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Richard Cordray Named Consumer Chief in Recess Appointment

January 4, 2012 by Leave a Comment

The White House also announced that the president would use his recess powers to fill three vacancies to the National Labor Relations Board, another move certain to infuriate Republicans who had urged him not to do so.

The decision to install Mr. Cordray without Senate approval under the Constitutional provision for making appointments when lawmakers are in recess was a provocative opening salvo in Mr. Obama’s re-election strategy of demonizing Congress.

The president, announcing his decision before a political rally-like crowd of 1,300 at a high school here in Mr. Cordray’s home town, seemed to welcome a contentious second session of the 112th Congress, in which any attempts at bipartisan compromise appear in danger of being lost in all-out election-year war.

“I refuse to take ‘no’ for an answer,” Mr. Obama said.

He said he had looked for opportunities to work with Congress. But, he said, “I am not going to stand by while a minority in the Senate puts party ideology ahead of the people we were elected to serve.”

Building on efforts to cast himself as a protector of the middle-class, the president portrayed Mr. Cordray as his hand-appointed protector of consumers in his role as director of the Consumer Financial Protection Bureau. He wasted no time in painting Republican opposition to Mr. Cordray as another sign of the party putting the interests of Wall Street above the concerns of ordinary Americans.

“The only reason Republicans in the Senate have blocked Richard is because they don’t agree with the law that set up a consumer watchdog in the first place,” Mr. Obama said.

Republicans began attacking the appointment hours before Mr. Obama officially announced it, arguing that it was unconstitutional and calling it a brazen attempt to undercut the role of the Senate to advise and consent the executive branch on appointments.

“This is an extraordinary and entirely unprecedented power grab by President Obama that defies centuries of practice and the legal advice of his own Justice Department,” the House speaker, John A. Boehner, said in a prepared statement. “The precedent that would be set by this cavalier action would have a devastating effect on the checks and balances that are enshrined in our Constitution.”

For the president though, the appointment presented the perfect opportunity for him to try to capitalize on what the White House views as one of its greatest strengths going into the presidential election: the widespread disgust with which many Americans have come to view Congress.

By blocking Mr. Cordray’s appointment after he received majority support in the Senate — he was impeded by a filibuster — Congressional Republicans may have handed Mr. Obama another cudgel to hit them with this year, and the White House tried to pick an opportune time to wield it. The appointment seemed deliberately timed, coming a day after the Iowa caucus vote, and intended to kick dirt in the face of Republicans.

There was debate over whether Mr. Obama could have avoided a constitutional challenge by making the appointment on Tuesday in the short window between the first and second session of the 112th Congress.

By waiting until Wednesday, when Congress had a pro forma session that Republicans said meant it was not technically in recess, Mr. Obama may have provided Republicans a chance to argue that, technically, the recess appointment was invalid.

Jay Carney, the White House press secretary, said White House lawyers were confident Mr. Obama had the authority to make the appointment. “When pro forma sessions are simply used as an attempt to stop the president from making an appointment,” he said, then the president is within his rights to move ahead.

President George W. Bush, by this point in his tenure, Mr. Carney noted, had made 61 recess appointments, compared to Mr. Obama’s 28. But from 2007 through the end of Mr. Bush’s presidency, Democrats, under the rule of Senator Harry Reid of Nevada, the majority leader, used pro forma sessions to block others.

Democrats offered strong support of the president. “Despite admitting that President Obama’s nominee, Richard Cordray, is qualified for the job,” Mr. Reid said, “Republicans denied him an up-or-down vote in an effort to substantially weaken the agency.”

Mr. Cordray accompanied the president on Wednesday on his trip to Ohio. He looked slightly shell-shocked when he got off Marine One to board Air Force One for the flight to Cleveland, clutching his brown folder to his chest as he walked to the plane.

But he sounded ready for battle once the plane landed in Cleveland and reporters cornered him under the wing, issuing a not-so-veiled warning to Wall Street.

“We’re going to begin working to expand our program to non-banks, which is an area we haven’t been able to touch before now,” he said.

Charlie Savage contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=b1e4ebec65d891a8c16054c33ef52e14

Filed Under: Business News Tagged With: , ,

Senate Stops Consumer Nominee

December 9, 2011 by Leave a Comment

The nominee, Richard Cordray, was rejected after Democrats failed to achieve the 60 votes they needed to move his nomination forward. The vote was 53 yes, 45 no.

