On Capitol Hill, differing views about plan to bypass approval for Elizabeth Warren
Thursday, September 16, 2010; 9:55 PM
Sen. Christopher J. Dodd (D-Conn.) and Rep. Barney Frank (D-Mass.) worked closely together over the past year to shepherd far-reaching new financial rules through a divided Congress.
But the two veteran lawmakers don't see eye-to-eye when it comes to President Obama's decision to bypass the Senate confirmation process and give Elizabeth Warren an interim role as head of the Bureau of Consumer Financial Protection created by the Dodd-Frank bill.
Obama on Friday plans to appoint Warren to a dual role as assistant to the president and special adviser to Treasury Secretary Timothy F. Geithner, giving her primary responsibility for shaping the new bureau while avoiding a potentially vicious confirmation battle.
"I'm very pleased," Frank said Thursday. "This is a creative way to put her in charge of the agency despite the conservative opposition. It's great."
Dodd, meanwhile, doesn't think it's so great.
"Advisers are advisers. You still have to have a director," he said. "You've got to have someone who has earned the respect and the support of the Senate. The confirmation process is very, very important. They still haven't answered that question, and it has to be answered."
Dodd has said repeatedly that failing to nominate a candidate to undergo the Senate process could jeopardize the new regulator's legitimacy. He said Thursday that, while Warren will make a "good contribution," the White House should nominate a permanent director "sooner, rather than later."
The new bureau is intended to protect borrowers from abuses in mortgages, credit cards and other such loans. It will have dedicated funding and broad authority to write and enforce its own rules. Under the law, the Treasury retains responsibility for setting up the new regulator until the president nominates a director.
The decision to give Warren a temporary administration post - a path the White House has taken before with various "czar" positions - allows her to begin acting as the bureau's director immediately, rather than maintaining the low public profile and hands-off approach expected from Senate nominees. The White House also decided to spare her the fate of far less polarizing and less powerful Obama nominees who have languished for months.
In her new role, Warren won't enjoy the full powers she would have as bureau director. She won't sit on the new Financial Stability Oversight Council, a group in charge of monitoring systemic risks to the economy. Nor will she represent the bureau on the board of the Federal Deposit Insurance Corp. Despite those limitations and despite the fact that she will answer to Geithner, chances are she will have plenty of autonomy.
"Anybody who thinks that she's going to be taking orders from Tim Geithner is nuts," Frank said. "Tim isn't planning to give her orders, and she's not planning to take them."
Frank and Dodd are far from the only ones with divergent opinions on Warren's appointment. Numerous Senate Republicans, banking lobbyists and business representatives, groups that likely would have opposed Warren or relished having her on the sidelines while awaiting confirmation, criticized the decision as circumventing one of the few checks on the new bureau.
By contrast, a bevy of liberal lawmakers and consumer advocates praised the decision as the best way to allow Warren, a Harvard law professor and bankruptcy expert, to shape the consumer watchdog that she envisioned years ago.
Dodd on Thursday held out hope, however unlikely, that the White House would soon choose a nominee to face the Senate process.
"I thought they might actually send her up here as a nominee. They didn't," he said. "They still have to send up a nominee that has to go through the Senate. I really believe it's important, that process."
Frank simply smiled at that notion.
"Maybe Chris felt other senators expected him to defend Senate prerogatives. I've had a lot of burdens in life, but having to defend Senate prerogatives is one from which I am gloriously free," he said. "I had one view, and he had another. Is there a rule that we're never supposed to disagree?"