Elizabeth Warren: 'If I'm Going to be Loud and Unwelcome, So Be It'

Obama's new watchdog tells Diane Sawyer she'll fight for middle class.

September 17, 2010, 1:51 PM

Sept. 17, 2010 -- Elizabeth Warren, the liberal activist tapped by President Barack Obama to help start the consumer watchdog agency she first proposed, today said she would pull no punches to stand up for middle-class Americans.

"The first thing I'm going to promise is that I'm going to be a voice in the room on behalf of middle class families and if that means I'm going to be loud or unwelcome at any point, so be it," Warren told ABC News' Diane Sawyer in an interview on "World News."

Warren, who has ruffled feathers in Washington as head of the Congressional Oversight Panel, said her sole priority is creating the new consumer protection bureau, not making friends in the nation's capital.

"I'm not looking for more jobs in Washington," she said. "What I'm looking for is to get a consumer agency up and going that levels the playing field, cuts out the tricks and traps that are going on now in credit, and really makes this economy and this government work more for middle class families."

Warren said the country's economy will not thrive as long as the financial industry preys on the middle class.

"We cannot grow and go forward on the basis of how much can we trick middle class American families," she said. "We have got to find a firmer foundation."

Warren became emotional when describing how much it means to her to be an advocate for consumers. She said her own daughter, who is now pregnant, has been having "a rough time" lately.

"They're the ones I do this for," she said. "This is what I've worked on, this is what I've studied, this is the family I come from. This system is broken now and it's crushing families all across this country. I'm just here to try and do what I can to help on behalf of those families and to think about my own little granddaughters and the upcoming little grandson to try to make things work better, a middle class that is strong and vital and hearty for them."

Earlier today the president was effusive in his praise of Warren in a speech at the White House.

"Getting this agency off the ground will be an enormously important task, a task that cannot wait," the president said. "That task is something I've asked Elizabeth Warren to take on."

The president called Warren, who will be an assistant and adviser, "one of the country's fiercest advocates for the middle class."

The president's decision, first reported by ABC News' Jake Tapper, will give Warren an important role in creation of the bureau, but will avoid a confirmation fight in the Senate, a political maneuver that has upset lawmakers on both sides of the political aisle.

Warren told Sawyer that the Senate confirmation process could have dragged on for a year, but her new role will allow her to start immediately.

"He said, 'You can get to work tomorrow if you don't care much about titles.' I said, 'Mr. President, that's the job I want, let me go to work tomorrow. That's what I want to do.'"

"I don't think this is about sidestepping a fight," she said.

Republicans, however, are irate that Obama did not nominate her for a permanent position that would have required the Senate's approval.

Sen. Judd Gregg, the ranking Republican on the Budget Committee, told ABC's "Top Line" that the president's decision to bypass the Senate was "a terrible adulteration of the process."

Gregg also voiced fears that Warren would pursue "a social justice agenda" in her new role at Consumer Financial Protection Bureau.

"My concern is that she would use the agency for the purposes of promoting social justice versus for the purposes of promoting better credit and having a stronger financial system," he said.

Such a view was echoed by Sen. Richard Shelby, the top GOP member on the Banking Committee.

"If we don't have banks that are viable and strong, where are we going to be then. She doesn't take this into consideration," Shelby said. "I think you have to have a balance. I think you have to have someone with more objectivity. I think this is a big mistake."

But Republicans are not alone in taking issue with the White House decision to circumvent the Senate process. Democratic Sen. Jeff Merkley of Oregon said he hoped Obama would nominate Warren to a permanent position in charge of the consumer agency not just a special advisory role.

"She is more than deserving of the job and the Senate should have the opportunity to confirm one of the nation's strongest consumer advocates," Merkley said.

The president on Friday did not respond to questions about why he decided not to appoint Warren to a permanent position with the agency.

Financial Industry Not Pleased

Not only has Warren's selection upset various Republicans on Capitol Hill but also infuriated the financial industry.

"This may be a calculated move to help fire up some groups ahead of the midterm elections, but it undermines the credibility and effectiveness of this already politicized new agency from day one," said David Hirschmann of the U.S. Chamber of Commerce.

An industry executive, speaking on the condition of anonymity, told ABC News, "She has no experience of running a government agency or working in the financial world. The ideal candidate would have both."

White House officials have said that Warren will "play the lead role" in setting up the agency. In addition, she will "advise the president on policies and programs that are designed to protect the financial interests of middle-class families."

