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President Obama's Next Moves on Leadership for the Consumer Financial Protection Bureau

As expected, last week Senate Republicans blocked President Obama's nomination of Rich Cordray to lead the new CFPB. They continue to hold the agency hostage, taking the unprecedented step of blocking its leadership unless the agency is first weakened.
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As expected, last week Senate Republicans blocked President Obama's nomination of Rich Cordray to lead the new Consumer Financial Protection Bureau (CFPB). They continue to hold the agency hostage, taking the unprecedented step of blocking its leadership unless the agency is first weakened.

Still, there were a few small signs that the Republicans are feeling some heat over their stand against American consumers. On the eve of the vote, Ohio Senator Rob Portman said that even if the Republican filibuster held, he didn't think Cordray's nomination was dead and he wanted to work toward a compromise. And Maine Sen. Olympia Snowe surprised everyone by declining to vote at all. She cited the potential perception of a conflict of interest due to the fact that the CFPB will have jurisdiction over her husband's business. What's odd is that Sen. Snowe was actively involved in the 2010 Senate debate over creating the CFPB, and she even sponsored a successful amendment to weaken the agency. For some reason, it didn't occur to her until the eve of an uncomfortable vote that she should recuse herself from such matters. Together with Massachusetts Sen. Scott Brown's November announcement that he would support Cordray, that makes three Republican senators who have shown signs of strain.

The key question is, what's next for the Cordray nomination? Will President Obama press his advantage and win the nomination, or will the effort stall?

The president has two good options. One is to appoint Cordray during the next Senate recess, which means by January 3. The other is to continue holding votes on Cordray, forcing the intransigent Republicans to face increasing public pressure until they give in (or the president makes a recess appointment). Even though President Obama said after the vote that he won't "take any options off the table," there's little reason so far to think he's charting either of these courses. But he should.

First, let's do a quick recap of the law on a recess appointment. Then we'll talk politics.

The Law

The president has two legal paths to a recess appointment in the coming weeks. First, as I've written multiple times, the House of Representatives claims that it can hold the Senate open to block a recess appointment, but the House can't do that without the president's consent. If the House and Senate disagree on whether to adjourn, the president can adjourn them both.

Second, President Obama can appoint Cordray when the current session of Congress ends, which must happen by January 3 (the 20th Amendment requires that annual congressional sessions begin on January 3). In between the old and new sessions the Senate must be in recess, even if only for an instant. Obama would not be the first president to make an appointment during this type of recess. On December 7, 1903, President Theodore Roosevelt appointed 169 military officers during a recess that appears to have lasted no more than an instant. At noon on that day, the Congress ended an extraordinary session and began a regular session, and that's when Roosevelt said his appointments took place. Obama can do the same on January 3.

The Politics

So the question isn't whether the president can appoint Cordray, but whether he will do it. He certainly should. To appoint Cordray would benefit America families and Obama's political campaign. It's a good deal for a sitting president.

Some people think the Obama campaign will delay moving quickly on Cordray so that the president can enjoy the benefits of the fight longer. It fits right in with his new narrative about fighting for a fair economy. But the president doesn't need to sit on the Cordray nomination to keep pushing the Wall Street vs. Main Street line. In fact, that would be a mistake. When you're winning, you need to press for victory, not let up. Then when you win, you pick another good fight quickly. You keep the opposition off balance. To allow the Cordray nomination to linger would give the opposition the chance to regroup, dig in, and fight back.

A failure to move quickly on Cordray would also expose the president to the criticism that he's not actually taking a strong stand for American families. That criticism would muddle the message that the White House is trying to send: "We're on your side, America. The Republicans are with the big banks."

To be clear, one good course of action involves prolonging the Cordray fight: holding a series of votes to keep the pressure on Senate Republicans. Those votes could yield real policy benefits in addition to whatever they do for political campaigns. If enough Republicans were to give in and vote to confirm Cordray, he'd have a 5-year term. In contrast, a recess appointment would last only through the next congressional session, meaning no more than one year, though he could be reappointed.

Right now, the signs aren't good for a recess appointment or a series of votes. Media outlets have reported that Sen. Majority Leader Harry Reid is unlikely to make House Speaker Boehner try to hold the Senate open. In anticipation of Boehner's refusal, Reid likely will hold it open without attempting to adjourn. And if Senate Democrats were planning to hold a series of votes on Cordray, they should have started already.

Some people I've spoken with are concerned that the president will avoid a recess appointment for fear of being accused of doing something unjustified or inappropriate. This would be a mistake.

First, the administration should dismiss out of hand the view that perhaps the president should avoid using his constitutional power to adjourn the Congress merely because it has never been used before. The reason we're having this conversation in the first place is that the House is engaged in an unprecedented bid to block a presidential nomination by holding the Senate open -- something that isn't constitutional. The House has no business meddling in nominations, which the Constitution assigns to the president and the Senate; and the House has no authority to hold the Senate open without the president's consent.

Also, the mechanics of making the appointment and responding to accusations aren't complicated. For example, the White House could set up a recess appointment as follows: The Senate adjourns and goes home for the holidays when the House does. The president makes a recess appointment. If the Republicans accuse the president of wrongdoing, the White House can respond by saying,

What a strange suggestion. Under the Constitution, one house of Congress can't hold the other in session alone. The president must agree. It's a balance-of-powers issue. In this case -- where House Republicans want to hold the Senate open to block a consumer agency from protecting American families -- the president does not agree.

If the president pursues the other recess appointment path -- the one in which Majority Leader Reid technically keeps the Senate open during the holidays and Obama appoints Cordray between the old and new congressional sessions on January 3 -- then the White House can respond to allegations that the president is exploiting a technicality as follows:

On January 3, the 112th Congress ended and the 113th Congress began. Between the two was a recess, and the president appointed Rich Cordray during that recess. Republicans claim that this recess was a meaningless technicality. But their argument is no different. They claim that the Senate was technically in session for the past two weeks because a single senator showed up every few days to flick the lights on and off. In reality, the Senate was on recess. The Senators weren't here doing business. They certainly weren't available to vote on nominations. They were home for the holidays.

The Republicans can't have it both ways. Either we dispense with all the technicalities and the Senate was on recess for the past two weeks -- in which case the president appointed Cordray during that recess -- or we follow the letter of the law and the president appointed Cordray during the recess between sessions of Congress.

By the way, does anyone doubt that if the circumstances were reversed -- if the Republicans stood to win something by arguing that there technically will be a recess on January 3 -- they would not hesitate to make that argument?

Finally, the White House shouldn't forget that absurd and hyperbolic attacks are inevitable. They have been a constant ever since Obama took office and congressional Republicans vowed to waste four years doing little but trying to hold his presidency to a single term. Under those circumstances, there is no sense in President Obama compromising his positions in an attempt to blunt criticism.

He should keep up the fight.

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