This morning, President Barack Obama plans to officially announce that Elizabeth Warren — Harvard Law professor and the current head of the Congressional Oversight Panel over the Troubled Asset Relief Program — will head the Consumer Financial Protection Bureau… sort of.
After months of will-he-or-won’t-he speculation by journalists, bankers, lobbyists and consumer-protection advocates, this week, it leaked that Obama plans to name Warren to an advisory role helping the administration build the new agency, the much-touted agency created in the financial-regulation reform law to protect the everyday purchasers of small financial products. Today, Obama plans to confirm the leak. Warren will not, as progressives wanted, lead the bureau. She will instead act as its midwife or architect, helping to set it up before perhaps staying to run it or perhaps leaving that work to someone else.
This decision, first reported by Jake Tapper of ABC News on Wednesday night, lead not to applause from the left and condemnation from the right, as expected — but to a kind of collective “huh?” Within 24 hours of the leak, various heavyweights in the financial and political press had declared the appointment: “creative,” “strange,” “confusing,” “curious,” “made-up,” “incomplete” and “tenuous.”
Even the key senators who crafted the CFPB reacted with baffled surprise. On Thursday, Talking Points Memo tracked them down and asked them whether they had any idea what the appointment meant. Sen. Chris Dodd (D-Conn.) responded, simply, “No.” Sen. Bernie Sanders (I-Vt.) said, “The answer is no. And that is not insignificant.” And Sen. Bob Corker (R-Tenn.) responded, “We ought to see. It appears to me that exactly the things that many of us thought were going to happen have happened. We’ll see. Maybe there are some details here that we’re missing” — really, a long-winded way of saying “no.”
Consensus became that the news leaked prematurely, before the White House had time to set out a standard description of the position and before it had time to update members on the Hill about the news. The title, for instance, seemed like a bureaucratic parody, an appellation designed to confuse. Rather than becoming CFPB administrator, a straightforward name for a straightforward job, Warren will be “Assistant to the President and Special Assistant to the Treasury Secretary on the Consumer Financial Protection Bureau” (putative acronym: APSASTCFPB). What responsibilities does that job hold? Will Warren really be calling the shots?
As of now, no one seems to know. Jonathan Cohn in The New Republic openly admitted he had little idea what to make of it: “Honestly, I’m still trying to figure out what’s about to happen — and whether those of us who like Warren for the job should be happy.” (He later reported that the job seemed to have real heft.)
The Wall Street Journal authoritatively laid out a job description: “Ms. Warren’s powers will be broad, despite her unusual title. She will recruit staff for the agency, set the policy mission and serve as the recognizable public face for a new agency the administration wants to promote,” one story said.
But the paper also ran an article called “Sidelining Liz,” arguing that she will hardly have the import once presumed, and arguing, “[This] might be good politics, but it isn’t good leadership by the Obama administration. The president who lobbied so hard for financial reform seems to be weaseling when it comes to implementing it.”
And how did the base react? Most organizations that had lobbied hard for Warren seemed understanding of the decision this week. MoveOn, for instance, got behind the Warren appointment immediately.
But other groups offered a little skepticism. The Progressive Change Campaign Committee, for instance, gave only golf claps. “This news shows that consumers have momentum and are on the verge of winning,” Stephanie Taylor, its cofounder, said in a statement. “If Elizabeth Warren is given full power to run the new consumer protection bureau and hold Wall Street accountable, it will mean real change — and voters will know that going into November’s election. If this appointment is window dressing and Tim Geithner controls the show, it would be a big disappointment and a victory for Wall Street.”
So why did Obama do it — naming Warren to a confusing new role, rather than the one that seemed her inheritance, given that the idea for the CFPB is hers? Why not make her the CFPB’s J. Edgar Hoover, as many hoped and presumed? The answer is the Senate confirmation process. This year, the upper chamber has delayed the confirmation of even non-controversial nominees. If the ambassador to Bulgaria has a 13-month wait to get her position, Warren — whose confirmation was a fight that Republicans wanted to pick — might have been held up for eons before ultimately not being confirmed.
Rep. Barney Frank (D-Mass.), one of the authors of the Dodd-Frank law, said yesterday that Warren did not want to go through that process. “She always said she didn’t want to be there as a permanent director. Some of the liberals are worried about it. It’s almost an insult to Elizabeth. She wouldn’t take this if there was the slightest impediment to her doing the job.”
Today, the administration has its first major chance to clear the air. Already, this morning, Warren has put up a post on the White House blog making the decision sound crystal clear and, frankly, sensible. “Over the past several weeks, the President and I have had extensive conversations about the vital importance of consumer financial protection,” she writes. “The President asked me, and I enthusiastically agreed, to serve as an Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau. He has also asked me to take on the job to get the new CFPB started — right now. The President and I are committed to the same vision on CFPB, and I am confident that I will have the tools I need to get the job done.“
That leaves just one big question: Will she stay to run it? You might already have guessed the answer: Nobody really knows.