Forum Center, 1/17/12

Obama Uses Recess Appointment to Bypass Congress on Cordray

On January 4th, President Obama named Richard Cordray director of the Consumer Financial Protection Bureau (CPFB). Using an appointment process known as a “recess appointment,” one made while Congress is in recess, Obama appointed Cordray to the post.  He used the “recess appointment” because Republican senators had blocked confirmation of Cordray, a Democrat and the former Ohio Attorney General.  Republicans stated that they didn’t object to Cordray, but to how the CPFB, an off-spring of the Dodd-Frank reform bill, is organized. They cite, for example, concerns about its financing, which comes from the Federal Reserve meaning Congress can’t exert pressure on the agency by controlling its budget.

Recess appointments are not a new phenomenon. Although this type of recess appointment is a common action for presidents, Cordray’s appointment has created uproar because the Senate was technically still in session. The GOP senators, in an attempt to block any Obama “recess appointments”, had been holding pro-forma sessions (sessions where the Senate is called into session, but no real work is done). Senate Democrats used the same tactic numerous times during President Bush’s administration.

Traditionally, a president could only make “recess appointments” when the Senate was recessed for 10 or more days. The Republicans were attempting to block the appointment by holding sessions every third day. Cordray’s is the first such appointment during a Senate break of fewer than three days since 1949.

Republicans and their allies who oppose the CPFB say Cordray’s appointment is illegal. The U.S. Chamber of Commerce is considering whether or not to bring a lawsuit over Cordray’s appointment. The issue is shaping up to become a constitutional fight over the separation of powers between the legislative and executive branches. At issue is whether the president can say when Congress is or isn’t in session.  The Republican Senate Minority Leader stated that “breaking from this precedent lands this appointee in uncertain legal territory, threatens the confirmation process and fundamentally endangers the Congress’s role in providing a check on the excesses of the executive branch.”

There is another possible obstacle to this appointment. Even if Cordray’s appointment is legal, having not been confirmed by the Senate may limit the powers he has as the agency’s leader. The Dodd-Frank reform bill, says it can’t begin operations until after its head is confirmed by the Senate. It will be up to the courts to decide whether that language would prohibit Cordray from starting up the watchdog organization.

Forum Question of the Week:

Was the “recess appointment” by President Obama of former Ohio Attorney General Richard Cordray to the Consumer Financial Protection Bureau legal?

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