Jacquelyn Martin / AP file
Will Americans believe President Barack Obama was fighting for their consumer rights by trying to force a vote on Consumer Financial Protection Bureau nominee Richard Cordray, or will they believe Senate Republicans were fighting to prevent creation of an unwieldy new government agency with unchecked powers?
We're about to find out.
Thursday morning brought congressional theatre that ended with the Senate effectively rejecting Obama's nominee to head the newly formed Consumer Financial Protection Bureau. There was little mystery to the vote -- 44 Republicans pledged in May to block his nomination, and only 41 were needed to spike it. The final tally was 53-45, with Republican Olympia Snowe of Maine voting "present." Sen. Scott Brown of Massachusetts, facing the bureau's inventor Elizabeth Warren, was the lone dissenting GOP vote.
The only mystery is, who will Americans blame now?
Obama and Democrats spent the week campaigning for Cordray in several states where Republican Senators face re-election campaigns, including Maine and Nevada. Senate Republican minority leader Mitch McConnell of Kentucky responded by accusing Obama of playing politics.
“Now he’s suddenly making a push to confirm his nominee — because it fits into some picture he wants to paint about who the good guys and the bad guys are in Washington,” McConnell said on the Senate floor Tuesday. “... So once again he's going to use the Senate floor this week to stage a little political theater. He’s setting up a vote he knows will fail so he can show up afterward and say he’s shocked.”
Speaking in Kansas on Tuesday, Obama argued that Republicans are simply being obstinate.
"Nobody claims (Cordray's) not qualified,” he said in a speech about the economy. “But the Republicans in the Senate refuse to confirm him for the job; they refuse to let him do his job. Why? Does anybody here think that the problem that led to our financial crisis was too much oversight of mortgage lenders or debt collectors?”
Political considerations aren't far behind, however, as White House Press Secretary Jay Carney said Republicans who vote against Cordray will have to "to explain to their constituents why they did not support common sense reforms," according to the Wall Street Journal.
As a practical matter, Thursday's cloture vote prevented Democrats from ending debate on the Cordray nomination, thus preventing an actual vote on his nomination. It doesn't mean Cordray has no shot to run the agency, however. The administration could still attempt a recess appointment, and some observers speculate that the Senate vote is merely a step along that path.
Such a move could threaten the legitimacy of the entire agency, however, and would undoubtedly lead to accusations foul play from Republicans, and perhaps trigger litigation from banks the agency would try to regulate.
But without a director, the bureau is already hamstrung on a number of fronts. Many of the bureau's regulatory powers don't kick in until a director is named. It can't supervise so-called non-bank banks, like payday lenders, for example.
“The list of financial tricks and traps that consumers are forced to deal with keeps growing,” said Travis Plunkett, legislative director of the Consumer Federation of America, an advocacy group. “Fourteen months after Congress created the CFPB, the agency needs a permanent leader so it is not fighting financial abuses with one arm tied behind its back.”
The nascent bureau has begun to take on some less controversial tasks during this start-up phase. Last week it announced results of a story of credit card complaints; this week it released a new, simplified model credit card agreement that cuts down verbiage from 5,000 to 1,100 words.
Still, Republicans held firm, because they say the new consumer bureau would have too much power as currently constructed. Sen. Richard Shelby, R-Ala., the ranking Republican on the Senate Banking committee, went so far as to call it "a monster, as far as future regulation."
Five Republican Senators, including moderate Susan Collins of Maine, attended a public event on Tuesday to reiterate their view that the bureau shouldn't fully open for business unless dramatic changes are made.
“It is inconceivable that in this time of tight budgets that we would create a new agency that is completely unaccountable in terms of its budget,” Collins said.
Among their demands: the bureau should be led by a commission, not an individual; it should be not have its own source of funding from the Federal Reserve; and it should be subject to Senate committee oversight.
So far, Democrats haven't budged on any of those demands -- setting up a fight over public opinion that Obama didn't shy away from at his speech in Kansas,
"Every day we go without a consumer watchdog is another day when a student, or a senior citizen, or a member of our armed forces … could be tricked into a loan that they can't afford -- something that happens all the time," he said. "And the fact is that financial institutions have plenty of lobbyists looking out for their interests. Consumers deserve to have someone whose job it is to look out for them. And I intend to make sure they do. And I want you to hear me, Kansas: I will veto any effort to delay or defund or dismantle the new rules that we put in place."