President Obama left open the option of a recess appointment, although Republicans have thwarted that tactic recently by staying in rump sessions.

“We are not giving up on this,” he said. “We are going to keep on going at it. We are not going to allow politics as usual on Capitol Hill to stand in the way of American consumers’ being protected.”

Senator Mitch McConnell of Kentucky, the Republican leader, said his party had made clear for months that it would not approve a leader for the watchdog consumer agency until the law that established it was amended.

Until three changes are made, he said, “We won’t support a nominee for this bureau — regardless of who the president is.”

One of those changes would put a board in charge of overseeing the bureau instead of the director, abolishing the post. Others would subject the agency to the Congressional appropriations process, giving lawmakers more sway over its policies, and would give other financial regulatory agencies a check on its rules.

Senator Sherrod Brown of Ohio, a Democrat, said that the opponents’ “first loyalty is to Wall Street banks.”

The agency can accomplish part of its mission, the protection of consumers from unscrupulous lending practices, without having a director in place. But some of its new powers are vested by law in the director, so it could not expand into realms like the regulation of payday lenders and other nonbank financial businesses.

The power struggle between the financial sector and its check-cashing, card-carrying customers has developed into one of the fault lines along which the political parties are playing out their own rivalries as the election year arrives.

Previous opposition from Republicans led to the withdrawal of Elizabeth Warren from consideration for the post. She is a Harvard law professor who was the driving force behind the agency’s creation and is now a Democratic candidate for the United States Senate in Massachusetts.

Opposite her, in ideological terms, are those in Congress who say the real problem is not so much the need to regulate the financial world as to rein in the Washington regulators.

“This is not about the nominee, who appears to be a decent person and may very well be qualified,” said Senator Orrin Hatch, Republican of Utah, according to the Associated Press. “It’s about a process that is running out of control.”

Senator Harry Reid of Nevada, the majority leader, called it “the first time in Senate history a party blocked a qualified nominee solely because it disagrees with the existence of an agency that was created by law, through a bipartisan vote.”

Democrats have accused the Republicans of reneging on the painstakingly wrought compromises that brought the consumer board into existence as part of the Dodd-Frank financial reform law of 2010.

Mr. Cordray, a five-time Jeopardy champion, is a former attorney general of Ohio noted for his aggressive investigations of mortgage foreclosure practices. Currently in charge of enforcement at the consumer agency, he was nominated in July to lead it.

In his confirmation hearings in September, he told a Senate committee that he would make it a priority “to streamline and cut back” a mountain of burdensome regulations that discourage banks from lending to consumers. But that stance, intended to reassure Republicans on the committee, did not mollify them. At a time when Congressional Republicans have been opposing most of the administration’s approaches to regulations, the economy and presidential appointments, Mr. Cordray’s prospects were never better than bleak.

President Obama, in a speech in Kansas this week on economic policy that was laden with populist overtones, singled out Thursday’s Senate vote for attention and said he would veto any legislation undoing consumer protections in the world of finance.

“Does anyone here think the problem that led to our financial crisis was too much oversight of mortgage lenders or debt collectors? Of course not,” he said.

“Financial institutions have plenty of lobbyists looking out for their interests,” he said. “Consumers deserve to have someone whose job it is to look out for them. I intend to make sure they do, and I will veto any effort to delay, defund or dismantle the new rules we put in place.”

This article has been revised to reflect the following correction:

Correction: December 8, 2011

Because of an editing error, an earlier version of this article incorrectly reported the Senate’s vote on Richard Cordray’s nomination was 55 yes, 45 no. The vote was 53-45.

Article source: http://feeds.nytimes.com/click.phdo?i=c0754785bbb12bfe975bdf9d6a28f07c

Filed Under: Business News Tagged With: , ,

Geithner Staying (for Now)

July 1, 2011 by Leave a Comment

Normally, that would not qualify as news. But Mr. Geithner’s comments came in a frenzied afternoon of speculation after news reports that he was considering leaving the Obama administration in the coming months, after a deal is reached with Congress to reduce the budget deficit.

Mr. Geithner’s comments, made at a conference in Chicago organized by former President Bill Clinton, were clearly intended to douse that speculation, underscoring how worried the White House is about the potentially destabilizing effect of his departure as it struggles with a fragile recovery and holds tough negotiations with Congress to avert a debt crisis.

