Senate Calls Cease Fire in Nomination Battle
Policy + Politics

Senate Calls Cease Fire in Nomination Battle

REUTERS/Jose Luis Magana

Phew. The latest Senate soap opera  over presidential nominees ended with a bunch of floor speeches, votes and back-slapping.

Until Tuesday morning, it looked like another partisan disaster brewing on Capitol Hill. The Senate appeared ready to resort to desperate measures to get seven nominees by President Obama confirmed, tweaking the rules of the chamber that GOP lawmakers had used to derail the process.
The eventual compromise should manage to get all seven jobs filled, without Senate Minority Leader Harry Reid (D-NV) having to resort to the “nuclear option” to neuter the power of his GOP rivals. But in the context of the larger partisan war about taxes, the budget deficit, Obamacare, and other issues, this agreement is a ceasefire, not a peace treaty.
“The crisis is past—it will be past for a period of time,” Sen. John McCain (R-AZ) told The Fiscal Times. “Now it depends on how we get along, how we address issues and other nominations. Then we’ll see how long it lasts.”


Senate Republicans had threatened to filibuster seven Obama nominees. Their embargo looked unbreakable, since Senate rules require a 60-vote supermajority to stop a filibuster. Hanging in the balance was the proposed leadership for the Environmental Protection Agency, the Consumer Financial Protection Bureau, the Labor Department, the National Labor Relations Board, and the Export-Import Bank.
So Reid put forth the “nuclear option” of changing the rules so that a simple majority of the chamber—just 51 senators—would be needed to end filibusters on executive agency nominees. Senate Minority Leader Mitch McConnell (R-KY) howled about the injustice of that tactic, which he claimed would undermine the deliberative character of the Senate. A closed three-and-a-half hour session on Monday provided a dose of group therapy for senators, but not a solution.


“It helped us to exchange views and ideas,” said McCain, an architect of the eventual agreement. “But the key to it was finally we got to the abyss, staring into the abyss, and deciding to pull back."
The agreement will preserve the supermajority rule and guarantee that these vacant slots are filled, but almost nothing else. Part of the deal hinged on Obama ditching his two nominees for the NLRB, which the White House did. Here is what it agreement means:
The CFPB Gets a Foothold  -  The GOP blockade against Richard Cordray lasted 722 days—and then suddenly vaporized without any of their demands to change the Consumer Financial Protection Bureau being met. It once looked so hopeless that—at the start of last year—Obama named the former Ohio attorney general as the CFPB head in a controversial recess appointment.
When the new congressional session began this year, Cordray again needed Senate approval and faced a Republican gauntlet that was determined to gut the new agency established by the 2010 Dodd-Frank financial reforms.
In a February letter, 43 Senate Republicans demanded that the CFPB be funded through congressional appropriations, instead of the Federal Reserve. They also required that the CFPB be led by a bipartisan board, rather than a sole director. They retreated from those demands on Tuesday, as Cordray cruised toward confirmation with a procedural vote of 71 to 29. By the end of the work day, he received confirmation by a solid 66 to 34.
“Tomorrow there is no longer a question about the legitimacy and future of the Consumer Financial Protection Bureau,” said Sen. Jeff Merkley (D-OR). “Up until now, for two years, since it has been formed, there has been a battle over whether it really would be fully formed and become a part of the executive branch landscape, defending the rights of Americans against predatory practices.”
Cordray should now have a full five-year term to lead the CFPB—keeping him in the post until 2018 as the agency vets the transparency of mortgages, loans, and other forms of credit. This allows him to exercise greater autonomy, the kind that enabled the CFPB last year to charge three credit card firms (Capital One, Discover and American Express) with $425 million in customer refunds, in addition to $111.5 million in civil penalties.
Bart Naylor, a former investigator for the Senate Banking Committee and a financial policy analyst for the advocacy group Public Citizen, described himself as giddy.  “The win is this big: I'm holding my arms out as far as they go--5 feet 11 and two-thirds inches,” Naylor said, adding that he hopes the CFPB continues to be “the hyper energetic teenager it is today.”
The Government Gets To Function  -  A big consequence of congressional gridlock has been executive branch chaos. Major agencies lack permanent leadership, including such critical entities as Customs and Border Protection. The deal relieves this dilemma for the EPA, Labor Department, the National Labor Relations Board, and the Export-Import Bank.
The EPA is finalizing major regulations on power plant emissions to address climate change—a contentious decision that Gina McCarthy (Obama’s nominee) will have to manage.
The NLRB is the subject of a legal battle that will reach the Supreme Court over Obama’s method last year of recess appointments to make an end-run around Senate Republicans. The High Court challenge could undermine more than 1,000 rulings issued by the labor board in the past 18 months.
Unless the Senate acts soon, the five-member NLRB will be rendered virtually inoperable, because it would lack the quorum necessary to hear labor and management cases. NLRB Chairman Mark Gaston Pearce’s term will expire on August 27, which would leave the board with only two sitting members – one short of the three-member quorum needed to operate.
Not a Good Day for the NLRB Nominees Tough break for Sharon Block and Richard Griffin, two of the three sitting members of the National Labor Relations Board. As a condition of the agreement with Republicans, the White House agreed to drop them as nominees for the agency that investigates employment and union practices.
The White House announced on Tuesday two alternative nominees: Nancy Schiffer, an AFL-CIO lawyer, and Kent Hirozawa, who is the chief counsel for the NLRB chairman. As of Tuesday afternoon, AFL-CIO President Richard Trumka’s Twitter feed was silent about the switch.
Future Hazy for Next Slate of Presidential Picks  -  There will be future nomination battles—including for what is probably the toughest post in the global economy: Federal Reserve chairman. This deal applies to only seven government positions, a point stressed to reporters by Reid and McConnell.
“We still will be dealing with controversial nominees in the way that controversial nominees inevitably produce,” McConnell said.
So Rep. Mel Watt (D-NC) will likely remain in limbo as to whether the Senate will approve him to oversee the mortgage giants Fannie Mae and Freddie Mac. As Obama’s pick to run the Federal Housing Finance Agency, the 10-term Democrat is unlikely to get the 60-vote supermajority.
Judicial nominees also face an uphill battle.
Then there is the question of who inherits Ben Bernanke’s seat at the Fed, an inherently controversial job that will involve the winding down of the QE3 stimulus. Dan Clifton, head of policy research for the brokerage firm Strategas, told The Fiscal Times that this means any Fed nominee will likely have to clear that 60-vote threshold, unless Reid eyes the nuclear option for a second time.
“I am not sure a floor fight over the Fed nominee is great for financial markets,” Clifton said. “Which begs the question – has Majority Leader Reid quietly created a new precedent with his actions today? Let a new string of nominees build up and threaten to change the rules again to force Republican action? Should be interesting to see.”