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Obama ignores critics, appoints Warren to set up consumer protection agency

The Harvard professor and chief bailout watchdog will take the helm of the consumer protection agency created by the financial overhaul legislation.

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Washington Post Staff Writers
Friday, September 17, 2010; 8:41 PM

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.

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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 now 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 creating 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. Obama's decision to appoint 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 appointment.

Sen. Lamar Alexander (R-Tenn.) described the appointment as "just another disturbing trend in this administration of creating unaccountable czars and czarinas."


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