Heads Republicans win, tails consumers lose
Wonkbook: By Ezra Klein
Posted at 08:01 AM ET, 06/10/2011
washingtonpost.com
A week ago, Nobel-prize winner Peter Diamond withdrew his nomination to the Federal Reserve’s Board of Governors. Republicans had blocked him for being unqualified, perhaps because the Nobel laureate had not also completed Hercules’ 12-feats of strength. That took one high-profile Obama nominee off the board. But it left the highest-profile candidate still in limbo. What about Elizabeth Warren, who bankers seemed to be warming to, even if Republican congressmen weren’t getting along with her?
Turns out “what about Elizabeth Warren?” is the wrong question. “It’s not Elizabeth Warren-specific,” Mitch McConnell spokesman Donald Stewart explained. “It’s any nominee.” As Ylan Mui reports today, the Republicans have vowed to block any nominee to the Consumer Financial Protection Bureau. Why? They simply don’t like the agency. Instead, they want it overseen by a commission rather than a director, they want more control over its funding and tougher oversight over its activities. They want it, in other words, leased and weakened. One might observe that if the GOP had been as interested in reining in Wall Street as they are in reining in the consumer-protection agency, we might be living in a very different economy today. But as the old saying goes, there’s no use crying over nine percent unemployment.
It’s rare for parties to attempt root-and-branch reform of an agency from the minority position. Republicans don’t hold the Senate or the White House. They cannot vote their changes into law. So instead, they’re taking the agency’s leadership hostage, threatening to withhold stability and staffing from the Consumer Financial Protection Bureau unless the Obama administration gives into their demands. The Obama administration is not going to sign off on these demands, of course. But perhaps that’s not the point. The Bureau’s scheduled launch date is July 21st. And as Mui explains, “if no director is named by then, the fledgling agency will have limited ability to write new rules or supervise certain financial firms that are not banks, such as payday lenders.” The point of the changes the Republicans want to make is that they’ll substantially weaken the agency. Refusing to approve any and all candidates for director of the agency will do the same thing. Heads Republicans win, tails consumers lose. |
