Though he did not make her head of the agency she envisioned, President Obama on Friday named Elizabeth WarrenElizabeth WarrenBrazile: DNC staffers got death threats after email hack Sanders and Schumer are right: Ellison for DNC chair Dean: Schumer's endorsement 'kiss of death' for Ellison MORE as a White House adviser to help set up the consumer protection agency as outlined in this summer's Wall Street reform legislation.
Obama, standing in the Rose Garden with Warren and Treasury Secretary Timothy Geithner, said he is proud that Warren is "helping to make her original vision a reality."
"Getting this agency off the ground will be an enormously important task; a task that can't wait," Obama said.
Liberals had clamored for weeks for the president to appoint Warren as director of the new agency, but Obama decided instead to place the Harvard professor in an advisory role, overseeing the creation of the Consumer Financial Protection Bureau (CFPB) and the process that will ultimately decide who runs it.
The move allows Warren and the White House to avoid what likely would have been a tough confirmation fight in the Senate. Sen. Chris Dodd (D-Conn.), chairman of the Senate Banking Committee, repeatedly questioned whether Warren could win the 60 votes necessary to overcome procedural hurdles and win approval for the appointment.
Warren will assume a dual role as assistant to the president and special adviser to Geithner.
A Harvard law professor and the original champion of the consumer office, Warren has served as head of a congressional watchdog panel overseeing the $700 billion financial bailout.
In a blog post Friday, Warren said she "enthusiastically agreed" to oversee the establishment of the bureau, which she is confident will become a "tough cop on the beat."
"I am confident that I will have the tools I need to get the job done," Warren wrote on the White House website. "The new law creates a chance to put a tough cop on the beat and provide real accountability and oversight of the consumer credit market. The time for hiding tricks and traps in the fine print is over."
In opening his remarks Friday, Obama noted the Census Bureau report from Thursday that showed middle-class incomes have dropped almost 5 percent between 2001 and 2009.
Obama said part of the reason for that fall was the unscrupulous practices used by businesses that bled money from consumers.
The new agency, the president said, will be a "watchdog for the American consumer," and that Warren is one of the "fiercest advocates for the middle class" in the country.
Obama also used the occasion to blast Republicans for holding middle-class tax cuts "hostage," repeating his argument that the Bush tax cuts for the middle class should be extended before they expire.
"They need it," Obama said. "They need our help."
— Jordan Fabian contributed reporting.
This story was updated at 2:22 p.m.