The recess appointment fight nominally only concerns Richard Cordray, the nominee to run the Consumer Financial Protection Bureau. Republicans want to block his confirmation because they stop the agency from gaining regulatory powers over non-bank financial institutions if they remain without a director. So they’re using the nomination fight as a proxy to force changes to the agency. A recess appointment would upset that, so they’re trying to block that, both procedurally and through the media.
But a number of other nominees are caught in the crossfire of this fight, in particular nominees to lead other key financial industry regulators:
The stalemate prevented the Senate from approving nominees to lead two bank regulators: the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency. The FDIC insures deposits of up to $250,000, manages failed banks and is the primary federal overseer of state-regulated banks. The OCC regulates national banks and savings associations.
The three nominees–Martin Gruenberg, Thomas Hoenig and Thomas Curry–would be charged with implementing last year’s Dodd-Frank financial-overhaul law, which imposes a raft of restrictions on the financial industry. They are expected to take a tough line on the nation’s largest banks, in a climate where both political parties are increasingly embracing to efforts to rein in the power of the nation’s largest financial institutions.
All three of Mr. Obama’s nominees have long histories as regulators and there was little controversy at their confirmation hearings.
I’m sure that Republicans aren’t entirely broken up over this turn of events. The FDIC has been one of the main agencies actually doing its job during the financial crisis, so putting them in a bad organizational position sounds like an end goal for Republicans. And the current head of the OCC, John Walsh, came in with the Bush regime and is practically a banker running the key bank regulator. The nominees in question would be a step up over the status quo, so of course Republicans don’t really want them in place. [cont’d.]
The situation is far worse with respect to the National Labor Relations Board. The five-member board needs three members to have a quorum to deliver rulings. At the end of the year, Craig Becker’s term – granted through a recess appointment – expires, which would leave only two left on the board. That would essentially disable its operations entirely.
UNLESS something changes in Washington, American workers will, on New Year’s Day, effectively lose their right to be represented by a union […] Without a quorum, the Supreme Court ruled last year, the board cannot decide cases.
What would this mean?
Workers illegally fired for union organizing won’t be reinstated with back pay. Employers will be able to get away with interfering with union elections. Perhaps most important, employers won’t have to recognize unions despite a majority vote by workers. Without the board to enforce labor law, most companies will not voluntarily deal with unions.
The author, a former Democratic Chairman of the NLRB under Bill Clinton, criticized Obama for “trying to install partisan stalwarts on the board,” guaranteeing a further impasse. But this neglects that Republicans can get what they want – a virtual end to labor organizing – simply by doing nothing, no matter what anti-union lackey would get the nod to run the board.
So the appointment fight is much bigger than just CFPB. And the President will not resolve it unless he makes Republicans pay a price for their obstruction. Nominees recess-appointed now would serve through the rest of the President’s term. Mitch McConnell has yelled and screamed about prior recess appointments, only to eventually move back to an equilibrium on the less controversial nominees. This should be an election issue, to highlight the ridiculous obstructionism at work. But it requires some fighting back.