“I live for this work, it’s the only work I’ve done, and I believe in it,” Mr. Geithner said in reply to a question from Mr. Clinton about his career plans. “I’m going to be doing it for the foreseeable future.”

Mr. Geithner, who turns 50 in August, said his son had decided to attend his final year of high school in New York, where Mr. Geithner previously lived, which meant that he would be commuting between Washington and New York for a while.

Earlier in the day, two administration officials familiar with Mr. Geithner’s thinking said family issues were weighing on him, as well as the recognition that there was a window of opportunity for him to leave after a debt deal was reached, but before the election year of 2012.

If Mr. Geithner does depart, he would be the last member of Mr. Obama’s economic brain trust to leave after two-and-a-half years of turmoil. In that time, the White House confronted a financial crisis, a historic recession, near double-digit unemployment and a recovery that has yet to gain traction.

Austan Goolsbee, one of Mr. Obama’s chief economic advisers, recently announced he would return to his teaching post at the University of Chicago. Lawrence H. Summers, a former Treasury secretary in the Clinton administration and a major Obama adviser, left late last year for Harvard, while Christina Romer, Mr. Obama’s first head of the Council of Economic Advisers, returned last summer to the University of California, Berkeley.

Of all these departures, Mr. Geithner’s would arguably have the greatest impact. He has become one of the president’s closest and most trusted counselors, attending his daily briefings and coordinating the White House’s strategy on crucial issues like financial reform and pressuring China on its currency.

Mr. Geithner’s influence within the administration has grown as other senior advisers have left, including some with whom he had clashed. He is perhaps now at the peak of his power, urging along the president’s gradual embrace of deficit reduction and heading the administration’s focus on foreign trade as an opportunity to accelerate growth at home.

Equally important is the credibility he enjoys on Wall Street, where he worked as president of the Federal Reserve Bank of New York before joining the Obama administration. Mr. Geithner is seen as deeply knowledgeable about the intricacies of modern finance and protective of the system’s health.

As Congress dallies over whether to raise the debt ceiling, Mr. Geithner’s repeated and forceful assurances that Washington understands the ceiling must be raised, and his unequivocal commitment that it will indeed be raised, have helped to preserve calm among investors.

Finding a replacement for him, and winning Senate confirmation would not be easy. Among potential candidates are Erskine Bowles, former chief of staff to Mr. Clinton and co-chairman of President Obama’s deficit commission; Roger Altman, an investment banker and former deputy Treasury secretary in the Clinton years; Janet Yellen, the vice chairwoman of the Federal Reserve; and Gene Sperling, director of the National Economic Council, who previously served as a lieutenant to Mr. Geithner.

But any of those candidates would most likely face a contentious confirmation hearing in the Senate as the country heads into a presidential election year and especially so if the economy remains sluggish. 

For all these reasons, reports that Mr. Geithner was leaving captured the attention of Washington and financial markets.

The drama began in midafternoon when Bloomberg News reported that Mr. Geithner was weighing his departure, citing three unidentified people familiar with his thinking. The White House and Treasury declined to comment on the report, but The New York Times, The Wall Street Journal, and other media organizations soon confirmed the gist of it and posted their own versions.

Officials cautioned that Mr. Geithner had made no decision, and directed reporters to listen to a discussion he was scheduled to have with Mr. Clinton in Chicago, where he would address his plans.

Seated on a dais across from Mr. Clinton, Mr. Geithner argued that a deal to reduce the deficit was crucial to demonstrate, at home and abroad, that the United States could put its fiscal house in order.

“If we can lock in some long-term reforms, then we’ll have a chance to turn our attention to the many other challenges facing our country,” Mr. Geithner said. He predicted that the American economy could return to the brisk growth it enjoyed during the 1990s.

“We’re just living with the scars, damage from the worst crisis since the Great Depression,” he said.

Their discussion wound to a close, and Mr. Clinton declared he would ask one “press question” — namely, was Mr. Geithner planning to leave? He smiled, offered his demurral, and the panel ended — and with it, it would seem, his hope of returning to New York any time soon.

