Elizabeth Warren faces a House Financial Services Subcommittee today. The hearing is called “Who’s Watching the Watchmen? Oversight of the Consumer Protection Bureau.” It’s chaired by Rep. Patrick McHenry (R-NC), one of the more ideological conservatives in Congress, who has been at the forefront of the move to gut the CFPB before it gets off the ground. And in his opening remarks today, he basically accused Warren of lying.

In that same appearance, Professor Warren testified that the bureau’s role in ongoing mortgage settlement negotiations was limited to “advice.” Since her testimony, however, Congress received evidence that Professor Warren and the bureau were deeply involved in the negotiations. The emergence of the bureau’s “Settlement Presentation,” and the fact that Professor Warren has been in dozens of meetings with federal and state officials about these settlements raises concerns about the veracity of her testimony.

This hearing, however, is not a confirmation hearing for Professor Warren. This hearing is about the mission, policy, and structure that affect the creation and implementation of the bureau. It is also about the need for critical oversight of an agency which has so vast oversight authority over large portions of the American economy. Simply stated, who’s watching the watchmen?

We’ve been over this. Somehow, McHenry thinks that giving advice to the global settlement efforts of state AG is not consistent with Warren’s insistence that her bureau was giving advice. It’s a willful misreading of her comments in an attempt to gin up controversy. And clearly, he’s setting up a point of attack over Warren should she be appointed to head the agency, that she lied to Congress. It’s a serious charge backed up by nothing.

Some Democrats agree with McHenry that Warren should not be named as the head of the CFPB. They want her to run for Senate in Massachusetts instead.

Officials in the Democratic Party are wooing Elizabeth Warren to run for the Senate against the Massachusetts Republican Scott P. Brown rather than have her continue to set up the new Consumer Financial Protection Bureau.

Ms. Warren has become a lightning rod for controversy over the new agency, which she conceived and is helping create. Consumer groups and some Democrats have demanded her appointment as its first director. A group of 44 Senate Republicans, with applause from the financial industry, has promised to block any nominee.

In seeking to enlist Ms. Warren for a different campaign, Democrats are taking aim at two birds. They can lay the groundwork for a potential compromise over a different candidate to lead the new agency and, they hope, they can increase their chances of reclaiming Mr. Brown’s seat by sending against him a woman who has won considerable acclaim and popularity among liberals for taking on the financial industry.

Basically there’s a “Draft Elizabeth Warren” campaign on Daily Kos and some unnamed officials “urging” a run, although Harry Reid has apparently talked to Warren about running. It’s pretty clear that Warren would have more authority over her biggest concern, the safety of consumers in financial transactions, at CFPB. If she runs for Senate, it’s a safe way to take her out of the running for that position, with no guarantee that she’ll actually beat Scott Brown and win in 2012.

I think it would make more sense to keep Warren with her core competency at this point. The pressure on the White House to recess appoint her is having an impact. Nobody else has a better shot at fending off attacks to the agency. She should keep at it.

UPDATE: Strong defense from Rep. John Yarmuth (D-KY), basically telling Warren that Republicans are afraid of her: