Elizabeth Warren will be serving as an interim appointee to set up the Consumer Financial Protection Bureau. Warren will be both a senior presidential adviser with direct access to Obama when she needs it, as well as a Treasury employee. In an administration dominated by those of the same vein as Clinton’s Secretary of Treasury Robert Rubin, Warren will literally be the first financial progressive with both a personal connection to the president as well as an independent power base.
Robert Kuttner, co-founder and co-editor of The American Prospect writes:
“This strategy is a win-win, on several grounds:
“It gives Warren full authority to set up the agency [consumer protection agency], without having to run the gantlet of confirmation hearings and a likely Republican filibuster.
“This way, Warren will be able to get the agency quickly up and running in a manner that serves both consumers and progressive politics. Early directives to bring greater simplicity and transparency to credit documents will be extremely popular. Politically, the carping [about Warren] by the banking industry and its Republican allies will remind the public which side the GOP is on.
“This will take a lot of the wind out of the Republican claim that they opposed the bailout [they were for it] and share popular backlash against Wall Street [they have been in Wall Street’s pockets]. It will belatedly put the administration vividly (and very publicly) on the side of regular Americans when it comes to banking issues.
“As Warren continues to be the remarkably popular champion of struggling families, it will become more difficult [for Republicans] to deny her the job on a permanent basis if she wants it. And it will be more costly, even for a more Republican senate in the next Congress, to make her their nemesis.”
Once the agency is set up, someone will need to be confirmed to run it on a long term basis. Simon Johnson, the MIT professor who is an unabashed Warren fan, writes:
“This step does not avoid a debate in the Senate – it merely postpones it to a more advantageous moment. Presuming that Ms. Warren is nominated as for a five year term as head of the CFPB, she would go before the Senate Banking Committee with a real track record of achievement as interim head. The debate would not be about what the agency could do, but rather what it has already done – and what it is set up to do next. These are exactly the right terms on which to bring out into the open all those who think that the financial sector only ever behaves well – or that enforcing sensible rules on lenders would somehow bring the economy to its knees.”
This is a smart move by the president. He went all the way around the Republicans to put the best person “temporarily” in charge of the new agency. And there is nothing they can do about it.