Binyamin Appelbaum and Michael Shear contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=28845b4a7b78dbd40d3a2e8d6bf0d7d8

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News Analysis: Job Growth Alters Playbook for Obama and His Critics

April 2, 2011 by Leave a Comment

PRESIDENT OBAMA has not had a lot of good news in a term defined by assorted crises. But on Friday he reported the “good news” about job growth in March to an appreciative audience at a United Parcel Service shipping facility here — and did so with a bit more of a celebratory air, and less caution, than in the past.

After 12 months of up-and-down job creation, the significant increase in March suggested that maybe, just maybe, the economy was gaining enough strength to grow and bring unemployment down substantially this year.

And as the unemployment rate ticked down, the hopes of Mr. Obama and his party ticked up: perhaps by the approaching election year they could claim vindication for the stimulus policies Democrats have enacted, or at least dodge the sort of blame that Republicans so effectively stuck them with last November in the midterm elections.

At the same time it has given Democrats new ammunition to argue that Republican efforts to cut spending could hurt the recovery just as it is gaining traction, and that forcing a government shutdown could put more people out of work.

“You should know that keeping the economy going and making sure jobs are available is the first thing I think about when I wake up in the morning,” Mr. Obama said. “It’s the last thing I think about when I go to bed each night.”

No doubt. Few metrics are as critical to re-election as the employment rate. Even at 8.8 percent in March, the lowest level in two years, the jobless rate is still high in political as well as economic terms, and it is not expected to fall significantly before November 2012.

The administration does not project the rate dropping below 8 percent until 2013. It was 7.8 percent when Mr. Obama took office after the recession began, and rose to a peak of 10.1 percent in October 2009 as the economy shed about 700,000 jobs a month.

The White House and the Democratic Party are banking on voters focusing not on the unemployment rate, but on a trend of job growth. That assumes, of course, the trend continues.

“While today’s jobs numbers are headed in the right direction, most Americans believe the economy is still pretty seriously off-track, making the jobs issue still a challenging one for the president,” said Neil Newhouse, a Republican pollster. “Looming on the nation’s economic horizon is the after-effects of the Japanese tsunami and the Middle East unrest, hardly the kind of stable economic environment needed for significant U.S. job growth.”

The United States Chamber of Commerce, in its statement noting the improved employment picture, emphasized caution given the global crises.

“The outlook for the international economy has worsened recently,” the chamber said. “If these problems were to spill over to the U.S. economy, causing growth to slow below its potential rate of growth of between 2.5-2.75 percent, they could upset the modest job gains we’ve seen thus far.”

A year ago, the effects of a European debt crisis set back the administration’s hopes that a full, self-sustaining recovery was under way. Last fall, Republicans won elections on the argument that Keynesian-style economic stimulus measures had failed, and that it was time to try an austerity policy of big cuts in government spending.

On Friday, Republican leaders in Congress pressed that policy argument even as they welcomed the new jobs report.

“Washington needs to do more to end the uncertainty plaguing job creators,” John A. Boehner, Republican of Ohio and the speaker of the House, said. “That means getting control of government spending, ending the threat of tax hikes, removing regulatory obstacles to job growth and approving stalled trade agreements that would open new markets for American exports.”

Since Republicans took control of the House in January, they have forced Democrats to agree to $10 billion in cuts from current spending and are seeking roughly $50 billion more. They will soon unveil plans for deeper cuts in 2012 and beyond.

Yet the potential for such deep cuts in domestics spending recently has caused a number of analysts at major corporations and economic forecasting firms to shave their projections of economic growth.

“This sign of jobs growth shows the president’s economic plan is starting to work,” said Senator Charles E. Schumer, Democrat of New York. “We should stick with it, and quickly reach a budget deal to avert a government shutdown that would risk these fragile gains.”

Many voters are not persuaded that the president’s policies are working; in nonpartisan national polls, slight majorities have disapproved of his handling of the economy. Future monthly unemployment rates will be central to whether those numbers improve as he seeks another term.

“If the economy continues to improve over the next year, the fact is it will strengthen President Obama’s political position,” said Geoff Garin, a Democratic pollster. “And,” he added, “if the economy slows down in the next year, the Republicans put themselves in a position to take a good share of the blame for that, because now a good case could be made that the president had the jobs numbers moving in the right direction until the Republicans pushed through their own fiscal policies.”

Michael D. Shear contributed reporting.

Article source: http://www.nytimes.com/2011/04/02/business/02obama.html?partner=rss&emc=rss

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