Sen. Elizabeth Warren (D-Mass.), shown speaking at the AFL-CIO National Summit on Jan. 7, has shown that she and her brand of populism are forces to be reckoned with — not only by Obama and his team, but also by the Democrats’ likely 2016 presidential nominee, Hillary Clinton. (Jose Luis Magana/AP)
Sen. Elizabeth Warren has an explanation for the singular nature of her power.
“I’ll always be an outsider. That’s how I understand the world,” the Massachusetts Democrat said in an interview. “There’s a real benefit to being clear about this. I know why I’m here. I think about this every morning before I open my eyes, and I’m still thinking about it every night when I go to sleep.”
Being the target of that kind of focus can be an excruciating experience — the freshest case in point being investment banker Antonio Weiss, whom President Obama put forward last year as his nominee for Treasury undersecretary for domestic finance.
Initially seen as a highly credentialed and noncontroversial pick for a low-profile post, Weiss found himself up against a storm of opposition, led by Warren, who said he was yet another example of Wall Street cronyism within the Obama administration.
On Monday, Weiss wrote a letter to the president asking that his name be taken out of consideration.
The tussle sent yet another signal, maybe the clearest yet, of how Warren intends to wield her growing clout. It showed that she and her brand of populism are forces to be reckoned with — not only by Obama and his team, but also by the Democrats’ likely 2016 presidential nominee Hillary Rodham Clinton.
“It’s not about Antonio Weiss personally,” said Simon Johnson, an outspoken Massachusetts Institute of Technology professor and former International Monetary Fund chief economist who admires Warren and shares her views. “What it’s really about is the presidential election.”
No small amount of speculation has centered on whether Warren herself will run for the White House in 2016. She insists that she will not. But her advisers and longtime allies say that she intends to keep the pressure on Clinton, to make sure the former secretary of state pays more than lip service to the issues that matter to Warren.
She is training her heat vision not on the Oval Office, but two doors down the hall on the Cabinet Room. Warren wants to make sure that Wall Street-aligned figures who have shaped the Clinton and Obama brand of economic policy for the past quarter-century, going back to former Treasury Secretary Robert Rubin, are not the only ones at the oval mahogany table.
“The worst case for us is that [Clinton] gives a feisty speech now and then, but surrounds herself with the same old” economic gurus, said one longtime Warren ally, insisting upon anonymity to speak frankly.
A powerhouse fundraiser who taps the passions of the liberal base, Warren also believes she can loosen the political grip of the financial industry, which pours more money into elections than any other industry, most of it in recent years to Democrats.
“She’s a disruptive force, because she stands outside the basic transactional proposition that has dominated Washington for a generation,” said AFL-CIO policy chief Damon Silvers, who was Warren’s deputy on the congressional oversight panel that monitored the government’s $700-billion Wall Street bailout known as the Troubled Assets Relief Program.
In other words, there is an argument to be made that Warren could get more of what she wants by holding herself outside the 2016 fray than by jumping in.
In a speech this month before the union federation, Warren took several not-so-subtle jabs at both Hillary Clinton and former president Bill Clinton, whose economic record of growth and balanced budgets are expected to be one of his wife’s major selling points. The Massachusetts senator suggested that the policies, many of which began in the 1980s, are nothing to brag or be nostalgic about.
“Pretty much the whole Republican Party — and, if we’re going to be honest, too many Democrats — talked about the evils of ‘big government’ and called for deregulation,” Warren said. “It sounded good, but what it was really about was tying the hands of regulators and turning loose big banks and giant international corporations to do whatever they wanted to do.’’
Warren also singled out a company on whose board Hillary Clinton sat for six years when she was first lady of Arkansas: “If you work at Wal-Mart, and you are paid so little that you still need food stamps to put groceries on the table, what does more money in stockholders’ pockets and an uptick in GDP do for you?”
A Clinton spokesman did not respond to requests for comment.
Warren’s appeal lies in her ability to frame complex financial issues, strip them of their jargon and connect them to the workaday struggles of average Americans who are not feeling the benefits of an improving economy.
“She represents a focus on economics that is not unique. She does have a unique ability to explain things extraordinarily well,” said Democratic pollster Mark Mellman.
Warren also brings an expertise honed over decades as a well-regarded academic who did groundbreaking research into bankruptcy and other factors that have made the middle class more fragile.
It is hard to think of a precedent for the role she has carved out in the Senate. “I think she’s brought some extraordinary credentials to this job in the public policy area. The only analogy I can think of is a former first lady,” said Sen. Richard J. Durbin (Ill.), the Senate’s second-ranking Democrat.
Durbin paused a moment, and added: “That’s an interesting analogy, on a lot of levels.”
