President Obama’s choice for a senior post at the Treasury Department, investment banker Antonio Weiss, has dropped out of consideration after a storm of criticism from liberal Democrats led by Sen. Elizabeth Warren.
Weiss wrote a letter to Obama asking the administration not to renominate him for the position of undersecretary for domestic finance, choosing instead to serve as a counselor to Treasury Secretary Jack Lew on international and domestic matters. In that position, he would not be subject to confirmation but would play a different, lower-profile role.
The withdrawal of Weiss from consideration hands a major victory to Warren (D-Mass.) and others in the Democratic Party who questioned Weiss’s qualifications, alleging that his Wall Street ties made him a poor choice for effective regulation of financial institutions and reform of tax issues such as companies launching mergers to lower their tax bills.
“We’ve already seen that the new Republican Congress is going to aggressively attack the Dodd-Frank Act,” Warren said in a statement Monday. “It is critical that the Treasury Department defend the Act from those attacks and push for strong implementation and enforcement of the law. The risk of another financial crisis remains too high, and we should be strengthening financial reforms, not rolling them back to benefit Wall Street.”
The Obama administration, which had nominated Weiss in mid-November and would have needed to renominate him for the new Congress, had defended Weiss, asserting that his experience as head of investment banking at Lazard made him a strong choice for the Treasury post.
The administration said that Weiss’s views on regulation were in line with Warren’s, that he opposed tax breaks for U.S. companies moving their headquarters abroad and that he had not worked for a bank in the “too big to fail” category.
But Warren said that Weiss represented the latest in a long line of Wall Street bankers to dominate Treasury and that it was time to stop. “Enough is enough with Wall Street insiders getting key position after key position and the kind of cronyism we have seen in the executive branch,” she said in a Dec. 12 speech about Citigroup.
“We strongly believe that the opposition to his nomination was not justified,” said the White House in a statement.
Friends of Weiss, who was a major fundraiser for Obama, said he never anticipated such a storm. “He had no idea that Elizabeth would come out swinging,” said one person who has worked with Weiss.
Steven Rattner, a former Lazard banker who aided the Obama administration with the automobile industry rescue, said in an interview that Weiss had “become a pawn in a struggle for the heart of the Democratic Party.” He said “poor Antonio” was a “great guy caught in the crossfire” after laying bare his personal finances in the hope of getting “a modest sub-Cabinet job.”
Rattner said that he had “a lot of respect” for Warren and “her deep commitment to her issues,” but he warned that “this kind of intraparty fratricide is a dangerous thing.”
A person close to Warren said last week, before Weiss withdrew, “This is not just a political play. This is something we really care about.” But he also asserted that if Weiss withdrew, it “shows we have the power to bring someone down. Elizabeth is a bigger bogeyman in these rooms.”
This person, who spoke on the condition of anonymity so he could speak freely, added that the withdrawal of Weiss would demonstrate the administration has limited appetite for confronting the party’s liberal wing. “I think there’s a finite amount they’re willing to bleed,” he said. “Every time we attack them, they bleed.”
Leading Democrats and supporters of Weiss also said the Obama administration had not made any effort to muster support among members of the Senate.
One former administration official with good relations with members of the Senate Finance Committee said he offered to rally support for Weiss but that Weiss said the White House had said to hold off.
“I have questions about him too,” Sen. Richard J. Durbin (Ill.), the Democratic whip, said in an interview last week. He said he got a call from the White House about six or eight weeks ago, asking whether he would meet with Weiss. He said yes, and then heard — nothing.
“I don’t understand why we haven’t heard any more,” he said last week.
Top Republicans, whose support would have been needed, also said last week that they had heard nothing from the administration. Julia Lawless, a spokesperson for Senate Finance Committee Chairman Orrin Hatch (R-Utah), said last week that the committee never received Weiss’s paperwork last year but that Hatch “looks forward to thoroughly examining Mr. Weiss’s record and gaining a better understanding of his fiscal views.”
That will no longer be necessary.
“I do not believe that the Treasury Department would be well served by the lengthy confirmation process my renomination would likely entail,” Weiss said in a letter to the president over the weekend, adding that as counselor he would be able to “begin serving immediately.”
Karen Tumulty contributed to this report.