President Obama picks Elizabeth Warren ... and thumbs his nose at the Senate
WE HAVE QUALMS about Elizabeth Warren, the Harvard law professor President Obama has put in charge of setting up the Bureau of Consumer Financial Protection. The new body, which will have a half-billion-dollar budget and wide regulatory power over mortgages, credit cards and the like, was her brainchild. It emerged from Warren's zealous campaign against what she called the "tricks and traps" of the banking industry, which has made her a hero to the progressive wing of the Democratic Party. Like many such activists, however, Ms. Warren can be simplistic and hyperbolic.
Certainly, her dim view of the banking industry is fully reciprocated -- and, egged on by Wall Street, Republicans probably would have filibustered her nomination to be the bureau's first director. That, in our view, would have been unjustified. Ideologically contentious as she may be, Ms. Warren is qualified for the job. In an ideal world, as opposed to the polarized Washington in which we actually live, she would have received at least a prompt hearing and a floor vote.
Still, Republicans would have been within their rights. Can the same be said for Mr. Obama's end run of the Senate confirmation process? Senate confirmation of the bureau's director was one of the few checks Congress built into an office that otherwise will be very powerful and independent. Nevertheless, the statute establishing the bureau gives Treasury Secretary Timothy F. Geithner interim authority in the absence of a permanent director, at least until July 21 -- when the bureau officially absorbs and consolidates various federal agencies' consumer-protection functions. And, under the arrangement the president outlined, Ms. Warren will work for Mr. Geithner. Of course, she'll also be on the White House staff, reporting to the president -- as Mr. Geithner does. That gives her a free hand, indeed, and as Mr. Obama said Friday, she'll be advising on everything from policy to personnel to a nominee for director, which might yet be Elizabeth Warren. Only actual rule-making will have to wait, for now.
Mr. Obama would have been better off picking a more confirmable candidate, as some senators from his own party had urged. Even a recess appointment for Ms. Warren -- which would have lasted through 2011 -- would have been preferable in terms of sticking to constitutionally prescribed processes for filling federal offices. But either move would have infuriated progressives, who still dream of a full five-year term for Ms. Warren -- and whose support Mr. Obama needs in November. For all intents and purposes, the president has created, and filled, a de facto directorship. This might have been in keeping with the letter of the laws, but not with their spirit.