Outgoing Senator Chris Dodd (D-Conn.) warned Tuesday that an interim appointment of Elizabeth Warren to head the Consumer Financial Protection Bureau "jeopardizes the existence" of the nascent agency.
The White House is considering naming Warren interim head, as the law establishing the CFPB allows, in order to get her into place immediately and head off a Senate filibuster of her nomination. Once she's in place, Obama could nominate her for the permanent position.
"I'm not enthusiastic about that and I think it'll be met with a lot of opposition," Dodd told reporters after coming off the Senate floor.
Dodd said that an interim appointment would deprive the director of the legitimacy that comes with Senate confirmation. He added that such an appointment could create a backlash that would lead Congress to defund the bureau.
"This is a big job, an important job, and it needs to be -- you've got to build the support for that institutionally or the next Congress - and none of us know what the outcome's going to be politically -- you could gut this before it even gets off the ground. If you don't have someone running it early on, it jeopardizes the existence of the consumer protection bureau," he said. Asked how Congress would gut it, he said: "Money. Take away the money. That's how you always do it."
The CFPB, however, is designed to get its funding stream from the Federal Reserve, not Congress. During the Wall Street reform debate, Dodd argued that funding from the Fed would protect the CFPB from Congressional efforts to defund it. On Tuesday, however, Dodd said that the funding stream could be altered and then killed. "They can change the funding source and kill it," said Dodd. "That can change with an amendment."
Any attempt to alter and then extinguish the CFPB would need to pass both houses of Congress and could be vetoed by the president. Dodd's twin arguments -- that the CFPB needs a director quickly, and that the director should go through the confirmation process -- are in apparent contradiction.
Dodd, who is retiring in January, said that allowing Warren to be named as interim directory wasn't the intent of the law. "For someone to be kind of put in place -- I don't think we had quite this in mind," Dodd said.
On his way on to the floor earlier, Dodd had said he was unfamiliar with the law allowing for an interim appointment. HuffPost asked if it was a House provision that created it. "I've forgotten. I'd have to go back and look," he said.
He denied the suggestion that he was opposed to Warren. "I'm not opposed to the nomination. I've just said, 'Look, send me somebody up who's confirmable'. That's not a radical thought," he said.
Dodd said that whatever the White House decides, it ought to act soon. "I think we're playing games and it's over with and they should decide what to do," he said. If they do pick Warren, he said, "I'll go to bat for them."
UPDATE: Sen. Bernie Sanders (I-Vt.) reached out to HuffPost to take issue with Dodd's position. "I think he is very wrong," Sanders said. "They would need 60 votes to [defeat a filibuster and confirm the nomination]. They would not get 60 votes to do that. The president has the power to make the appointment. We should not be beholden to a Republican filibuster and 60 votes, which is sure defeat. I have a lot of respect and affection for Senator Dodd, but I think he is dead wrong on this issue. What he is really saying is, 'Bring the name forth so she can be defeated.'"
Sanders said that the best move for Obama is to make the interim appointment and then fight for her confirmation later. "I think what the president can do is appoint her on an interim basis, bring forward her nomination for a permanent appointment, and if she doesn't get 60 votes, she stays on as an interim appointment. But what is most important right now at this very difficult moment, is that Elizabeth Warren get that position," he said. "I don't have to tell you that many people who are strong supporters of the president have been disappointed by some of the folks that he has brought in on his financial team. I am very excited and pleased that the President seems to be leaning towards Elizabeth. I think that means a whole lot to millions of Americans who have a lot of respect for the work she has done, her intelligence, and her willingness to stand up to Wall Street greed.