GOP Filibuster Against Cordray Holds

Democrats fell short December 8 in the effort to end the GOP filibuster against the President’s second choice to lead the Consumer Financial Protection Bureau (CFPB), setting the stage for a recess appointment showdown between GOP senators and the White House.

The vote failed 53 to 45 with Sen. Scott P. Brown (R.-Mass.) the lone GOP senator to vote with Democrats and Sen. Olympia J. Snowe (R.-Maine) voting present. Sixty votes are required to end a filibuster.

“I will not take any options off the table when it comes to getting Richard Cordray in as director of the Consumer Finance Protection Board,” said President Barack H. Obama Jr., whose first choice, Elizabeth Warren is running for the Senate against Brown.

“So the bottom line is—you asked about the recess appointment—we’re going to look at all our options,” Obama said. “My hope and expectation is that the Republicans who blocked this nomination come to their senses.”

In the Constitution, a president is empowered to make an appointment to an office that otherwise would require Senate confirmation if the Senate is in recess. The appointment stays in force until the end of the Senate’s next session.

In his March 29, 2010 Congressional Research Service report, “Recess Appointments: Frequently Asked Questions,” Henry B. Hogue wrote that the “three-day rule,” which requires the Senate to be in recess for at least three days for the president to exercise this power is customary and has no basis in law.

A 1993 Department of Justice brief supports the view that a three-day recess is the proper standard, but the department has at different times offered conflicted opinions, he wrote.

Traditionally, each Congress is divided in two sessions for each of the years between the swearing in of newly-elected members.

Many Cordray supporters cite the example of recess appointment by President Theodore Roosevelt.

In “Recess Appointments: An end-around practice,” T.J. Halstead, wrote that Roosevelt announced that in the moment between when the 1903 session expired noon December 7, 1903 and the 1904 session immediately began, there existed a “constructive recess” during which he made more than 160 recess appointments.

Other Cordray supporters are urging Obama to exercise the constitutional authority to adjourn Congress for the purposes of appointing him.

Because of the CFPB’s unique incubation stage, it remains part of the Treasury Department until it has its first director, which is the central reason Republicans unable to stop the creation of the bureau are making a stand against Cordray.

Once the bureau has its first director, it spins off Treasury and becomes a part of the Federal Reserve, and there, is relatively removed from congressional and presidential oversight.

If Obama makes a recess appointment, the next question is whether this appointment, which expires at the end of the next Senate session, and conceivably could then remain empty, is enough to trigger the CFPB’s legal metamorphosis?

Led by Sen. Richard C. Shelby (R.-Al.), 44 other GOP senators signed a May 5 letter to the President pledging to block the appointment of a new CFPB director, including Sen. Dean Heller (R.-Nev.), who December 7 joined the letter, unless Obama worked with them to reform the bureau.

Snowe also signed the letter.

On the day of the cloture vote on the Senate floor, Shelby said there were three simple reforms that would win over the support of his bloc.

The bureau should be led by a board of directors, its funding should be subject to congressional appropriations and there needs to be an effective safety and soundness check for the prudential bank regulators, he said.

The president dismissed any compromise with the Shelby-45: “I know that some of them have made an argument, well, we just want to sort of make some modifications in the law.  Well, they’re free to introduce a bill and get that passed.”

One of the Shelby-45, Sen. Robert Portman (R.-Ohio) was targeted with pressure from both the White House and from his home state, because Cordray is also from the Buckeye State.

The effort continued up until less than 24 hours before the vote as the CFPB’s acting director Raj Date hosted a town hall-style event at Cleveland’s public library.

After voting to support the filibuster, Portman said he opposed the creation of the CFPB and its extraordinary regulatory powers—long before Cordray was nominated—and tried to work with the White House.

“Despite my raising these concerns with the White House, they have been unwilling to engage with me or others to try to address them,” he said.

“This is not about Rich Cordray, who I believe is a good public servant. It is regrettable that the White House has refused to compromise on reforming the CFPB, so he can be confirmed to lead this agency,” he said.

“No other federal regulator has so much authority over personal economic decisions, with so little responsibility to answer to the American people and their elected representatives,” he said.