Warren vs. Geithner, Cont.

Warren vs. Geithner, Cont.

On Friday, we saw a brewing contretemps between Treasury Secretary Tim Geithner and TARP watchdog Elizabeth Warren. Warren, the Harvard Law professor who is a central advocate of the financial reform bill's Consumer Financial Protection Bureau, is seen as a likely nominee to lead the new agency. Reports arose that Geithner opposes Warren's nomination, leading to harsh words from reformers about the administration's commitment to consumer protection. Now, in a TAPPED exclusive, a source friendly to Warren passes on this video of Warren talking about Geithner and consumer protection at conference this weekend put on by the pro-reform Roosevelt Institute:

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Warren defends the administration's record on consumer protection; throughout the legislative process, consumer protection was probably the only portfolio that reformers could count on the administration to aggressively push.

Just as Warren's political allies increased her profile in Washington with stories that she was considering a run in last year's Massachusetts senate election, there is a messaging operation urging the president to appoint her to head the CFPB. Congressional Democrats are well behind the effort and see the likely opposition of the financial sector and Republicans as a benefit to their party; consumer advocates feel that Warren is the most qualified for the job, and though she does not have a extensive management experience, most are confident that experienced deputies can solve that problem -- Warren's big-picture vision and strong communications skills are more important for setting the tone at the new agency.

While stories highlighting a conflict between Warren and Geithner, something of a bete noir on the Left, have increased excitement about her in the progressive base, Warren is trying to push back against the conflict narrative: A widening rift could damage her chances to gain the CFPB job. While Warren has been unhesitant to criticize the administration's policies when she sees them failing American families, the relationships she developed working with the administration on consumer issues will be important if she is tapped to lead the new consumer protection bureau.

After a single anonymous source told the Huffington Post that Tim Geithner is trying to block Elizabeth Warren's potential nomination to head the Consumer Financial Protection Bureau, critics are teeing off on the Treasury Department.

While there is some tension between the two arising from Warren's job overseeing the TARP program, this story is being overblown. For instance, this item tries to catch the White House in some kind of "cleanup" operation resulting from the story, but all those on-the-record quotes complimenting Warren -- from the administration's regulatory point man, Assistant Secretary Michael Barr and White House communications guru David Axelrod -- are commonly expressed by government officials. Regardless of the rumors, keep these two facts in mind:

This isn't Geithner's decision. It's President Obama's call, and more than any other official in government, he's been the driving force behind the administration's consumer push. He's a personal fan of Warren's, and she in turn has good relationships with White House staff. White House officials understand the history-making nature of this appointment and want someone who will leave a mark. Democrats think appointing Warren is good politics.
The Bair Comparison. There have been comparisons between this conflict and Geithner's tensions with FDIC Chair Sheila Bair. For all the attention on that feud, Bair and Geithner have a strong working relationship, and Geithner has been criticized by reformers for supporting Bair's ideas on foreclosure prevention and echoing her concerns about various parts of the financial-reform bill. That doesn't mean that Treasury and the FDIC don't have their disagreements, but the personal aspects of these conflicts are often way overstated and have more to do with people's institutional roles.

Robert Kuttner

The Warren Drama: Another Missed Opportunity?

For the past several days, people who care about whether financial reform is to be real or sham have been following the drama of whether President Obama will name Elizabeth Warren to head the new Consumer Financial Protection Bureau. The Bureau is the best thing about the financial reform bill that Obama will sign later this week, and its prime architect was Warren, a folksy Harvard law professor who has become a well known and admired public figure championing reform.

It's no secret that Treasury Secretary Tim Geithner doesn't want Warren. As Chair of the Congressional Oversight Panel monitoring the Treasury's conduct of the bank bailout under TARP, Warren turned what might have been an obscure and toothless agency into a feisty forum for challenging the Treasury's coddling of the big banks. She did not pull her punches in asking tough questions of the treasury secretary and demanding sometimes embarrassing documents.

Over the past several days, the Treasury has leaked other names being considered for the job, giving the deliberate impression that Warren is just one candidate among many. White House political adviser David Axelrod, given the chance to clearly deny that Geithner was trying to block Warren's appointment, described her as well qualified but his statement was widely taken as faint praise.

All of this infighting and leaking must be amusing to President Obama, the man who ultimately will make the appointment. It was Obama who personally decided that he wanted a strong consumer protection agency in the financial reform bill, partly to offset the perception that the administration was too cozy with Wall Street.

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