Obama Appoints Cordray To Head Watchdog Agency

Jan 4, 2012
Originally published on January 4, 2012 5:19 pm
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President Obama made an end-run around Congress today. After months of battling with Republicans over his choice to run the Consumer Financial Protection Bureau, he resorted to a so-called recess appointment. Senate Republicans have insisted on pro-forma sessions every few days to prevent such a move.

As NPR's Tamara Keith reports, it's not clear who has the Constitution on their side.

TAMARA KEITH, BYLINE: Depending on who you ask, President Obama's recess appointment of Richard Cordray is either long overdue or an unconstitutional executive overreach. But first, a little background. Mr. Obama's nomination this summer was in trouble before it was even announced. Senate Republicans pledged to block any nominee to head the new consumer bureau. They wanted a board instead of a single director, and Congress to control the bureau's purse strings.

When Cordray came up for a vote, Republicans followed through and successfully filibustered, preventing an up or down vote even though a majority of senators supported Cordray. So today, President Obama did what many frustrated presidents before him have done.

PROFESSOR CARL TOBIAS: The Constitution has a recess appointments clause. And the president is exercising his authority under that clause.

KEITH: Carl Tobias is a constitutional law professor at the University of Richmond. He says there's something about this recess appointment that makes it unique: As far as the Senate is concerned, it isn't actually in recess. At least one senator has been showing up every few days for what's called a pro-forma session, a tactical move employed back when President Bush was in office, and now by Senate Republicans, to block a recess appointment by not technically recessing.

TOBIAS: The pro-forma session lasts for about 30 seconds, when someone from nearby comes in and gavels in the Senate to order, and then leaves for the next three days.

KEITH: Tobias says the validity of these pro-forma sessions hasn't been tested. And that's exactly what the president is doing with this nomination.

TOBIAS: And I think the president is saying, I have that authority, because he believes they recessed in December.

KEITH: Senate Republicans and their allies are furious. In a statement, Senate Minority Leader Mitch McConnell says the president has, quote, arrogantly circumvented the American people. David Hirschman, head of the Center for Capital Markets at the U.S. Chamber of Commerce, echoes this concern.

DAVID HIRSCHMAN: It opens grave constitutional questions about whether this recess appointment was legal. And my guess is, it will make it much harder for the agency to move forward.

KEITH: Hirschman and the chamber have been among the most vocal critics of the way the Consumer Bureau was designed. He says the president should have negotiated with senators who demanded changes to the agency.

HIRSCHMAN: So today's action is a choice of headline-grabbing over effective regulation.

KEITH: Many are saying this bold move by the president to defy Republicans in Congress could further poison already bad relations, and could lead to an election year filled with confirmation wars. Robert Weissman, president of the consumer group Public Citizen, says that was a risk worth taking.

ROBERT WEISMAN: The administration's position can't be: We will accept whatever abuse you heap on us because we're worried about having more abuse heaped on us.

KEITH: And, he says, it's not like the legislative process has been working all that well.

WEISMAN: What's the worst-case scenario, that he's not going to be able to pass legislation? Well, it's not as if legislation is moving forward, and it's not as if the Republicans aren't willing to filibuster all kinds of nominations.

KEITH: Cloud of uncertainty or no, the new director of the Consumer Financial Protection Bureau says he looks forward to regulating non-bank financial institutions - like mortgage brokers and payday lenders, which have been out of the bureau's reach up until now.

Tamara Keith, NPR News. Transcript provided by NPR, Copyright NPR.