as the Pendleton Act through Congress in 1883. That law established the first merit-based hiring mechanism for civil service jobs, insulating most federal employees from political considerations during the hiring process and protecting them from dismissal when new administrations take power.
The passage of the Pendleton Act also coincided with the growth of the organized labor movement and the expansion of the federal government, developments that were largely directed at regulating private businesses. The Interstate Commerce Commission was established in 1887 to regulate railroads; the Food and Drug Administration was created in 1906 to ensure the safety of the food supply; the Federal Trade Commission was set up in 1914 to police marketplace competition and break up monopolies; the Federal Reserve was launched in 1913 to regulate monetary policy.
The regulatory expansion went into hyperdrive in the 1930s under President Franklin Roosevelt's New Deal, which saw the creation of many of the financial regulators in place today, including the Federal Deposit Insurance Corp. and the Securities and Exchange Commission.
Ironically, the Supreme Court precedent protecting independent agency members from presidential removal came in response to Roosevelt's firing of a Republican member of the FTC. That ruling,
Unitary executive theory emerged during the Reagan administration as a kind of reaction to the expansion of the federal government and that administration's bristling against bureaucratic pushback against some of its policies. Attorney General Edwin Meese commissioned a
"As currently constituted, the so-called independent agencies owe no duty to the President or his policies," Markham wrote. "As a result, there is potential for conflict between the Executive and the independent agencies."
Trump brought that potential conflict to the fore almost immediately after taking office. The president
Aaron Klein, a senior fellow at the Brookings Institution, said Trump's first 100 days are similar to Roosevelt's in terms of reimagining the size, scope and output of the federal bureaucracy.
"This has been the biggest shake-up of the first 100 days of any president since FDR," Klein said. "The level of change is separable from the direction [of that change], but Trump has created the greatest change of a president in the first 100 days in a century. Doesn't mean the change is good."
Some of those officials have challenged their dismissals in court, teeing up legal battles that are likely to appear before the Supreme Court in the coming months. Margaret Tahyar, a partner at Davis Polk, said the legal status of Trump's assertions of executive power will largely depend on the Supreme Court and to what extent it defers to the precedent set in Humphrey's Executor.
"We're not going to know what the new normal is until we get actual, substantive merits decisions out of the Supreme Court," Tahyar said. "I think part of the plan here is to get as much as possible on the unitary executive theory to the Supreme Court as fast as possible."
But the challenge in putting the unitary executive theory to the test before the Supreme Court is that if the court agrees, it could set a precedent eliminating the independence of the Federal Reserve — or at least its power to set the federal funds rate, which establishes prevailing interest rates across the economy.
The U.S. dollar's status as the global reserve currency of choice is largely a product of not only the size of the U.S. economy but also global investors' confidence in the Fed's ability to raise or lower rates without political interference — a notable distinction from other big economies like China. Trump has also made it widely known
Todd Zywicki, a law professor at George Mason University's Antonin Scalia Law School, said the administration's recent experience with calling out the Fed has underlined the dangers of applying the unitary executive theory to the central bank. But, he said in his opinion, Supreme Court Chief Justice John Roberts will be able to find a way to find the Fed's monetary policy independence constitutional while finding all other independent regulators unconstitutional.
"John Roberts is not a man who is bothered by logical inconsistency," Zywicki said. "I think he'll conjure up some definition that allows us to say that this one agency that does this one thing does not count as an executive authority."
Whittling down the government
In addition to firing independent board members, the Trump administration is taking steps to exert its power over the federal workforce — the very civil servants that the Pendleton Act was designed to protect.
Since inauguration day, Trump has issued dozens of executive orders and taken actions aimed at reducing the federal bureaucracy. A Jan. 20
The administration — aided by the Department of Government Efficiency, a retooled U.S. Digital Service headed by billionaire entrepreneur and White House advisor Elon Musk — also got busy dismissing thousands of probationary employees who had been recently hired or promoted. Some of those employees
The most glaring example of this in the financial services arena is at the Consumer Financial Protection Bureau. In February, Trump said that the bureau — which has been a target for Republicans since its inception — "was set up to destroy people" and referred to it in the past tense as "a very important thing to get rid of, and it was also a waste.
"I mean, number one, it was a bad group of people running it," Trump said
Trump tapped Treasury Secretary Scott Bessent to lead the bureau
Days later, Trump tapped newly confirmed Office of Management and Budget Director Russell Vought as acting director of the CFPB, and Vought
The job cuts at the CFPB were challenged in court, and the outcome of that litigation is likely to be instructive on whether the Trump administration's views about its control over the civil service will withstand judicial scrutiny. But administration
Zywicki said the effort to both bring the administrative state under control via unitary executive assertions and by paring down the federal workforce certainly invites a subsequent Democratic administration to do the same. But he said it is also an important demonstration of lessons that Trump and his advisors learned from his first term, when he took more pains to follow established rules and procedures and was stymied by elements of the bureaucracy itself.
