The White House isn't afraid to poke a stick in the eye of it's critics. How else do to explain President Obamas decision Friday to put Elizabeth Warren in charge of the new Consumer Financial Protection Bureau while avoiding Senate confirmation and, for that matter any political supervision.
The chutzpah here is something to behold. The pride of Harvard Law School. Ms Warren is a hero to the political left for proposing a new bureaucracy to micromanage the services that banks can offer consumers. A president with more political and constitutional scruple would have nominated someone else. Mr. Obamas choice is to appoint her anyway and dare the Senate to do something about it. Mr. Obama has appointed her an "Assistant" to him and a special advisor to Timothy Geithner. The president emphasized that Ms. Warren will enjoy "direct Access" to him and said she would oversee all aspects of the creation of the new agency, including staffing and policy planning. For all intents and purposes, Ms. Warren will be Treasure Secretary for all consumer lending.
We would have thought a Harvard Law professor would object to the extra-legality of this arrangement but, then, this is also the crew that gave us Obama Care via budget reconciliation and put Donald Berwick in charge of Medicare without a single debate. Remind us again why the Tea Party critique of Obama government is crazy.
The new bureau has independent rule-making authority and can grant itself $646 million. It will draw this money from the operations of the fed, so there won't be any messy intrusions of congressional appropriators
and will therefore receive limited congressional over-site. Ms. Warren's bureau will dictate how credit is allocated throughout the American economy-by banks and financial firms, and also by many small businesses that extend credit to consumers.
In a Blog posting Friday on the White House Web site, Ms. Warren made her intentions clear enough. "President Obama understands the importance of leveling the playing field again for families and creating protections that work not just for the wealthy or connected, but for every American." Given the economic growth and jobless figures, maybe we we should start calling this the "leveling" administration.
Ms. Warren was a vociferous opponent of allowing regulators charged with the maintaining the safety and soundness of banks to control this new bureau. No matter how destructive it's new rules may be they can only be rescinded by a two-thirds vote of the Administration's new Financial Stability Oversight Counsel. And the bureau will now be staffed and shaped by an "assistant" with no obligation to appear before the senate.
The possibility that an appointed official could hold significant authority is why the framers wrote the senate into the process of approving the president's senior hires. Article ll, Section 2 of the Constitution says the president "shall nominate, and by and with the advice and consent of the senate, shall appoint...Officers of the United states." Article ll Section 2 also says "Congress may by law vest the appointment of such inferior Officers as they think proper, in the President alone."
but Congress explicitly did not view the head of the financial consumer bureau as an inferior officer. On July 21, Mr. Obama signed a bill passed by both houses stating that the director shall be appointed by the president , by and with the advice and consent of the Senate.
We have here another end-run around the Constitution niceties so Team Obama can invest huge authority in an unelected official who is unable to withstand a public vetting. So, a bureau inside an agency that it doesn't report to, with a budget not subject to congressional control, now gets a leader not subject to Senate confirmation. If Dick Cheney had tried this, he'd have been accused of staging a coup.
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