By Brady Dennis and Scott Wilson
Washington Post Staff Writers
Saturday, September 18, 2010; A8
In naming Elizabeth Warren to set up a new consumer protection agency on Friday, President Obama swiftly delighted the liberal base of his party after months of disenchantment.
Warren, 61, a Harvard law professor with a long track record of consumer advocacy, will oversee all aspects of the Bureau of Consumer Financial Protection. Technically, Warren will only be an adviser, a role that does not require Senate confirmation - a maneuver that outraged Republicans, who accused Obama of creating a "czar" position without congressional oversight.
But senior administration officials appeared unconcerned about angering an opposition party likely to oppose any nominee. If anything, the White House embraced the chance to strike a populist tone. In naming her to the post during Friday's Rose Garden event, Obama called Warren, a janitor's daughter from Oklahoma, "one of the country's fiercest advocates for the middle class."
"She has seen financial struggles and foreclosures affect her own family," he said. He was joined by Treasury Secretary Timothy F. Geithner and senior adviser Valerie Jarrett, who helped shepherd through the appointment over the concerns of other senior officials.
The rifts within the administration, as described by advisers, reflected a wider split over Warren: A polarizing figure, she is adored by consumer groups and liberal lawmakers who lobbied hard for her appointment, but she is disliked by many banking groups and conservatives on Capitol Hill who expressed fear that she will clamp down unfairly on the financial industry and crimp access to credit.
Warren will oversee every element of the bureau's creation, from recruiting staff to designing key policy initiatives. She also will play a central role in helping to identify a permanent director for the bureau, Obama said.
Her selection as the bureau's chief architect, if not its leader, fits seamlessly into the broader appeal that Obama is making to voters this midterm election season - that only the Democrats are helping the economically beleaguered middle class. It also helps calm critics on Obama's left who have complained that some of the president's senior economic advisers favor the interests of Wall Street and big business over the middle class.
In his daily briefing, White House press secretary Robert Gibbs said Warren's job would be to set up an agency designed "to protect the consumers and middle class of this country." He declined to say whether Warren would be a candidate to run the agency she sets up. Warren has said that she does not want the five-year appointment, and Gibbs said that she would be "instrumental" in choosing the director.
Asked if naming Warren to an interim position was a way of undermining the Senate's "advise and consent" authority, Gibbs said nearly 200 nominations are pending and that, because of partisan bickering, the confirmation process has "virtually ground to a halt."
"Nobody was going to be confirmed anytime soon," he said, adding that Obama did not want a months-long delay in getting to work on the bureau. "There is certainly an advise and consent, a very important provision. It is not advise, delay and consent. It should not be that way."
The highly anticipated appointment has been two months in the making, and its arrival did little to stem the controversy surrounding the critical position. Appointing Warren to a dual role as assistant to the president and special adviser to the Treasury secretary - giving her primary responsibility for shaping the bureau while avoiding a potentially vicious confirmation battle - only stoked the clamor surrounding the choice.
Sen. Lamar Alexander (R-Tenn.) said the appointment was "just another disturbing trend in this administration of creating unaccountable czars and czarinas."
"She represents a view, which is a view represented in the financial regulatory bill, that makes credit harder to get on Main Street, that imposes Washington decisions on local banking issues, and that would put her and the agency in charge of making millions of decisions that ought to be made by the free market or by community banks," Sen. Lamar Alexander (R-Tenn.) said in a statement.
Liberals were equally vociferous in her defense. The politically powerful Service Employees International Union said that Warren "understands the tremendous hardships facing families struggling to recover from the greatest economic crisis in generations. . . Elizabeth Warren was our first and only choice to start the hard work of establishing this historic watchdog for consumers and families."
Senate banking committee Chairman Christopher J. Dodd (D-Conn.), while praising Warren, reiterated his claim Friday that, unless Obama sends a nominee to the Senate soon, "he could leave the entire bureau in jeopardy."
Geithner on Friday notified fellow regulators that the target date for transferring employees and consumer protection duties from other agencies is July 21, 2011, the one-year anniversary of the signing of the financial overhaul bill. That leaves Warren 10 months to get the agency up and running.
She will begin her job immediately and receive a salary of $165,300 per year, officials said, equivalent to the compensation of an undersecretary at the Treasury. She will have a staff and is expected to rapidly expand beyond the several dozen employees working on the creation of the bureau. Warren has a spacious office waiting for her inside the marbled halls of the Treasury Department. It's on the second floor, just below Geithner's office, with a view looking out to the Washington Monument.
The usually outspoken consumer advocate remained silent by Obama's side during the announcement, turning to hug and thank him after his remarks.
But on a White House blog post earlier in the day, Warren hinted that her self-imposed silence will end soon. "I am confident that I will have the tools I need to get the job done," she wrote. "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."
Staff writer Anne E. Kornblut contributed to this report.