Her title will be Assistant to the President and Special Adviser to the Secretary of the Treasury, heading the Consumer Financial Protection Bureau.

In a blog posted earlier today on the White House website, Warren vowed that the agency -- created by the Wall Street overhaul bill that passed Congress this summer in the wake of the 2008 economic meltdown -- would become "a tough cop on the beat."

"The new law creates a chance to put a tough cop on the beat and provide real accountability and oversight of the consumer credit market," she wrote. "The time for hiding tricks and traps in the fine print is over. This new bureau is based on the simple idea that if the playing field is level and families can see what's going on, they will have better tools to make better choices."

The new bureau was first proposed by Warren three years ago. In 2007, Warren, a professor at Harvard Law, proposed the creation of "a new regulatory body to protect consumers who use credit cards, home mortgages, car loans and a host of other products.

"Clearly, it is time for a new model of financial regulation, one focused primarily on consumer safety rather than corporate profitability," she wrote in an essay in Democracy: A Journal of Ideas.

Warren was picked in 2008 to lead the Congressional Oversight Panel, a watchdog group to oversee the government's $700 Troubled Asset Relief Program, known as TARP.

As head of the panel, Warren quickly proved to be a formidable force as she routinely criticized policies and decisions at Obama's Treasury Department under the leadership of Tim Geithner. She blasted the agency's embattled foreclosure prevention program this summer as "behind the curve."

In a report released Thursday, the panel said the bailout had only enjoyed "limited" success at its broader goal of helping the economy at large, an outcome that has caused a widespread public backlash and could prevent the government from making future bailouts.

Blunt Talk Disturbs the Peace

"Popular anger remains high about taxpayer support of America's largest banks, and that anger has only intensified in light of the continuing economic turmoil," the panel said in the report. "The TARP's unpopularity may mean that, unless the program's effectiveness can be convincingly demonstrated, the government will not authorize similar policy responses in the future. Thus, the greatest consequence of the TARP may be that the government has lost some of its ability to respond to financial crises."

Such blunt talk is par for the course for Warren, but not for Washington, where reports are usually written with more subtle language, composed in a kind of hidden code. Warren is fond of recalling an incident in early 2009 when an official on the Hill told her that one of the panel's initial reports was "too direct," suggesting that she take a more diplomatic approach.

"Well, then what's the point?" Warren replied.

The plain-spoken attitude ruffled feathers in Congress and the administration, where questions were raised about whether Warren -- a straight-shooting, no-holds-barred critic of both the financial industry and the federal government -- might be too controversial to win Senate confirmation.

Earlier this summer, sources told ABC News that Treasury Secretary Tim Geithner had "concerns" about Warren, while powerful Senate Banking Committee chairman Chris Dodd raised doubts about support for Warren on Capitol Hill.

In recent weeks, though, Warren met with President Obama on several occasions and it became clear that she would indeed be given the chance to form the consumer protection bureau. Her selection has thrilled liberals, progressives, labor unions and consumer groups just weeks before the November midterm elections.

"I offer my congratulations to Elizabeth Warren, both for the work that she did to create the agency and for the fact that she will now have the opportunity to make it function as it was intended," said Rep. Barney Frank, chairman of the House Financial Services committee. "I am very pleased that the president agreed with those of us who pushed hard for Elizabeth Warren to be appointed."

Warren Getting Right to Work

"Elizabeth Warren is a true champion for consumers," said Gail Hillebrand of Consumers Union. "She would give the new bureau the focus and foundation it needs to succeed. People need a real financial watchdog in Washington to look out for their interests, and she's an ideal choice."

The new agency will have the power to write rules that govern financial services and products such as mortgages and credit cards. Advocates say the agency will demand more transparency from the financial industry, such as reducing the fine print in credit card agreements and making them easier to read, an outcome that in turn will make product comparison easier for consumers and drive the market to provide better products.

The bureau will be a separate unit within the Federal Reserve, funded by the central bank. Instead of a host of consumer programs being spread across numerous agencies, as with the Fed, the Federal Deposit Insurance Corp. and the Federal Trade Commission, the new agency will consolidate them all under one roof.

"Never again," the president said, "will folks be confused or misled by the pages of barely understandable fine print that you find in agreements for credit cards, mortgages and student loans."

Warren stepped down from her post today at the Congressional Oversight Panel. Her work with the administration, it seems, will start right away. She will join Geithner Tuesday in hosting a mortgage disclosure forum at Treasury.

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