President Barack Obama will make a mistake if he bypasses the Senate confirmation process to put Elizabeth Warren in charge of overseeing the establishment of the new Consumer Financial Protection Bureau. Warren is an excellent choice to head the agency, but by giving her authority without Senate approval Obama is abusing his power and handicapping the agency's potential impact. If the situation was reversed and a Republican president was undermining the Senate's role in executive appointments — a key separation of power — Democrats would be yelling "foul."
Warren is a Harvard law professor who has spent much of her career raising concerns about the financial security of the middle-class, making her a natural choice to be the first government consumer watchdog over the financial sector. She led the congressional oversight panel for the Troubled Assets Relief Fund and is an authority on bankruptcy law. The new consumer bureau, which survived a bruising fight in Congress to be included in the financial regulation overhaul passed in July, is considered her brainchild.
But Warren's ability to forcefully communicate how financial practices disadvantaged and even cheated average people has put her on a collision course with powerful monied interests. If she were to be formally nominated to head the new bureau — a post that carries a five-year term — a confirmation battle would surely erupt.
Understandably Obama is reluctant to formally nominate Warren when even his uncontroversial nominees have trouble getting confirmed. Senate Republican leaders have put up a wall of obstruction and delay, making Obama's nominees wait an unacceptably long time for a vote. But that doesn't license the president to sidestep the Constitution's checks and balances.
Obama plans to give Warren the power to build the new agency as a presidential adviser, similar to his chief of staff Rahm Emanuel. And she will be a special adviser to Treasury Secretary Timothy Geithner. The new law gives the Treasury the power to run the new bureau while it is in transition. But as Senate Banking Committee Chairman Chris Dodd said in opposing the president's planned action, the bureau will be vulnerable until it is firmly established.
The president's plan abuses his executive powers, creates bad precedent and puts the proper functioning of the new department at risk. He should reconsider.