Among their demands: the creation of a five-member board of directors to run the CFPB instead, the addition of tougher oversight of the agency by current banking regulators, and an appropriations process for determining its budget, rather than confirmation of the Federal Reserve’s. It’s hard to argue the changes would do anything but weaken the new agency before it ever really got off the ground.
That leaves President Obama in a pickle. On Wednesday, Warren’s supporters signed a petition urging the president to make a recess appointment, naming her to lead the agency while the Senate is not in session. Doing so, however, would only allow her to stay in the position until next year, and would have Republicans up in arms that the president is pushing through his wishes and doing exactly what Democrats lambasted his predecessor for doing. The whole thing could be complicated by the fact that there are apparently some efforts to convince Warren to run for Senate in Massachusetts.
The brouhaha raises a couple of important leadership questions. For one, would a five-member board of directors be a better governing structure than a single leader? And is it appropriate for the president to make a recess appointment in this case?
On the first question, my best guess is: not likely. Leadership-by-committee is a sound approach for long-standing organizations that have an established history, provided they have some kind of chairman leading the way. And yes, such committees tend to yield fewer politically polarizing choices, but the process is sure to be slower moving. For an agency just out of the gate, a single leader that has real ownership of the group’s mission is better equipped to make the kind of quick decisions that will be critical to getting the organization off the ground. A new agency is like a startup, and requires nimble leadership.
On the second, I’d say a recess appointment is appropriate. Senate Republicans have put a stake in the ground saying they won’t consider a confirmation unless the structural changes they’re asking for are made. Rather than allowing the vote and voting her down (which might not be possible given the Democrats’ majority), they’re obscuring the process. As Katrina vanden Heuvel points out, this gives Obama a more credible option—if he indeed feels that Warren is the best person for the job—to nominate her without the Senate’s approval.
It’s a tricky question for the president that will surely have some consequences, and recess appointments should no doubt be used sparingly. But even though the downside may be that Warren is only in the role temporarily, or that Obama is seen as stuffing his picks into roles without Senate approval, it means the agency is able to fulfill its mission from day one and not lose out on valuable time to protect consumers. Ultimately, one of the president’s jobs as a chief executive is to help ensure continuity, facilitate smooth transitions in leadership and give a new organization its best foot forward as it launches.
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