Fight Over Obama’s Recess Appointments Puts Stranglehold on Key FinReg, Labor Nominees

by Marian Wang ProPublica, Dec. 20, 2011, 2:39 p.m.

It’s no secret that Republicans don’t like the idea of President Obama exercising his power to make recess appointments. As we noted [1] earlier this year, they’ve repeatedly used a procedural move to block the president from making this sort of temporary appointment, even though it’s a presidential power laid out in the Constitution. (Of course, the tactic isn’t specific to Republicans — Democrats used it too under the Bush administration.)

But now, as winter recess approaches, Senate Republicans have been trying a different tactic: holding up other appointments as a bargaining chip [2]. Senate Minority Leader Mitch McConnell has pledged to block the confirmation of three uncontroversial nominees for key banking regulator positions. Here’s how the Wall Street Journal described those nominees and what positions they’d fill:

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.

At the heart of the standoff are fears that President Obama will use recess appointments to fill key vacancies in the new Consumer Financial Protection Bureau — a consumer watchdog agency that the GOP believes has too much power — and the National Labor Relations Board, the government’s independent arbiter of labor disputes.

Earlier this month, Republicans blocked the nomination of former Ohio attorney general Richard Cordray to head of the CFPB, though other Republicans have praised his qualifications [3]. Keeping the agency without a director, as we’ve noted [4], limits its powers over payday lenders, certain mortgage servicers, and other under-regulated parts of the financial industry.

They’ve also asked President Obama not to use recess appointments [5] to fill vacancies on the NLRB, which after December 31st essentially will cease to function because it will have too few members [6] to issue regulations and decide cases.

Republicans have targeted the federal agency [7] for the better part of the year [8], and a group of GOP lawmakers wrote a letter to the president this week, warning that if Obama makes recess appointments to the NLRB, it would set a “dangerous precedent” that could “provoke a constitutional conflict.”

But why that is isn’t exactly clear. President George W. Bush managed to seat more than a half dozen nominees [9] at the NLRB through recess appointments. And overall, President Obama has made somewhat fewer recess appointments than his predecessors — 28 so far, according to a recent Congressional Research Service report [10].