Obama will NOT nominate Elizabeth Warren to be the interim director of the powerful Consumer Financial Protection Bureau (CFPB) tomorrow. What he will do is name her Assistant to the President and Special Advisor to the Secretary of the Treasury on CFPB, administration sources say. Tangled politics, both within the executive branch and between the White House and the Hill, are behind the cumbersome title.
First, Senate Democrats don’t like the idea of a big fight on the floor over Warren’s nomination to be formal director of the agency. Some don’t want the creation of a powerful new agency front and center as they head into an election defined by anti-government fervor. And leadership doesn’t want to devote the time in a very tight schedule. Democrats and Republicans agree that Warren would have sailed out of committee, and perhaps one or two of the remaining moderate Republicans could have been persuaded to come along, Hill Democrats concede.
But overcoming the inevitable GOP opposition to the nomination requires expending political capital. With the heavily laden Defense authorization bill (it has Don’t Ask Don’t Tell, the Dream Act and abolishing Secret Holds already on it), a continuing resolution and a tax cut vote to churn through in a matter of weeks, adding a contentious nomination fight wasn’t in the cards—even if Dems could win in the end, which it’s not clear they could.
So how to get around the problem if you’re the White House and the demoralized left is clamoring for Warren’s appointment to help mobilize the troops for the election? According to the Dodd-Frank bill that creates the CFPB, either you have a Senate-confirmed director or you don’t—there’s no such thing as an “interim” head. And if you don’t, the Treasury Secretary is in charge of setting up the agency.
But the left doesn’t trust Tim Geithner—and its not clear Warren does either. You may have heard that Geithner and Warren don’t get along very well; the administration says they love each other, but even if that were true, they come from opposite ends of the party’s economic ideological spectrum.
So for the purposes of authority, Warren needs to work for Geithner to be the one setting up the agency: hence “Special Advisor to the Secretary of the Treasury on the CFPB.” But for the purposes of satisfying the left, and perhaps the politically savvy Oklahoma-native herself, Warren needs an indication of Geithner-independent swat: hence “Assistant to the President.” An administration official says cagily the title shows the President thinks the job is important.
On paper, the agency is potentially very powerful: funded by “seignorage” from the Federal Reserve, the CFPB is effectively beyond the reach of meddling members of Congress. And it has independent rule writing authority. In DC, says one nervous GOP banking committee staffer, “if you’ve got the money and the rules, you’ve got everything.” Not quite everything–you need a boss who’s willing to back you up. Maybe Geithner will, but if there’s a difference of opinion, Warren will have to appeal to the President.
The administration official says Warren’s expected to hold the job for “months”. Obama made it clear the other day that he thinks Warren is the best woman for the job of launching the agency in the right direction. Whether he means it or is just placating the left may only be revealed in how effectively she is able to leverage the first half of her title.
