Obama bypassing Senate to appoint Richard Cordray consumer chief

Reporting from Washington —  President Obama will appoint former Ohio Atty. Gen. Richard Cordray on Wednesday to be the first director of the new Consumer Financial Protection Agency, making a controversial decision to install Cordray while the Senate is in brief recess to avoid Republican opposition, according to a White House official.

Obama’s move, to be announced during a visit to Ohio, is likely to be challenged in court as he will be the first president in more than two decades to make such a so-called recess appointment during a Senate break of less than three days.

The move is sure to infuriate Senate Republicans, who have been near unanimous in blocking Cordray’s appointment. It also will anger many in the financial services industry, who strongly opposed creation of the agency.

House Speaker John A. Boehner (R-Ohio) blasted Obama’s move as “an extraordinary and entirely unprecedented power grab.” Senate Minority Leader Mitch McConnell (R-Ky.) said Obama had “arrogantly circumvented the American people” by breaking with long-standing precedent on recess appointments.

Congressional Republicans have been forcing the Senate into pro forma sessions every three days throughout the holidays to prevent Obama from making recess appointments. Nearly all Senate Republicans have been blocking Cordray’s nomination because they want to weaken the authority of the new consumer agency, which was the centerpiece of the 2010 financial reform law.

Under that law, the agency cannot exercise broad new consumer protection authority until a Senate-confirmed director is in place. The agency formally opened in July and took over existing consumer protection authority over banks from other regulators. But under its acting director, the agency has not been able to use new powers to oversee financial firms outside the banking system, such as mortgage brokers and payday lenders.

Liberal groups have been pushing Obama to appoint Cordray through a recess appointment, which would allow him to direct the agency until the the end of 2013. But with many other Obama nominees blocked by Senate Republicans, the GOP-majority in the House has prevented Congress from technically recessing for more than three days at a time.

While the Constitution gives the president the authority to fill executive branch vacancies when the Senate is in recess, a Justice Department opinion in 1993 implied that a recess of more than three days was needed before the president could exercise the power, according to the nonpartisan Congressional Research Service. No such appointments have been made during recesses of fewer than 10 days over the last 20 years, the service said in a December report.

But there is precedent for appointments made during recesses of fewer than three days — President Theodore Roosevelt made more than 160 recess appointments during a Senate break of less than a day in 1903.

Obama decided to push the legal envelope to get Cordray in place. The move will highlight the administration’s more combative approach to Republican opposition in Congress and Obama will announce it during a visit to a Cleveland suburb Wednesday in Cordray’s home state.

Sen. Sherrod Brown (D-Ohio), who has been a strong supporter of Cordray, applauded Obama’s move.

“We asked for a fair up or down vote on Richard Cordray’s nomination,” Brown said. “But too many senators are willing to stand instead with Wall Street, blocking a qualified nominee for the first time in the history of the Senate based on opposition to an agency’s very existence.”

The recess appointment upends a gentlemen’s agreement in the Senate that has provided an uneasy detente in the face of GOP opposition to Obama’s nominees.

By refusing to allow Congress to adjourn, Republicans have been able to prevent recess — and recess appointments. The Senate and House have met every few days in pro forma sessions that last a matter of minutes.

Democrats, under Majority Leader Harry Reid of Nevada, used the same strategy on occasion when President George W. Bush was in power.

But the Republicans have used the strategy throughout 2011 as the procedural arms race has escalated in the face of GOP opposition.

Obama’s decision to bypass the procedural hurdle is certain to inflame already strained relations between the White House and congressional Republicans in the new year.

“This recess appointment represents a sharp departure from a long-standing precedent that has limited the president to recess appointments only when the Senate is in a recess of 10 days or longer,” McConnell said. “Breaking from this precedent lands this appointee in uncertain legal territory, threatens the confirmation process and fundamentally endangers the Congress’ role in providing a check on the excesses of the executive branch.”

[For the record, 10:50 a.m. Jan. 4: An earlier version of this post said Richard Cordray could direct the agency until the end of 2012 under the recess appointment. In fact, the recess appointment would last until the end of 2013, unless his nomination is confirmed by the Senate for the full five-year term, or another director is appointed through a recess appointment or confirmed by the Senate to a full-term.]