One of the annoyances of being president is that nearly everything is depicted as a "huge test" to pass or fail. The president's commitment to core values or his ideological fidelity or his political survival—something momentous is always "on the line." In truth, American presidents have multiple marking periods. They can flunk and flunk again and still succeed if they get the big things right.
So Obama will eventually recover if he decides not to appoint Elizabeth Warren to head the new Consumer Financial Protection Bureau (CFPB), which is the best-known part of the new financial-regulation law. But he would be making a terrible mistake to reject her, on both political and substantive grounds.
The working assumption in the White House is that Warren, a colorful Harvard Law professor and fierce consumer advocate, would be the hardest candidate to confirm. This is 100 percent wrong. The main alternative is Michael Barr, a well-regarded but little-known Treasury official who helped draft the bill. Barr is just as progressive as Warren, but the liberal base would be so demoralized by Obama snubbing Warren that any other nominee would be hamstrung from the start. And he is exactly the type of Obama nominee that Republicans on Capitol Hill have been burying all year. Because he's obscure, the GOP could delay Barr's nomination for months without fear of fallout. Warren's high profile gives her clout going into any hearings. Democrats who try to block her would be savaged by progressives in their home states. (Warren has become a rock star for the Netroots.) After some concern about wavering Democrats, all except possibly Ben Nelson seem set to back Warren, who may not be a household name but has considerable stature within the party.
Republican senators vote along party lines against Obama on almost every issue this side of Afghanistan. Having opposed the consumer bureau, the leadership will do everything it can to weaken it, including opposing Warren. But this particular obstructionism carries a price. The GOP would look horrible going into the fall campaign trashing the one official who has stood up for 200 million credit-card holders against predatory lenders. A few Republican senators (including Snowe, Collins, and Grassley) know this and seem willing to break ranks and oppose a filibuster.
Several conservatives have good relationships with Warren, in part because she's been critical of the Obama administration on banking regulation and foreclosure relief, which is part of her job as chair of the congressional oversight panel on the bailouts. Barr, by contrast, would be immediately (if unfairly) savaged as Tim Geithner's lackey.
Warren's fierce independence is exactly what makes the control freaks in the White House uncomfortable. Their doubts about her can be traced to the same economic boys' club that sniped at FDIC chief Sheila Bair and more recently blocked Laura Tyson, the top economist in the Clinton administration, from being the new head of the Office of Management and Budget. Geithner and Larry Summers aren't condescending to Warren (anymore), but they prefer other candidates. Their friend Rahm Emanuel is privately worried about her confirmability. Man up, Rahm. If a big fight over Warren comes (and I doubt it will), the battle won't be a distraction from the Democrats' fall campaign but the best thing that ever happened to it.
Should Obama bypass Warren, he'll be savaged by his liberal base for days—a huge August distraction from other priorities. It'll be the public option on health care times 10. The White House assertion in 2009 that the votes weren't there in the Senate for a public option didn't satisfy liberals, but at least it had the benefit of being true. The big question for Obama is how he wants his landmark financial bill to be remembered. If he hopes to imprint it on the national consciousness, the choice is clear. Warren would be like Dr. C. Everett Koop as surgeon general or Dr. David Kessler at the FDA—personifying the message and driving change. So far, with the exception of Hillary Clinton, Obama has avoided hiring other big players. The president's not a ball hog on the basketball court, but he's been one on TV. He needs someone like Warren who breaks through. And Warren would make the CFPB the "hot" agency—the people's bureau—which might even help the president restore at least a little faith in the government's ability to look out for average Americans.
I'm fairly confident Obama will make the right call. "You guys are missing the fundamental point," he told staffers in late 2008 when they objected to naming Clinton as secretary of state. "She's the most qualified candidate." So is Elizabeth Warren.
Uncommon Knowledge
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