CDC Chief Fired in Clash Over Vaccines

Happy Thursday! Controversy continued to swirl at the CDC and the Federal Reserve today. Let's get right to it.

White House Says CDC Chief Has Been Fired

The White House said late Wednesday that Dr. Susan Monarez, the new director of the Centers for Disease Control and Prevention, has been removed from her post.

A White House spokesperson said Monarez is "not aligned with the President's agenda of Making America Healthy Again."

An infectious disease researcher, Monarez had been sworn in less than a month ago following her confirmation by the Senate. The White House said Thursday that Jim O'Neill, a top deputy to Health Secretary Robert F. Kennedy Jr., will serve as acting director.

Clashing over vaccines: Kennedy tried to fire Monarez earlier in the week, but the CDC chief refused to step down, saying Kennedy lacked the authority to remove her.

Kennedy and Monarez had reportedly clashed over vaccine policy. Kennedy is a vaccine skeptic and recently replaced all 17 members of the CDC's vaccine advisory committee with like-minded allies. According to STAT News, Kennedy wanted Monarez to accept all of the committee's recommendations, as well as to fire numerous agency officials, but Monarez refused.

Monarez's lawyers said that she had been targeted for political reasons. "When CDC Director Susan Monarez refused to rubber-stamp unscientific, reckless directives and fire dedicated health experts, she chose protecting the public over serving a political agenda," they said in a statement.

Kennedy told Fox News Thursday that the CDC "is in trouble, needs to be fixed, adding that the agency's leadership "needs to execute Trump's agenda."

Monarez's firing has prompted numerous officials to resign in protest. At least four top CDC officials have announced they are leaving, NBC News reports, including Dr. Debra Houry, the chief medical officer; Dr. Daniel Jernigan, the director of the National Center for Emerging and Zoonotic Infectious Diseases; and Dr. Jen Layden, director of the Office of Public Health Data, Surveillance and Technology.

Fed Governor Cook Sues Trump to Prevent Firing

Federal Reserve Governor Lisa Cook filed a lawsuit Thursday that challenges President Donald Trump's effort to fire her.

Filed in federal court in Washington, D.C., the suit alleges that Trump violated U.S. law and Cook's constitutional rights when he announced her removal from office earlier this week. Trump claims he is firing Cook for cause, based on allegations made by a member of his administration that she provided false information on a pair of mortgage applications in 2021.

"This case challenges President Trump's unprecedented and illegal attempt to remove Governor Cook from her position which, if allowed to occur, would [be] the first of its kind in the Board's history," the lawsuit says.

The suit claims that Trump has no authority to remove Cook, while framing his actions as an illegal attempt to influence Fed policy. "The operational independence of the Federal Reserve is vital to its ability to make sound economic decisions, free from the political pressures of an election cycle," the suit says.

What's at stake: Trump's move to fire Cook threatens to create a crisis of sorts at the central bank, which has operated more or less independently since its creation in 1913. While the seven members of the Fed board are nominated by the president, they serve 14-year terms and are not subject to removal, except for cause. No member has ever been removed by a president.

The Fed board is designed to be shielded from immediate political pressures. But Trump wants the Fed to lower its benchmark interest rate, and his effort to remove Cook is part of his effort - which includes pressuring Fed Chair Jerome Powell with insults and threats of removal - to get the policy he wants. Fed officials have held off on rate cuts this year amid concerns that Trump's tariff hikes could reignite inflationary pressure in the U.S. economy.

If Trump succeeds in removing Cook, it will be seen as a violation of the Fed's historical independence. Some experts have warned that Trump's campaign could lead to higher borrowing costs and higher inflation over the long haul as political leaders push for looser monetary policies in the short term.

The Fed did not comment on Cook's lawsuit. The central bank indicated earlier this week that it would abide by whatever decisions are made by the courts.

Chart of the Day

The tax and policy legislative package Republicans passed in July provided an enormous increase in the budget of U.S. Immigration and Customs Enforcement - enough to transform ICE into the nation's largest law enforcement agency.