Warren’s critics, however, say she often steps over the line between simplifying things and being simplistic.
Former treasury secretary Timothy F. Geithner tangled with Warren in her pre-Senate days, when she was a Harvard Law School professor heading the TARP oversight board.
The hearings that Warren conducted “often felt more like made-for-YouTube inquisitions than serious inquiries,” Geithner wrote in “Stress Test,” his 2014 memoir. “She was worried about the right things, but she was better at impugning our choices — as well as our integrity and our competence — than identifying any feasible alternatives.”
Weiss’s defenders saw the same traits at work in her opposition to his nomination. It was not a total victory for Warren, given that Weiss will instead be given the title of “counselor” to Treasury Secretary Jack Lew, a position that does not require Senate confirmation.
The Washington Post editorial page called Warren and her allies’ case against Weiss “a grab-bag of symbolism and epithets, not a rationale.” New York Times columnist Andrew Ross Sorkin called her outrage “misdirected,” “misinformed,” and “just another campaign talking point.”
Warren turned Obama’s pick into “a pawn in a struggle for the heart of the Democratic Party,” former investment banker Steven Rattner, who was lead adviser in the Obama administration’s automobile industry rescue, said in an interview shortly before Weiss’s withdrawal.
But more than a few Democrats believe Warren is lighting the path forward for their party. At Sen. Harry M. Reid’s (D-Nev.) first senior staff meeting after the 2014 midterm elections that cost their party control of the Senate, the soon-to-be-minority leader passed around copies of an op-ed by Warren that had run a few days earlier in The Post.
“For all the talk of change in Washington and in states where one party is taking over from another, one thing has not changed: The stock market and gross domestic product keep going up, while families are getting squeezed hard by an economy that isn’t working for them,” Warren wrote.
Two days after that meeting, Reid appointed Warren to a spot in the Senate leadership he created just for her. But if that created any impression that she had somehow been brought into the tent, Warren dispelled it during the lame-duck congressional session. She waged a full-throated campaign that nearly killed a spending bill, negotiated by Reid, that included a provision that would weaken restrictions on risky trades by big banks.
Warren raises money on a level that few people who are not named Clinton or Obama can match. More than 350,000 donors gave a stunning $42 million to her 2012 Senate race, half of them in amounts of $25 or less.
She was one of the most sought-after Democrats in last year’s election season, raising more than $6 million for the party and its candidates, and campaigning in 16 states that included such bastions of conservatism as West Virginia and Kentucky. And Warren has already weighed in for California Attorney General Kamala Harris to replace retiring Sen. Barbara Boxer in 2016.
Warren can maintain her intensity in part because her scope is relatively narrow — focusing on financial regulation and issues such as Social Security and student loans that have a direct effect on middle-class family budgets. While she hews to her party’s line on most questions, she leaves it to others to take the lead on fights over abortion or foreign policy or climate change.
And though she is the darling of the liberals — with the organizations MoveOn.org and Democracy for America counting 244,000 signatures in their online petition drive to draft her to run for president — many of Warren’s stances do not easily lend themselves to partisan and ideological labels.
In her December battle against the loosening of restrictions on derivatives trading, for instance, she found herself on the same side as Sen. David Vitter (R-La.) and David Stockman, who was Ronald Reagan’s budget director.
“I just hate this typecasting of her as this sort of far-left Massachusetts liberal. She was basically making a conservative, market-oriented argument,” former Federal Deposit Insurance Corporation chairwoman Sheila Bair said. Bair, a Republican, added that Warren is “the only Democrat I ever supported or campaigned for in a general election.”
Sen. Joe Manchin III (W.Va.), widely regarded as the Senate’s most conservative Democrat, sat next to Warren for two years on the Senate Banking Committee and said: “There’s a lot of things we have in common about the fairness and equity of the system.” He, too, opposed the rollback of the derivatives trading restriction and Weiss’s nomination.
Warren’s main legislative cause these days is holding the line against efforts to weaken the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, which established a new federal agency, the Consumer Protection Financial Bureau, that she proposed and championed.
With Democrats now in the minority in Congress, there is not much she can do to stop what former representative Barney Frank (D-Mass.), an author of the law, described as the “somewhat unexpected ferocity of the Republican attack on the reform bill.” But Warren can make it far more difficult for members of her own party to go along.
“You ask me what I learned since I’ve been here?” she said. “One of the biggest things I’ve learned is that to be effective, you have to attack a problem from every angle. That can be through introducing legislation, bringing up an issue at a hearing, writing letters, every possible way to push on the issues that you care about. To draw people’s attention to them. To say, ‘This matters.’
“There are many different ways to get things done in Washington,” she added.
Warren sounded like someone who is not running for president — but who is determined to leave her mark on anyone who is.