"When Trump and those around them looked back at the first term, they concluded that what undermined them … was the bureaucracy — the deep state, the unaccountable bureaucrats," Zywicki said. "So the top priority they've had in that realm is bringing the administrative state under the control of the president, and recognizing that that would mean that, if there was another Democrat [in the White House], they could also do the same thing. I think the calculation of the Trump administration is that the bureaucracy is already an arm of the Democratic Party, so it's not like there's really any downside to asserting executive control over the agencies, because they're already essentially arms of Democratic presidencies."
Tariffs, economy and uncertainty
The president has also embarked on an aggressive trade policy centered on boosting tariffs on imported goods as a way of cutting the U.S. trade deficit and spurring a broader manufacturing base. The most sweeping round of tariffs were announced April 2 — a day Trump dubbed "liberation day" — raising tariffs on more than 90 countries, including China, Japan and the European Union.
The move
Market volatility since Trump's election has had myriad effects on the global economy. Yields on 10-year Treasury bonds
Tahyar said that after Trump won the 2024 election but before he took office, the banking sector was excited for the return of a president whose economic vision, bankers felt, largely reflected their own: a lighter regulatory touch and an emphasis on growing business opportunities. Trump's inconsistent position on tariffs and other economic matters has tempered the bankers' attitude toward the president, but she said there is still optimism that Trump will avoid the most damaging mistakes before it's too late.
"So now … there's more anxiety, because there's more anxiety around the recession," Tahyar said. "But I think there's still a feeling in the banking sector that there's a moment to recalibrate something that is more efficient and better for the economy than what we've been seeing."
See what sticks
Alexandra Steinberg Barrage, a partner with Troutman Pepper, said that all of these changes — both real and potential — over the last 100 days have created a climate she calls "unpredictable."
"I think as a result of this norm busting, you can't think about problems in the patterned, rigorous, logical way that you might have always done before," Barrage said. "The first answer that comes to mind is my default, logical way of thinking about that problem … but it could go entirely differently."
Conti-Brown said one thing that is distinctive about the first 100 days of Trump's second term — even when compared with his first term — is the extent to which he is seeking to simultaneously expand the executive's power and remove pockets of power that exist elsewhere in government.
"What I'm seeing in Trump 2.0 is that he's surrounded himself not simply with people who are deeply loyal to him as a person …[but] with people who are savvy in the use of unilateral power and willing to ignore any norm that says, 'In America, we live in a system of checks and balances,'" Conti-Brown said. "For Donald Trump, power is not to be shared."
Klein said Trump's emphasis on maximizing his power is evident in the ways he has approached the federal agencies he oversees. In his first term, Republicans urged him to fire CFPB Director Richard Cordray, which Trump resisted until the Supreme Court gave him the authority to do so in its
"That's the very clear example: He didn't fire Cordray," Klein said. "He waited for the court to change the precedent, which they did. Now he's firing everybody. Season two of '
But just because Trump has unleashed a norm-busting vision of executive power on Washington doesn't mean that he will be able to shape the federal government entirely in his image. The judiciary, for example, moves far more slowly than other branches of government and has yet to issue substantive opinions on some of the president's more controversial stances. Presidents also are susceptible to economic and public pressure — and as has been seen with Trump already, they can change their minds.
"Whether you're a bank or you're not a bank, the unpredictability and the impact to your bottom line is a real thing," Barrage said.
Conti-Brown said part of the difficulty in determining what direction the administration will take stems from the presence of both traditional Republican voices and more outside influences within the administration. Musk's presence has injected a "
"My hunch is, when you've got people like Travis Hill and Jonathan Gould and Miki Bowman … those seem to me like people for whom institutional and political gravity are a major factor," Conti-Brown said. "But when you have people like Elon Musk and you have people like [Commerce Secretary] Howard Lutnick and [White House trade advisor] Peter Navarro, Russell Vought — I have no such confidence. Those are people from whom political gravity is kind of a great evil that needs to be extirpated from the system."
Zywicki said the administration's expansive unilateral actions related to paring down the bureaucracy — most notably with respect to the CFPB — will likely serve as a catalyst for Congress to step in and institute the kinds of reforms to the agency structure that have most bothered Republicans since its inception, such as its
"What I think is going to happen is they're going to push as far as they can with the CFPB, but eventually Congress and maybe the administration will use that as a catalyst to reform the CFPB rather than abolish it," Zywicki said. "You can't make it go away without Congress, but maybe they think they can just pare it down enough and make it a shell."
Klein said observers should not expect that Trump's imprint on the federal government will necessarily go away when he exits the public stage. Trump was elected by people who wanted him in charge because they feel — as he does — that a corrupt elite has been taking advantage of ordinary citizens and must be stopped. That force will continue to exist without Trump as its agent, Klein said, and observers should prepare themselves for the reality that the old norms are not coming back.
"There's a strain of wishful thinking among the Washington consensus that Trump is such a unique phenomenon that when he goes his movement will go along with him and will return to an era of Bushes and Clintons, with distinct ideologies but shared tactics and fundamental mutual respect for each other," Klein said. "The reality is that nonvoters were more captured by Donald Trump and [Senator] Bernie Sanders [I-Vt.] — both of whom tried to remake their parties. One won; the other didn't."
