A promise by Senate Republicans to block anyone President Obama nominates to lead the Consumer Financial Protection Bureau has increased the likelihood that Elizabeth Warren will get the job.
The president has little choice but to use his recess powers given the position of Senate Republicans, said Rep. Barney Frank (D-Mass.), one of the Wall Street reform bill’s chief architects.
There’s a good chance that will be Warren, the person many Republicans least want to see get the job.
The CFPB is supposed to start work on July 21, and advocates for the bureau are already calling for Warren to be nominated.
The White House demurred from nominating Warren, the chief advocate for the bureau, to the spot earlier in the year, and instead made her a special adviser to the president.
But given the GOP's promise to block any nominee unless the agency's “unfettered authority” is brought under control, some say the White House now has nothing to lose by recess appointing Warren if it wants someone in charge of the bureau for its start date.
“He should jump-start the debate ... by nominating Warren immediately and touting her and the CFPB loudly,” said David Arkush, a director with Public Citizen, a consumer group. “If Republicans continue to block her nomination, then the president should appoint her during the next Senate recess, the week of Memorial Day.”
Republicans are well aware that a recess appointment is possible. They coupled their promise to block nominees with warnings for the president about skirting the confirmation process.
“Senate confirmation is about accountability and giving the American people a voice in the process,” said Sen. Richard Shelby (R-Ala.), the ranking member of the Banking Committee who helmed the effort. “I would hope the President won’t silence the people’s voice."
“We’ve all heard rumors and seen indications for a long time that the president would work around the Senate and make a recess appointment to this agency and have strongly urged him not to circumvent the process in this way,” added Sen. Bob Corker (R-Tenn.).
But CFPB proponents argue that the blame for a recess appointment would fall on Republicans for their broad blockade, not on the White House.
“They absolutely have no basis for complaint,” said Frank. “You can't refuse to let the confirmation process work and then complain when it's bypassed.”
“It's going to be very hard for [Republicans] to turn around and complain if the president uses virtually the only option that's left to him in order to get this agency up and running in an effective way, which is to do a recess nomination,” said Travis Plunkett, legislative director for the Consumer Federation of America.
The filibuster-proof bloc of Senate Republicans are vowing to block any nominee to head the CFPB until several changes are made. They want a board of directors at the top instead of a single director, and are demanding that the CFPB budget be submitted to Congressional appropriators. They also want to make it easier for other regulators to overrule CFPB rules.
While some groups believe the road for Warren to become CFPB director is now clear, others warn that there are some pitfalls that come with recess appointments, which could be exacerbated since this pick will kick off a brand new agency.
“Going with an acting director or a recess appointed director, you don't really have the nice, clear firm start that everybody was hoping would happen,” said Wayne Abernathy, executive vice president of the American Bankers Association, which lobbied against the CFPB when it was being considered. “That's less than optimal.”
He added that if a person is recess appointed to head the CFPB, he or she will probably only get a year and a half in the position, as opposed to the five-year tenure dictated by the law. That is because a recess appointment would expire at the conclusion of the 112th Congress at the end of 2012.
While the administration could re-nominate that person at the beginning of the next Congress, it is “very rare” for the Senate to confirm someone who has already been recess appointed.
“It sours the Senate,” he said. “People on both sides of the aisle feel like they've been avoided or evaded.”