Push On to Have Professor Head Consumer Agency
Obama preference unclear; backers are urging Warren
WASHINGTON - Harvard Law School professor Elizabeth Warren, whose rise to prominence has been fueled partly by her proposal for a federal consumer protection bureau, now is at the center of a political fight over whether President Obama should nominate her to run the powerful regulatory body.
The bureau will be established under financial legislation that Obama signed yesterday. But the president hasn't said whether he will name Warren to run it, and some Democrats worry that she would face a tough confirmation fight in the Senate.
That has prompted an uprising among Warren's legion of supporters, many of whom have come to know her from her appearances on newscasts, "The Daily Show With Jon Stewart,'' and in a Michael Moore documentary about capitalism. The possibility that Warren might be passed over for the job has prompted her backers to launch a lobbying campaign that had gained more than 160,000 online signatures this week.
Warren for months has been one of the most visible public figures to call for overhauling the nation's financial laws. Business groups spent millions of dollars in an unsuccessful effort to defeat her proposal for a consumer protection bureau. Yet inside the Obama administration, top officials have debated whether to nominate her to run the bureau, in part because of concerns that she is seen by some as a divisive figure and would stir a controversy in the Senate.
"She is an iconic figure in the [Democratic] Party who has gained widespread support, not only from consumers, but I think the public as a whole,'' said Michael Greenberger, a consumer advocate and former director of trading and markets of the Commodities Futures Trading Commission. "She single-handedly made the concept of consumer financial protection politically viable and politically necessary. If she is not appointed, there will be tremendous disappointment on the part of the advocacy groups that worked so hard on the legislation.''
White House spokeswoman Amy Brundage said that no decision on the nomination has been made but said the administration believes Warren "is confirmable.''
With the administration having considerable latitude on how to enact the legislation, Warren is seen by some as a proxy for how tough the administration will be in creating and enforcing new regulations.
The online petition created by Warren's supporters suggests - without evidence - that Warren is opposed by Treasury Secretary Timothy Geithner. "Tim Geithner is a longtime Wall Street insider, and if he's recommending against Elizabeth Warren, that's all the more reason to appoint her,'' the petition says.
Administration officials denied that Geithner has opposed Warren's nomination, but they acknowledged that Obama is considering other candidates, including a top Geithner aide, Michael Barr, the assistant secretary for Financial Institutions. Some leaders of the pro-Warren forces believe that Geithner became too close to Wall Street in his prior job as head of the Federal Reserve Bank of New York and thus question his judgment.
"Geithner has consistently been the advocate for the bank's perspective,'' said Aaron Swartz, a Cambridge-based high tech entrepreneur who cofounded the Progressive Change Campaign Committee, which organized the petition drive for Warren's nomination. While Swartz said he doesn't know Warren personally, he believes she is uniquely qualified to give consumers a strong voice among regulators.
Geithner has refuted charges that he is too close to Wall Street banks and stressed his commitment to imposing regulations designed to prevent another economic collapse.
As for the possibility of a Warren nomination, Geithner spokesman Andrew Williams said in a statement that the Treasury Secretary admires her but stopped short of an endorsement. "Given her strong leadership on consumer protection, Secretary Geithner believes that Elizabeth Warren is exceptionally well qualified to lead the new bureau, and, ultimately, that's a decision the president will have to make,'' Williams said.
Warren has long been seen as having an inside track to the job. As a Harvard professor, she is one of the nation's leading researchers into the causes of bankruptcy and credit problems. She helped convince Obama that the consumer bureau should be a cornerstone of the financial overhaul. The bureau will monitor financial products such as mortgages and credit cards, giving it wide latitude over a large swath of the economy.
But Warren appears to have upset some within the administration as a result of her chairmanship of the Congressional Oversight Panel, which reviews spending of the $700 billion set aside by Congress to respond to the 2008 financial crisis. Warren has used her position as head of the panel to call Geithner to testify about the spending for what has been called the Wall Street bailout. In one hearing, Warren lectured Geithner about his handling of the bailout, saying, "none of this seems fair.''
Warren, who used her front-row seat at yesterday's signing ceremony to snap pictures as the president signed the bill, declined afterward to comment on a potential nomination.
One of Warren's most vigorous supporters has been House Financial Services chairman Barney Frank. In an interview yesterday, Frank said he has reemphasized his support of Warren to the Obama administration during the last week and expressed frustration at the possibility that the White House might decline to nominate her in order to avoid a Senate fight.
"I'm not sure that being easily confirmable is a condition I'd want to brag about,'' Frank said.
Senate Banking Committee chairman Christopher Dodd of Connecticut said in an interview after the signing ceremony yesterday that "I don't know'' whether Warren can be confirmed. "I like Elizabeth very much,'' Dodd said, while adding, "I need a nominee who can get 60 votes.''
The financial bill was approved with 60 votes - the number needed to overcome a filibuster - with three Republicans from New England joining with 57 Democrats. A similar vote may be needed to enable Warren's confirmation. The Republicans were Senators Susan Collins and Olympia Snowe of Maine and Scott Brown of Massachusetts. Collins and Snowe did not respond to a request for comment. Brown spokesman Gail Gitcho said the senator "will review the qualifications of the nominee once there is one.''
The US Chamber of Commerce, which spent millions of dollars on a campaign that it called "Stop the Consumer Financial Protection Agency,'' said it is not taking a position on Warren. But David Hirschmann, president of the Chamber's Capital Markets Center, said in an interview that he is concerned that there would be "an unprecedented amount of power in one individual. So the question the Senate should ask any nominee is, ‘How will the director use that power? To preempt consumer's decisions or to inform, empower, and educate consumers?' ''