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Obama's consumer bypass riles Blunt, Kirk

This article first appeared in the St. Louis Beacon, Jan. 4, 2012 - WASHINGTON - Starting off the new year with a bang by confronting congressional Republicans, President Barack Obama on Wednesday bypassed a Senate bottleneck and named Richard Cordray director of the new Consumer Financial Protection Bureau.

His move to install Cordray by "recess appointment" - while Congress is not in full session - set up a possible court challenge and riled a host of Republicans, including Sens. Roy Blunt, R-Mo., and Mark Kirk, R-Ill., who object to the new consumer bureau.

"President Obama's latest power grab is unprecedented and raises serious constitutional questions," Blunt said in a statement. "By using a recess appointment to circumvent Congress, the president is attempting to circumvent the U.S. Senate's constitutional responsibilities in order to enact another unaccountable czar with unlimited power."

But Sen. Dick Durbin, D-Ill., the second-ranking Senate Democrat, said Obama was justified in making the Cordray appointment because GOP senators aimed to cripple the fledgling consumer agency by filibustering his nomination -- despite the fact that Cordray is clearly well qualified for the job.

"After months of delay by Senate Republicans, Cordray's nomination was called and defeated by a filibuster," Durbin said. "Sadly, there were no objections to Cordray's qualifications, only a decision by Senate Republicans to cripple this agency and try to politically punish the president."

Obama, whose political strategists have said he planned to run against a recalcitrant Congress in 2012, made the announcement in Cordray's home city of Cleveland, Ohio. "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.

But Kirk told the Beacon on Wednesday that there are good reasons GOP lawmakers question the "very dangerous precedent" of a Consumer Financial Protection Bureau that is not fully accountable.

"While consumers should be protected, the government should not create an agency that is not accountable to the Congress," said Kirk, noting that the bureau "doesn't even need appropriations from Congress [and] has no need to account for its actions before the elected representatives of the American people."

By rejecting the advice of some Senate leaders who warned about recess appointments, Kirk said Obama may find it will be "difficult to get any other nominee confirmed, based on this highly confrontational tactic. My guess is that Mr. Cordray will serve a very brief time in the U.S. government."

But Obama, who announced Cordray's appointment before 1,300 people at a rally, told the crowd that GOP opposition to a consumer bureau showed that Republicans were more concerned about the interests of Wall Street than those of most Americans.

"In appointing Richard Cordray, President Obama has done what's necessary to ensure American consumers are protected from the tricks and traps of big banks and have the information they need to make sound financial decisions," Durbin said.

"Over the last three years, consumers have lost $17 trillion in household wealth and retirement savings. With today's appointment, the president has put the interests of consumers ahead of partisanship, and the result will be a strong consumer watchdog agency that puts Main Street ahead of Wall Street."

A spokesman for Sen. Claire McCaskill, D-Mo., said Wednesday that she supported the new consumer agency and Cordray.

Obama's move set up a debate about whether a recess appointment can be made when Congress is in a "pro forma session" -- with token appearances by a couple of lawmakers every weekday -- rather that in a strict recess, when neither the House nor the Senate actually meet.

White House spokesman Jay Carney told reporters Wednesday that the White House counsel had advised Obama that he was within his rights in appointing Cordray during a pro-forma session of Congress.

"Where pro forma sessions are used, as the Senate has done and plans to continue to do, simply as an attempt to prevent the president from exercising his constitutional authority, such pro forma sessions do not interrupt the recess," said Carney. "And I would note that this is the view of White House counsel."

Carney said that, at this point in his administration, President George W. Bush had made 61 recess appointments, compared to 28 for Obama.

Democrats at times used "pro forma sessions" in an effort to block such appointments from 2007 until Bush left office.

House Speaker John Boehner, R-Ohio, issued a statement calling the Cordray move "an extraordinary and entirely unprecedented power grab by President Obama that defies centuries of practice and the legal advice of his own Justice Department." He asserted that the precedent "would have a devastating effect on the checks and balances that are enshrined in our Constitution."

Blunt, noting that he and other Senate Republicans had voted to block Cordray's appointment last month, said, "We must address CFPB's lack of transparency and accountability before approving this nominee."

In April, Blunt joined numerous GOP lawmakers in backing a bill that would restructure the consumer bureau by replacing the director with a Senate-confirmed five-person commission and ensure the bureau is subject to the same appropriations process as other federal agencies.

He also joined 44 senators in signing a letter to Obama that detailed concerns about the bureau's lack of transparency or accountability.

Rep. Sam Graves, R-Tarkio, chairman of the House Small Business Committee, said he worried about the bureau's impact on small businesses in Missouri and elsewhere. Said Graves, "Republicans' concerns about the overlapping bureaucracy and broad regulatory authority of the CFPB and its impact on community banks, who had nothing to do with the Wall Street crisis, were valid, especially considering access to capital continues to be a roadblock for many small companies."

But Obama said at the Ohio rally that -- while he would continue trying to work with Congress when feasible -- "I am not going to stand by while a minority in the Senate puts party ideology ahead of the people we were elected to serve."

Rob Koenig is an award-winning journalist and author. He worked at the STL Beacon until 2013.