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Obama circumvents Congress to make appointments

By Peter Nicholas, Lisa Mascaro and Jim Puzzanghera, Tribune Washington Bureau –

SHAKER HEIGHTS, Ohio — President Barack Obama kicked off the election year aggressively, picking a fight with congressional Republicans by sidestepping the Senate to fill the top job at the government’s newly created consumer protection bureau.

He also filled three vacancies on the National Labor Relations Board, which referees labor-management controversies — a top priority of his allies in labor unions.

The appointments Wednesday, which had been stalled in the Senate, came as Obama moved to make confronting Congress a central part of his strategy for re-election. His job approval rating remains low, but Congress’ standing is even lower — “as unpopular as Ebola virus” — as one administration aide recently put it. In a confrontation between the two, the president will have the upper hand, White House aides say.

In the case of the Consumer Financial Protection Bureau, the White House hopes to portray Obama as standing up for middle-class families and Republicans as beholden to banks and mortgage companies.

Underscoring the political theme, aides hung a large blue banner proclaiming “We can’t wait” in the high school gymnasium here where Obama announced the appointment of Richard Cordray, Ohio’s former attorney general, to head the bureau. It was Obama’s 17th trip to Ohio, a major swing state in the election, and came the day after former Massachusetts Gov. Mitt Romney won a narrow victory in the first contest in the Republican nomination battle.

Cordray’s nomination has been blocked in the Senate since summer by a Republican filibuster, which Obama said had hurt consumers. “Every day that we waited was another day when millions of Americans were left unprotected,” he said. “Without a director in place, the consumer watchdog agency that we’ve set up doesn’t have all the tools it needs to protect consumers against dishonest mortgage brokers or payday lenders and debt collectors who are taking advantage of consumers.

“That’s inexcusable. It’s wrong. And I refuse to take no for an answer.”

Republicans reacted furiously. House Speaker John A. Boehner, R-Ohio, called Obama’s move “an extraordinary and entirely unprecedented power grab.” Senate Minority Leader Mitch McConnell, R-Ky., said the president had acted “arrogantly” and that his decision “fundamentally endangers the Congress’ role in providing a check on the excesses of the executive branch.”

Romney called the appointments “Chicago-style politics at its worst.”

Obama made the appointments under his power to fill vacancies during a congressional recess. Republicans have been forcing the Senate into pro forma sessions much of the year to forestall precisely that move. They argue that Congress has not been on recess for more than three days at a time and that Obama’s move broke a long-standing gentlemen’s agreement over the use of recess appointments.

Democrats, under Majority Leader Harry Reid of Nevada, sporadically used the same strategy of calling “pro forma” sessions to prevent President George W. Bush from making recess appointments. But the Republicans used the strategy throughout 2011 as the procedural arms race in Congress escalated.

White House lawyers believe that the pro forma sessions are a “gimmick,” said Gene Sperling, the White House economic policy chief, and contend that Obama was within his authority.

In addition to Cordray, Senate Republicans have blocked nominations to the National Labor Relations Board, saying Obama’s appointees were too favorable to unions. The stalemate had left the five-person board without a quorum to take most actions.

The appointments are almost certain to lead to legal challenges from businesses affected by the consumer bureau or the labor board. Unless a court rules otherwise, the nominees can serve until the end of 2013.

The procedural snarl comes on top of a bitterly waged substantive fight over the consumer bureau. Several Republicans have spoken highly of Cordray, but 44 GOP senators said last year they would block any nominee to the agency until changes were made to reduce its powers. That fight was part of an overall effort by Republicans to roll back parts of the 2010 financial reform law of which the consumer agency was a centerpiece.

Cordray’s nomination got 53 votes last month, a majority, but short of the 60 needed to end a filibuster. Just one Republican, Sen. Scott Brown of Massachusetts, voted with Democrats in his favor. Brown announced support of Cordray’s appointment Wednesday. He is seeking re-election and is likely to be running against Democrat Elizabeth Warren, the liberal favorite who was largely credited with creating the new consumer bureau.

The impasse had stalled the bureau’s ability to issue rules governing finance companies, payday lenders and mortgage brokers. The agency formally opened in July and took over existing government authority to regulate banks. But the law said it could not regulate other consumer finance industries until an agency director was in place.

Before his speech, Obama, along with Cordray, met at the Cleveland home of an elderly couple who had been victims of a mortgage scam. William and Endia Eason had signed up with a broker who took out loans intended for home repairs, pocketed the money and disappeared, according to the White House.

“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,” Obama said. “They want to weaken the law. They want to water it down. And by the way, a lot of folks in the financial industry have poured millions of dollars to try to water it down.

“The financial firms have armies of lobbyists in Washington looking out for their interest,” Obama said. “You need somebody looking out for your interest and fighting for you, and that’s Richard Cordray.”

Obama’s move probably will further embitter relations between Democrats and Republicans on Capitol Hill. But Obama’s advisers believe that lawmakers have little leverage over the White House in 2012. By contrast with previous years, when Obama advanced an ambitious legislative agenda, this year, the White House has identified only one “must-do” issue for Congress: renewal of the payroll tax cut through Dec. 31.

Obama received Reid’s blessing for the confrontational strategy. The White House also made a cursory call to McConnell’s office Wednesday morning before the announcement.

Reid criticized Republicans for blocking a vote on Cordray. “Americans are looking to us to find common ground, not grind the business of the American people to a halt until one side gets everything it wants,” he said.

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