The Weakest Argument Against Cordray's Appointment

January 05, 2012 4:00 pm ET — Walid Zafar

Cato Institute

President Obama's decision to recess appoint former Ohio Attorney General Richard Cordray to head the important Consumer Financial Protection Bureau comes on the heels of an unprecedented campaign by Senate Republicans to block the administration from filling important vacancies. Little of the opposition has come, it should be noted, because Republicans have disagreed with the qualifications of the nominees. In some cases, nominations have been held for almost a year before being confirmed almost unanimously.

The response from Republicans to the Cordray appointment has been swift and almost apoplectic, with House Speaker John Boehner (R-OH) calling the move "extraordinary and entirely unprecedented," and Senate Minority Leader Mitch McConnell (R-KY), saying that the president has "arrogantly circumvented the American people."

Perhaps the craftiest argument against the appointment comes from Mark Calabria of the Cato Institute, who claims that Dodd-Frank is written in a way that mandates the director of the agency must be confirmed by the Senate. "A recess appointment is not a Senate confirmation," Calabria explains:

More importantly the "recess" appointment of Cordray doesn't solve the President's problem.  The Dodd-Frank Act is very clear, even a law professor can probably understand this section, that authorities under the Act remain with the Treasury Secretary until the Director is "confirmed by the Senate".  A recess appointment is not a Senate confirmation.  Now don't ask me why Dodd and Frank included such unusual language, they could have just given the Bureau the new authorities, but they didn't.

The Roosevelt Institute's Mike Konczal observes that Calabria left out something that weakens his point. The section of Dodd-Frank under contention states that the Treasury Secretary will run the agency "until the Director of the Bureau is confirmed by the Senate in accordance with section 1011." What does it say in section 1011? That "the Director shall be appointed by the President, by and with the advice and consent of the Senate." In other words, Dodd-Frank uses the same language from the Constitution that applies to other important administration positions; there is nothing unique about it.

Calabria — and others who will use this argument in the days, weeks and months ahead — is not being honest with himself or his readers. The only positions that would ever be filled by a recess appointment are those that require Senate confirmation to begin with. So in effect, every recess appointment, by definition, goes around the Senate confirmation process.

There is something to be said about the unprecedented nature of this recess appointment. The maneuver the president utilized has rarely been used before, though it has legal support from a Bush-era court decision. As the Atlantic's James Fallows points out, however, "the only thing 'unprecedented' about Obama's use of recess appointments is how rarely he has done it." With Corday's appointment and three others to fill slots on the National Labor Relations Board, the president has made a total of 32 recess appointments. In comparison, Ronald Reagan made 243 over his eight years in office.

So yes, the president is sidestepping Senate Republicans, who have made it clear that they will oppose any and all candidates to head the agency because they don't believe financial institutions should be regulated any more than they were preceding the crash. Since it's hard to publicly argue that consumers shouldn't be protected against exploitative banks, Republicans are left complaining about procedure and the separation of powers.

But Republicans should take some responsibility for bringing about this "unprecedented" step. As U.S. News & World Report's Susan Milligan points out, "preventing the president from putting his own people in senior jobs, absent legitimate questions about the nominee's qualifications, subverts the separation of powers as well."