I have been a strong backer of Elizabeth Warren to get the appointment. I think she is the best person for the job. But there are several reasons not to bypass the Senate on this first appointment. First of all, the power of the appointment does, and should belong to the President subject to confirmation by the Senate. Second, the real indefinite appointment is one confirmed by the Senate. Third, so long as the powers of the Bureau is vested in the Secretary (i.e. up until the moment the Senate confirms the first Director), the Bureau is not truly independent. And last but not least, an interim appointment without Senate confirmation would weaken Elizabeth Warren's authority and the Bureau's independence and credibility in the public's eye. Let's explore both the policy and the politics of this below.
Let's first explore the idea that the Secretary of Treasury can just appoint her indefinitely. This is not true. First of all, the Secretary of Treasury cannot appoint the Director of the Bureau at all. The law vests that power in the President in Section 1011, in the establishment clause:
(1) IN GENERAL.—There is established the position of the Director, who shall serve as the head of the Bureau.So the talk of temporary appointment likely rises from Sec. 1066 of the final bill that became law, which provides,
(2) APPOINTMENT.—Subject to paragraph (3), the Director shall be appointed by the President, by and with the advice and consent of the Senate.
(3) QUALIFICATION.—The President shall nominate the Director from among individuals who are citizens of the United States.
SEC. 1066. INTERIM AUTHORITY OF THE SECRETARY.The "designated transfer date" is the date designated by the Secretary of the Treasury on which consumer protection functions (as well as staff) from various agencies are officially transferred to the Bureau. The date, by law can be no earlier than 180 days and no later than 12 months from enactment (the Secretary may justify a longer period, but in any event, no more than 18 months from enactment).
(a) IN GENERAL.—The Secretary is authorized to perform the functions of the Bureau under this subtitle until the Director of the Bureau is confirmed by the Senate in accordance with section 1011.
(b) INTERIM ADMINISTRATIVE SERVICES BY THE DEPARTMENT
OF THE TREASURY.—The Department of the Treasury may provide administrative services necessary to support the Bureau before the designated transfer date.
There are a few things to notice there. First, the law gives the Secretary of Treasury the power to perform the functions of the Bureau until a Director has been confirmed by the Senate. He can choose to do so in any manner he wants, including by administrative appointment for someone to run. However, until the designated transfer date (which is at least six months from enactment), none of the consumer protection functions actually belong to the Bureau. So hurrying up an appointment is not going to actually do any good in terms of policy, as the respective departments would continue their consumer protection functions until the transfer date at any rate.
On the other hand, whether or not Secretary makes such an interim administrative appointment, even after the designated transfer date, the powers of the Bureau will continue to be vested in the Secretary, not in the Bureau until a Director is confirmed. That would seriously undermine the independence of the Bureau, as one of the reasons it was created was to separate the consumer protection functions from the mishmash of government bureaucracy and put it into one single agency. I find it rather fascinating the precise people who doubt Secretary Geitner's support for Elizabeth Warren -- in fact believe he does not want her appointed -- think that he should be made her boss indefinitely.
The best way to do this, then, is to take advantage of the buffer period provided by the designated transfer date and start the agency with a Presidentially appointed, Senate-confirmed, Director Elizabeth Warren. The White House does not seem to be afraid of a confirmation fight in the Senate. Appointing her this way is good on several policy fronts: it ensures that the Department of Treasury does not control the agency in any way, shape or form, the appointed director gets a 5-year term free from the political winds, and gets to continue to serve thereafter indefinitely until a successor has been appointed and confirmed (Sec. 1011(c)(2)).
As I have mentioned above, an attempt to bypass the Senate is a wrong judgment call because of a few political reasons as well: Such an appointment would be seen as politically weak and a power grab. Do any of us recall our reactions when John Bolton was recess-appointed by President Bush as the UN ambassador? I am far from saying that there are any comparisons between Warren and Bolton, but avoiding the Senate on a contested appointment - especially without giving the Senate an opportunity to consider the appointment before going to recess appointment - will be seen as a power grab. It will hurt both the new director and the legitimacy and credibility of the new agency.
On the other side, an Elizabeth Warren confirmation fight in the Senate bodes well for Democrats. She will likely be confirmed, but if the Republicans choose to put up a fight, that fight will only serve to energize the Democratic base in time for November. It's good politics and good policy. If the Republicans succeed in blocking her, there is always the last resort of a recess appointment. But it is a fight that would be absolutely worth having. And by denying rumors of an interim appointment, the President and the White House seem to be hinting at just such a fight.
We progressives ought not be asking the president to avoid a possible confirmation fight on Elizabeth Warren. We should not be afraid of a confirmation fight. We should not be trying to avoid the direct route. We should be preparing, instead, enthusiastically, for that upcoming battle. This is applicable both for policy and political reasons. We do not avoid the process just because there is going to be a fight, and we want to establish the agency as fully independent and autonomous from the beginning. Republicans have made a lot of political mistakes this cycle, but trying to take down Warren might be their worst one. There is no reason for us to fear this.