Using recess power, Obama putting Cordray in job

January 4, 2012 - 1:55 PM
Obama

FILE - In this Dec. 1, 2011 file photo, Rich Cordray, assistant director of Enforcement for the Consumer Financial Protection Bureau (CFPB) is seen in Washington. Senior administration officials tell The Associated Press that President Barack Obama will use a recess appointment to name Cordray on Wednesday as the nation’s chief consumer watchdog despite steep Republican opposition. (AP Photo/Jacquelyn Martin, File)

WASHINGTON (AP) — In a defiant display of executive power, President Barack Obama on Wednesday will buck GOP opposition and name Richard Cordray as the nation's chief consumer watchdog. Outraged Republican leaders in Congress suggested that courts would determine the appointment was illegal.

With a director in place, the new Consumer Financial Protection Bureau can start overseeing the mortgage companies, payday lenders, debt collectors and other financial operations often blamed for practices that helped tank the economy. Even before Obama announced the move in an appearance in Ohio, Cordray said he would begin work right away.

Politically, the move immediately raised the level of confrontation for a president seeking re-election by championing the middle class and challenging an unpopular Congress. Acting right after Tuesday's GOP presidential caucuses in Iowa, Obama sought to grab attention and show he would not be slowed by making his most brazen leap-frog over Congress.

Republicans have halted Cordray's nomination because they think the consumer agency is too powerful and unaccountable. Leaders of the party responded in blistering fashion.

The Senate's top Republican, Sen. Mitch McConnell of Kentucky, accused Obama of an unprecedented power grab that "arrogantly circumvented the American people."

Added House Speaker John Boehner, R-Ohio: "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."

It was unclear who might undertake a legal fight. But people familiar with the matter said an outside private group regulated by the consumer agency might be in the best legal position.

By his move, Obama essentially is declaring that the Senate's short off-and-on legislative sessions are a sham intended to block him and do not count.

Yet it was his own party that started the practice when George W. Bush was president.

The White House braced for fallout, but said Obama was left with little choice to get the consumer agency fully running after months of stalemate.

White House communications director Dan Pfeiffer announced Obama's move on Twitter after senior administration officials first confirmed it to The Associated Press. Obama spokesman Jay Carney said White House lawyers have determined Obama is within his bounds to appoint Cordray now.

Cordray is expected to formally take over the job later in the week and stands to serve for at least the next two years, covering the length of the Senate's session.

In his comments in politically vital Ohio, Obama planned to say that every day Cordray waited for confirmation, millions of people remained unprotected from dishonest financial practices, according to prepared remarks obtained by the AP.

"When Congress refuses to act in a way that hurts our economy and puts people at risk, I have an obligation as president to do what I can without them," Obama said.

More than a standoff over one significant appointment, the fight speaks to the heart of a presidential campaign under way. Presiding over a troubled but improving economy, Obama's must persuade a weary middle class that he is their advocate, while fending off criticism from Republicans challengers and lawmakers.

Obama has constitutional power to make appointments during a congressional recess.

Expressly to keep that from happening, Republicans in the Senate have had the Senate running in "pro forma" sessions, meaning open for business in name with no actual business planned. Democrats started the practice when George W. Bush was president to halt him from making recess appointments.

The Senate held such a session on Tuesday and planned another one on Friday. Republicans contend Obama cannot make a recess appointment during such a break of less than three days, based on years of precedent, and they point to comments by Obama's own Justice Department echoing that view.

Regardless, the Obama White House now contends such an approach is a gimmick.

For all practical purposes, the Senate is in recess and Obama is free to make the appointment on his own, administration officials said.

McConnell shot back that Obama's move "lands this appointee in uncertain legal territory, threatens the confirmation process and fundamentally endangers the Congress' role in providing a check on the excesses of the executive branch.

The president also was expected to announce other recess appointments, possibly including nominees to the National Labor Relations Board.

Republicans have had little opposition if any to the qualifications of Cordray, a former Ohio attorney general. Their objection is with the consumer agency itself.

Obama and his team say lawmakers should try to revise the Wall Street oversight law if they don't like it, not keep the agency from performing its job.

Before his remarks at a high school in a Democratic suburb of Cleveland, Obama met with a family who got taken advantage of by a mortgage broker. He sought to use their story as an example of how the consumer agency can crack down on such practices.

Obama was focusing on the most Democratic congressional district in Ohio, a Cleveland suburb, a day after Mitt Romney won Iowa's Republican presidential caucuses by just eight votes. Obama's trip signals the White House's intent to keep the president in the public eye even as the political world focuses on the GOP's selection process.