Obama reportedly to name Warren special adviser
Plan would avoid fraught Senate process
WASHINGTON — President Obama plans to appoint Harvard law professor Elizabeth Warren to a Treasury Department advisory post that will allow her to help create the consumer protection bureau, a key component of the new financial regulatory overhaul, without subjecting her to an arduous Senate confirmation process, according to a Democratic official.
Warren will be an assistant to the president and a special adviser to Treasury Secretary Timothy F. Geithner, said the official, who was briefed on the president’s plans but spoke on condition of anonymity because the official announcement has not been made. She will report directly to the president and Geithner and lead the administration’s work on the bureau.
Many consumer groups and Democrats have been pressuring Obama to nominate Warren to be the director of the bureau, a five-year term that requires Senate confirmation. Republicans, who have enough votes in the Senate to filibuster any nomination, have been aggressive in challenging Obama’s picks. Many have languished for months without a full Senate vote.
By appointing her to an advisory post, the White House avoids what had been expected to be a particularly intense proceeding, given Warren’s reputation as an anti-Wall Street reformer. It is unclear whether the appointment would preclude her eventual nomination to the director’s post.
“Given the filibuster, it would have been tough’’ to get Warren confirmed, Representative Barney Frank said in an interview last night. “Senate Republicans have been very resistant and I have to say, sadly, it’s not certain every Democrat would vote for her either.’’
Frank, who chairs the House Financial Services Committee and who helped craft the financial regulations overhaul law that bears his name, has been one of Warren’s biggest boosters. He applauded the president’s maneuvering.
“The White House has found a way to put her there, and this is the best news American consumers have gotten in the financial area ever,’’ he said.
Senate Republican leader Mitch McConnell could not be reached for comment, but Republicans have been warning against a interim appointment.
“Hiring her as a White House staffer is likely to please no one: not the liberals who want her running the show, not the president who has yet to rally that liberal base, and not the Street, which is still uncertain about who will be writing the rules of the road,’’ said a senior GOP aide who declined to be identified by name. “This president goes to great lengths to avoid Senate oversight of his nominees, but in this case it’s really a lose-lose.’’
A spokesman for Warren declined to comment last night.
Warren, 61, has taught at Harvard Law School since 1995 and is considered one of the nation’s leading specialists on the effects of bankruptcy on American families. Plain-spoken and direct, Warren has lambasted financial institutions for creating systems of lending to consumers that bury hidden fees and penalties in fine print and obscure terms. In response to such abuses, she became the leading proponent of the Consumer Financial Protection Bureau when the financial regulatory overhaul bill was being debated.
Warren has been serving as chairwoman of the congressional group that oversees how money for the 2008 bank bailouts was spent. In that capacity, she has occasionally clashed with Geithner over his department’s use of Troubled Asset Relief Program money and her committee’s findings.
Earlier this year, Geithner called Warren “an incredibly capable, effective advocate for reform’’ and said she was “way ahead of her time’’ in sounding the alarms about the housing crisis.
Obama has long been a friend and supporter of Warren, but he signaled in a news conference last week that he was keenly aware of the potential pitfalls of nominating a polarizing figure in the midst of a heated election year.
The Dodd-Frank financial regulatory law gives the Department of Treasury responsibility for setting up the bureau before it becomes an independent agency housed at the Federal Reserve.
The bureau’s budget could be as much as $400 million and it would have the power to establish and impose rules on mortgages, credit cards, and other consumer credit products.
Some banking industry representatives have said that Warren’s consumer advocacy might impair her ability to lead the new bureau. Having her work at Treasury could alleviate concerns by the financial industry about how she might use the agency’s wide authority.
“This could be a wise move,’’ said Wayne Abernathy, an executive vice president at the American Bankers Association, who handles regulatory affairs. The agency “would start off with accountability and oversight.’’
Material from Bloomberg News and the Associated Press was used in this report. Donovan Slack can be reached at email@example.com.