SHAKER HEIGHTS: Defying Republican lawmakers, President Barack Obama on Wednesday went around the U.S. Senate and installed a national consumer watchdog on his own, provoking threats of a constitutional showdown in the courts.
Setting a fierce tone in the election-year fight for middle-class voters, Obama said, “I refuse to take ‘no’ for an answer.”
Obama named Richard Cordray, former attorney general of Ohio, to be the first director of the Consumer Financial Protection Bureau after giving up on hopes for a confirmation vote in the Senate. The appointment means the agency is able to oversee a vast swath of lending companies and others accused at times of preying on consumers with shady practices.
In political terms, the move, delivered on the day after presidential caucuses in Iowa showered attention on his opponents, was the equivalent of a challenge to Republicans in the Senate who had blocked his nominee.
Presidents of both parties long have gotten around a stalled confirmation by naming a nominee to a job when the Senate is on a break through a process known as a recess appointment.
But Obama went further by squeezing in his appointment during a break between rapid Senate sessions this week, an unusual move that the GOP called an arrogant power grab.
The White House said what the Senate was doing — gaveling in and out of session every few days solely to avoid being in recess — was a sham. Obama’s aides said the president would not be stopped by a legislative gimmick, even though it was Senate Democrats who began the practice to halt President George W. Bush’s appointments.
Consumer groups hailed Obama’s decision; the U.S. Chamber of Commerce balked and warned it was so legally shaky that the consumer bureau’s work might be compromised.
The top Senate Republican, Minority Leader Mitch McConnell, said Obama had “arrogantly circumvented the American people” and endangered the nation’s systems of checks and balances.
And House Speaker John Boehner, R-West Chester, said: “It’s clear the president would rather trample our system of separation of powers than work with Republicans to move the country forward. This action goes beyond the president’s authority, and I expect the courts will find the appointment to be illegitimate.”
Mitt Romney, a leading Republican presidential candidate, accused Obama of displaying “Chicago-style politics at its worst.”
It was not clear who might sue over the matter. Most likely, a private party regulated by the consumer agency would have the legal standing.
More than a standoff over one appointment, the fight speaks to the heart of a presidential campaign under way.
Obama is presiding over a troubled but improving economy. To try to win over voters, he is employing two strategies: in-your-face politics against a Congress held in low public regard, and a campaign pitch that he would represent the crunched middle class better than any of the Republicans he would face.
The Cordray appointment is an attempt to fit both.
Only with a director in place can the consumer bureau keep “dishonest” mortgage companies, payday lenders, debt collectors and others from harming consumers, Obama said at Shaker Heights High School.
Cordray essentially starts right away, although his nomination doesn’t become official until later in the week, the White House said. He is expected to serve until at least through 2013, which is the end of the Senate’s next session.