A team of journalists at The Financial Times looked at how the surge in spending at ICE is flowing to private airlines that are being used to deport thousands of undocumented immigrants. "The rising demand for ICE Air transport is proving lucrative to private charter airlines such as GlobalX and the budget airline Avelo, which are making millions of dollars from the flights - and sometimes reversing otherwise dire corporate financial straits," the journalists write.

It looks like record spending on deportations will continue to generate windfall profits for a handful of private airlines for the foreseeable future. ICE's current "transportation and removals" budget of $721 million is scheduled to increase to about $4.2 billion a year.

GDP Growth Revised Higher in Q2

The U.S. economy grew at a 3.3% annualized rate in the second quarter, slightly faster than initially estimated, the Commerce Department said Thursday.

The first estimate released in July showed a growth rate of 3.0%. In the second estimate, business investment and consumer spending were higher than initially reported, with the latter growing at a 1.6% pace, up from the initial estimate of 1.4%.

The data shows that the rebound from the negative growth of 0.5% recorded in the first quarter was a bit stronger than first thought. The economy shrank in the first three months of 2025 as U.S. firms rushed to import goods ahead of new tariffs imposed by President Donald Trump; imported goods are subtracted from gross domestic product.

Overall, though, the revision doesn't fundamentally alter the picture of the economy. "Details of revisions do not change the story that underlying demand is slowing outside of a few specific parts of the economy," analysts at Citi said in a note.

Programming note: We'll be back in your inbox after Labor Day. Send your feedback to yrosenberg@thefiscaltimes.com.

Fiscal News Roundup

• CDC Gets New Acting Director as Leadership Turmoil Leaves Agency Reeling – Associated Press
• CDC Director Refused to Fire Leaders, Approve Vaccine Recommendations – Wall Street Journal
• Monarez Would Not Cross 'Red Lines' Before She Was Fired, Confidant Says – Politico
• 5 Big Collisions Between RFK Jr. and CDC Scientists Before Director Was Fired – Washington Post
• Fed Governor Lisa Cook Sues Trump Over Attempted Dismissal – New York Times
• Federal Judge Bars Kari Lake From Ousting Voice of America's Director – CNN
• Tariffs Turn Aluminum Maker Rio Tinto Into a Buyer in US Market – Bloomberg
• Best Buy Reports Modest Sales Recovery, but Says Tariffs Are Complicating Its Turnaround – CNBC
• Donald Trump's Assault on US Nuclear Watchdog Raises Safety Concerns – Financial Times
• Mystery Surrounds $1.2B Army Contract to Build Huge Detention Tent Camp in Texas – ABC News
• DeSantis Unleashes 'Florida DOGE' in Quest to Kill Property Taxes – Bloomberg

Views and Analysis

• Trump Is Weaponizing the Government Against His Enemies. It Doesn't Mean He'll Succeed – Ankush Khardori, Politico
• What's Next if Trump Can Fire Fed Leaders: Higher Costs – Heather Long, Washington Post
• One Way the Fed Can Bolster Its Defenses – Bill Dudley, Bloomberg
• Will the Supreme Court Put Real Limits on This President? Start With Lisa Cook – Kate Shaw, New York Times
• Why Trump Has Reversed Course on IRS Cuts – Jon Miltimore, Washington Examiner
• What's Next, Comrade Trump? – Steven Rattner, New York Times
• Judge the Actually Existing Trump Economy, Not the Theory – David Dayen, American Prospect
• The Booming Business of Trump's Deportation Flights – Peter Andringa et al, Financial Times
• Bondi's Justice Department Is Defunding the Police – Mary Ellen Klas, Bloomberg
• Trump's Tariffs Could Damage a Key Alliance-and Spike Your Drug Costs – Brabim Karki, New Republic
• Vaccine Misinformation Led to an Officer's Murder at the CDC – George Chidi, The Guardian
• The Big Beautiful Bill's Impact on State Taxes, Explained – Jared Walczak, Kyle Hulehan, Dan Carvajal, Tax Foundation (video)