Presidents Should Want Limits on Their Power

by Girls Rock Investing

Republicans are probably wishing right now that President Trump hadn’t had his way so thoroughly on tariffs and the Iran War. Even the president himself, were he prone to reflection, might have a similar thought. Republicans face daunting odds in the midterms, as Trump’s tariffs and Iran attacks weigh on his approval. What Trump and most congressional Republicans failed to realize is that executives benefit from limiting their own power.

Presidents benefit from checks and balances in three ways. 

First, they can receive feedback and deliberation on their policy proposals. Deliberation makes policies politically stronger. When Congress legislates, it gives a range of powerful interests a little of what they each want, making the final legislative product less pure but also less politically poisonous.

Second, separation of powers lets presidents spread responsibility. Sharing responsibility also means sharing blame when policies fail. In pushing the limits of executive power, Trump has heaped the credit and blame for his policies upon himself.

Third, executive constraints promote a good investment climate. When policy can swing wildly based on the whims of a single man, investors get anxious. Higher cost of capital means slower economic growth. Research suggests executive constraints reduce volatility and help long-term growth. As political scientists Gary Cox and Barry Weingast put it, “[I]n terms of… promoting steadier economic growth, the health of legislatures is more important than the health of elections.”

At present, Congress is far from healthy. It has surrendered power to the president, who faces few checks on his agenda within the federal government. The judicial branch has checked some of his policy ambitions, but it can act only in response to legal violations brought before it.

Trump’s expansion of executive power is especially apparent in his tariff policies and the Iran War. While presidents have generally enjoyed broader powers in foreign than domestic policy, Trump’s attempts to set sweeping, global tariffs unilaterally and to wage war without congressional authorization strain against legal limits — and now threaten his political legacy.

The “Liberation Day” tariffs, announced on April 2, 2025, caused the biggest stock market drop since March 2020 and saw the president’s approval slide accelerate. The Supreme Court eventually ruled the order illegal under the International Emergency Economic Powers Act. The administration has since reimposed tariffs under other statutes, sparking new legal challenges. The tariffs remain unpopular.

Core Republican constituencies, like Midwestern farmers, are disappointed in the administration’s trade policies. Imagine how much better shape Congressional Republicans would be in, had they put tariffs through the normal legislative process, allowing the normal opportunities to exempt goods that are crucial to their own constituencies. The process would have taken longer, and Trump might not have gotten everything he wanted, but the final tariff schedule would have been more durable, more popular, less harmful to the economy, and indisputably lawful.

The same logic holds for the Iran War. Trump continued Barack Obama’s Libyan precedent of flouting the War Powers Resolution, bypassing Congress. The Libya campaign was followed by a decade of anarchy and civil war; the current Iran conflict has handed that regime powerful economic leverage over the Strait of Hormuz and continues to roil global oil markets.

Both presidents could have benefited from going to Congress for authorization. Congress might have shut down the Libya intervention, since a resolution to authorize it failed in the House. But the House also failed to defund the Libya intervention, so had Obama forced a “put up or shut up” vote, Congress might have gone along, spreading the blame for the intervention’s ultimate failure.

Going to Congress for authorization to attack Iran could likewise have prevented Trump from committing what looks like a major foreign policy blunder, or at least have helped diffuse responsibility for that blunder to others. Congressional Republicans haven’t escaped blame, because they haven’t even tried to constrain the president. But had the president succeeded in gaining congressional authorization, he would have had to bring along some Democratic votes, giving the policy a bipartisan veneer.

Beyond these policy specifics, a more constrained Trump would have created a more predictable environment for investors, and allows for economic growth. Excluding pandemic months, the U.S. Economic Policy Uncertainty index has averaged more than twice as high under Trump II as under Biden or Trump I. Research finds that this uncertainty predicts lower investment, greater economic volatility, and, at times, slower growth.

Trump’s unilateralism has made his policies less popular and less effective, concentrated blame on himself, and dramatically increased policy uncertainty, damaging investment and growth and thus voters’ views of Republican competence. Democrats are preparing legal measures to restore congressional primacy and constrain future presidents. Congressional Republicans should join them, so that no future president of any party can impose these costs on Americans again. James Madison would approve.

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