The real battle within the U.S.
With all the chaos unfolding, unwinding and unfolding again in the Middle East, it’s easy to forget the bigger battle – the one for democracy in the U.S. – is still being waged. Back in early April, during the chaos of the tariff war-induced market turmoil, Donald Trump issued an executive order headed: “Maintaining Acceptable Water Pressure in Showerheads.”
There were many who thought this was a joke until Bloomberg’s Noah Feldman identified it as another power grab in the battle to implement an autocracy.
As Feldman pointed out, that power grab had nothing to do with showers. Instead, it is an attempt to gut the U.S. Administrative Procedure Act (APA) of 1946, which is currently being used by federal courts to block Trump’s unlawful actions.
Disguised as a trivial order about low-flow showerheads, it is, in reality, an invitation to the Supreme Court to gut the APA. And it’s an invitation that would be a disaster for the rule of law in the U.S.
The Administrative Procedure Act (APA) functions, as it has for nearly eight years, as a foundation and cornerstone of U.S. governance, legal accountability, transparency and public participation. Irrespective of presidential administrations, the Act shapes how federal agencies proclaim, circulate, revise, and revoke regulations.
The Administrative Procedure Act (APA) governs how federal agencies in the United States propose, adopt, and repeal regulations through a process known as “notice and comment” rulemaking. Agencies must first publish a “notice of proposed rulemaking” in the Federal Register, allowing public comments, typically for 30 to 60 days. Afterward, they issue a “final rule” with a preamble addressing public feedback and justifying the agency’s decision.
This process is a cornerstone of federal rulemaking, balancing agency authority with democratic principles. While the process promotes fairness and inclusivity, it can be time-consuming and resource-intensive, sometimes delaying urgent regulations. But while some argue the APA’s requirements hinder effective governance, they are legally binding, enhancing decision quality, ensure transparency, and enable community input.
Repealing or rescinding a regulation requires a new notice and comment process, as the act of rescission is considered a regulation under the APA. The same rigorous reasoning required to establish a regulation must be applied to justify its repeal.
A cold shower
Trump’s order directs the Secretary of Energy to reverse a Biden-era regulation defining “showerhead” – a rule that was established by the Department of Energy pursuant to the APA’s so-called notice-and-comment process. Trump’s executive order commands an immediate repeal to take effect in 30 days without any process, input or reasons.
In the context of the established process, Trump’s order is a flat-out violation of the APA, with Trump overtly violating the law and contradicting the very reason the APA exists by stating, “Notice and comment is unnecessary because I am ordering the repeal.”.
It’s worth repeating, Trump’s idea that “because I said so” is sufficient contradicts the very reason that the APA exists.
The APA exists to ensure the administrative state, operating under the protection, backing, and support of the executive, doesn’t unilaterally invent decisions along the way but operates according to expertise and public input.
It appears U.S. President Trump and his representatives view the APA as a hindrance to their agenda, one of which is deregulation itself. And let’s not forget that DOGE (Department Of Government Efficiency) has gutted federal agencies of their staff, so administration officials will find it difficult to assemble the resources required to review public comments and draft Federal Register publications.
Since the beginning of Trump’s second term, the courts have repeatedly used the APA’s power to block the president’s actions that are illegal.
According to legal experts, the Supreme Court can only uphold the assertion in the showerhead order if it agreed that a simple presidential ‘command’ such as, “because I said so”, allows circumvention of the APA. And if that’s true, then courts might be unable to block executive orders under the law.
Experts also suggest that if the Supreme Court lets Trump get away with this, another judicial guardrail against a Trump autocracy will dissolve.
Indeed, the Trump administration has already made other efforts to sidestep the Administrative Procedure Act’s (APA) notice-and-comment requirements through several strategies. The administration has attempted to broadly interpret the APA’s narrow exceptions, which allow bypassing notice-and-comment in specific circumstances, such as for interpretive rules or emergencies, and it has used non-standard mechanisms to repeal or nullify existing regulations, avoiding the standard rulemaking process.
Importantly, the courts have yet to fully review these actions, but their inconsistency with APA principles suggests they are likely unlawful and will hopefully be overturned.
Regardless, these attempts signal a broader trend of undermining the APA’s procedural safeguards. And let’s not forget Trump stacked the Supreme Court in his first term.
The APA’s notice-and-comment process ensures transparency, public input, and accountability in federal rulemaking. Efforts to bypass it risk weakening these democratic protections and should be closely scrutinised.
Elsewhere in the United States
In April, before President Trump authorised domestic military deployment in Los Angeles, the U.S. Senate confirmed Retired Air Force Lieutenant General John “Razin” Caine as chairman of the Joint Chiefs of Staff, arguably completing the politicisation of the military.
It is claimed Caine lacked experience in any of the seven legally required roles for the position, but the president can waive this requirement “in the national interest,” which Trump did to appoint a loyalist as the highest-ranking officer in the U.S. armed forces.
On 7 June, Trump issued a memorandum federalising 2,000 California National Guard troops to suppress immigration protests in and around Los Angeles, invoking an obscure provision in federal law unused since 1970, when President Nixon federalised the Guard during a postal strike.
The Insurrection Act permits the president to deploy active-duty military or federalised National Guard to enforce federal law or quell rebellions when “unlawful obstructions, combinations, assemblages, or rebellion” render it “impracticable” to enforce federal law through normal judicial processes.
If that sounds a little Tiananmen Square-like, it may be.
Trump’s 20 January executive order, Declaring a National Emergency at the Southern Border of the United States, directed the Secretaries of Defense and Homeland Security to assess “additional actions necessary to achieve complete operational control of the southern border,” explicitly mentioning the potential invocation of the Insurrection Act of 1807.
Here’s a reminder of some of the things Trump has said and which many are now worried should be taken literally:
“We pledge to you that we will root out the Communists, Marxists, fascists, and the radical-left thugs that live like vermin within the confines of our country, that lie and steal and cheat on elections … The threat from outside forces is far less sinister, dangerous, and grave than the threat from within. Our threat is from within.”
“I am your warrior. I am your justice. And for those who have been wronged and betrayed, I am your retribution.”
“I am the only one who can save this nation.”
Finally, keep in mind it was a Trump’s self-declared “emergency” that permitted the upending of the global trading system and associated stability. All he had to claim was the existence of trade deficits, which his executive order says indicated “a lack of reciprocity in our bilateral trade relationships, disparate tariff rates and non-tariff barriers, and US trading partners’ economic policies that suppress domestic wages and consumption”.
One wonders what other so-called ‘emergencies’ might be concocted next?
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
He is also author of best-selling investment guide-book for the stock market, Value.able – how to value the best stocks and buy them for less than they are worth.
Roger appears regularly on television and radio, and in the press, including ABC radio and TV, The Australian and Ausbiz. View upcoming media appearances.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
