Dilemma for the White House: What to do about Elizabeth Warren?

May 27, 2011 1:33pm

ABC News’ Matthew Jaffe (@JaffeMatt) reports:

President Obama faces a dilemma: what to do about Elizabeth Warren?

He could appoint her to run the Consumer Financial Protection Bureau – after all, she was the one who first proposed it in the summer of 2007, calling for the creation of “a new regulatory body to protect consumers who use credit cards, home mortgages, car loans, and a host of other products.”

Her appointment to run the bureau would be welcome news to a slew of prominent lawmakers, progressives, and labor unions who have urged her nomination. But it would infuriate Republicans, who have targeted Warren – and the watchdog agency – in recent months.

Or President Obama could name someone else to lead the bureau and try to convince Warren to run against Republican Sen. Scott Brown in the race for the Massachusetts Senate seat in 2012. With the Republicans needing to pick up only four Senate seats to wrest control of the upper chamber of Congress from Democrats, it would be a huge boost for Democrats to win back Ted Kennedy’s old seat – especially when you factor in that Democrats have a whopping 23 Senate seats up in 2012, compared to only 10 for Republicans.

Warren has been working for the Obama administration in forming the fledgling bureau. But this week the buzz about Warren reached a fever pitch on Capitol Hill, from a contentious hearing to an obscure procedural move by the Senate.

On Tuesday House Republicans grilled Warren at a hearing, with Rep. Patrick McHenry, R-NC, accusing her of lying to Congress. It got so heated that one Democrat on the committee even called out McHenry for “rude and disrespectful behavior.” Treasury Secretary Tim Geithner – who has feuded with Warren in the past in her old role as director of the Congressional Oversight Panel – defended her the following day, arguing that the Republicans’ conduct at the hearing was “deeply unfair to her.” But if nothing else, the GOP’s stance reiterated what a polarizing figure Warren is on the Hill.

On Thursday the possibility of a Warren recess appointment was evident on the Senate floor. While senators bolted for home after passing the Patriot Act on Thursday evening – not to return until Monday June 6 – they did not technically go into recess, opting instead to conduct “pro forma” sessions next week. The move stemmed from Republican concerns that President Obama would use the recess to appoint Elizabeth Warren to run the consumer bureau. If the Senate takes a break lasting four days or longer, the president can appoint a nominee without subjecting the person to a confirmation vote. But “pro forma” sessions prevent that from happening.

The Senate’s top Republican Mitch McConnell said Friday that he never thought the president intended to make any recess appointments over the Memorial Day holiday.

“I was confident there would not have been recess appointments based on conversations I had had with the administration,” he said.

However, what will happen the next time the Senate is set to recess come the July 4 holiday? Warren clearly wants the job, but it remains to be seen if the White House will give it to her or not.

Senate Republicans are making their opposition to her – and to the bureau – well known. As Congress debated the Wall Street reform bill last summer, GP lawmakers vociferously objected to the agency, arguing that it would wield too much power and could ultimately do more harm than good.

Earlier this month they resumed the fight. 44 of the 47 GOP senators vowed in a May 5 letter to President Obama that they would not confirm anyone to lead the agency unless the administration made major structural changes, such as scrapping the director’s position and replacing it with a five-person board. Democrats countered that the GOP’s proposed changes would gut the agency, creating more bureaucracy and slowing its ability to respond to looming financial issues. But if the 44 Republicans remain united in their demand for major changes to the bureau, then Democrats in the Senate would not have the votes needed to overcome a filibuster and confirm a nominee to lead the agency.

In addition, if certain Democrats get their way, Warren won’t be the subject of any Senate confirmation votes – she’ll be participating in them. Senate Majority Leader Harry Reid, for one, has approached Warren in an effort to convince her to run against Brown for the Massachusetts Senate seat next year. But no decision on that front is likely to come until she knows whether or not the White House will tap her to run the watchdog agency that she has long championed.

Stay tuned…


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