Senator Christopher Dodd warned that a decision to nominate Harvard law professor Elizabeth Warren to head a new consumer agency could produce a protracted confirmation fight.
“What you don’t need to have is an eight-month battle for who the director or the head or chairperson of this new consumer financial protection bureau will be,” Dodd, a Connecticut Democrat and chairman of the Senate Banking Committee, said in an interview on Bloomberg Television’s “Conversations with Judy Woodruff,” to be broadcast today.
While Warren is a “good candidate,” some senators have suggested they won’t vote for her, said Dodd, who helped write the legislation that creates the Bureau of Consumer Financial Protection at the Federal Reserve to police banks for credit-card and mortgage lending abuses.
A leading candidate for the position and a vocal consumer advocate, Warren has drawn opposition from Republicans and financial industry representatives who question whether she has the experience to run a large agency and say her consumer advocacy would make it difficult for her to negotiate fairly.
Dodd said it would be a “huge mistake” to appoint a director over a congressional recess and circumvent consideration by the Senate.
Dodd, 66, also expressed doubt that a commission President Barack Obama appointed to find ways to reduce the nation’s federal budget deficit, projected to average $1 trillion a year for the next decade, will succeed in achieving the president’s goals.
‘Skeptical’ on Commission
“I’m skeptical about it,” Dodd said. While expressing admiration for the panel’s co-chairmen, former White House Chief of Staff Erskine Bowles and former Republican Senator Alan Simpson, Dodd said “I’m doubtful as to whether or not we can produce the results that we need to do.”
Obama created the panel in February to find enough federal budget savings to reduce the deficit to 3 percent of the economy by 2015, from the current 10 percent. That will require $250 billion in savings in 2015 alone, more than what Obama’s health-care overhaul is projected to save over an entire decade.
On the confirmation of three candidates for the Federal Reserve Board, endorsed by his committee last month, Dodd said he planned to act quickly to get Senate approval.
“I’ll get them done,” Dodd said. The nominees include San Francisco Fed President Janet Yellen, Peter Diamond, a Massachusetts Institute of Technology economics professor, and Sarah Bloom Raskin, Maryland’s commissioner of financial regulation.
Dodd also said he plans to hold hearings in September to have financial regulators explain how they plan to carry out the financial-overhaul law, which Obama signed into law last month.
“I can’t legislate competency and I can’t legislate passion about all of this,” Dodd said.
Dodd said the financial crisis contributed to advancing the legislation through Congress.
“In the absence of this crisis, it would have been very hard,” Dodd said.
Dodd said Federal Deposit Insurance Corp. Chairman Sheila Bair, 56, knows the legislation and would have easily won confirmation to lead the consumer agency if she were interested in the job.
He said he urged Bair to pursue it because she has experience running an agency and pressed for foreclosure relief for consumers. Bair didn’t want the job, Dodd said.
Support for Bair
“I did some checking on Sheila Bair and I was going to have very little difficulty getting Sheila Bair confirmed,” said Dodd, whose committee will consider the nomination. “I’d probably confirm her in a couple of days. That’s how strongly people felt, Democrats and Republicans.”
Warren, 61, chairman of the congressional panel overseeing the Troubled Asset Relief Program, is credited with coming up with the idea for the new agency.
Assistant Treasury Secretary Michael Barr is another leading candidate to run the new consumer bureau.
Dodd, who is retiring this year after 30 years in the Senate, said that while the Senate “seems a bit dysfunctional” because of partisanship “we did an awful lot this year,” citing the enactment of the health-care overhaul as well as the financial-services measure.
The “24/7 news cycle” makes it more difficult to legislate because “you can’t utter a phrase without being dissected in 15 different ways,” Dodd said. Political fundraising is also “a huge problem that just devours time” because of the amounts needed to run a campaign, Dodd said.
The lack of socializing between members that allows for development of personal relationships across party lines also hinders compromise, he said.
“People don’t really know each other anywhere near as well as people used to even a decade ago,” he said. Senators “are coming back on Monday nights or Tuesday mornings from their respective states and they’re leaving Thursday night and not showing up again until Tuesday.”
Democrats have sent a “confused message,” Dodd said, three months ahead of the November midterm congressional elections.
Some Democrats have been saying “we haven’t been able to get anything done because of so much obstructionism” by Republicans and “others saying look at what we’ve done,” he said. “We’ve got to start taking credit for what we’ve been able to achieve.”
Dodd said he doesn’t regret not running for re-election.
“I don’t think I would have gotten the financial reform bill done had I been a candidate,” Dodd said. “The time allocation would have been hard and I think every decision I made would have been seen through the prism of a candidate. So I stripped that argument out.”