Lawmakers, Experts Spar Over CFPB Recess Appointment

WASHINGTON — Lawmakers, constitutional experts and industry lawyers squared off Wednesday at a hearing probing whether President Obama had the right to make several controversial recess appointments last month.

On Jan. 4, Obama appointed Richard Cordray director of the Consumer Financial Protection Bureau, and installed three members of the National Labor Relations Board, even though the Senate was still in "pro forma" session. The White House has said these sessions, during which the Senate meets roughly every three days for only a few minutes, are a gimmick designed to prevent him from exercising his constitutional authority.

House Oversight Committee Chairman Darrell Issa, echoing complaints from Republicans and industry groups over the past four weeks, called the move an unprecedented political power play.

"At the very least it creates (an) uncertain environment, and significant risk, by his own attorneys' writings," Issa said, referring to the memo from the Justice Department's Office of Legal Counsel that indicated the appointments could be challenged in court.

Issa and other Republicans also pressed the witnesses for their views on the House's role in the process, saying that the Senate can only go into recess if the House gives its permission — something the House's Republican leadership did not do.

"The Senate may not act to be in recess to the exclusion of the other body," Issa said.

Sen. Mike Lee, R-Utah, a former appellate and Supreme Court clerk who testified as the hearing's first witness, supported his party's majority view.

"The answer can't simply be that the president decides on his own accord when the Senate is in recess," he said.

But Democrats used the hearing to highlight what they called another unprecedented action: the obstruction by Senate Republicans to block the confirmation process.

"Nowhere does the Constitution allow senators to block all nominees … because they object to the current law of the land, and do not have the votes to change it," said Rep. Elijah Cummings, the panel's top Democrat.

In such circumstances, the president has the authority to consider the circumstances and use his judgment to defend his own prerogatives and, in the case of the CFPB, to fulfill his obligation to implement the law, said Michael Gerhart, a constitutional law professor at the University of North Carolina School of Law. Courts are generally reluctant to interfere with the president's exercise of judgment, he said.

"All of this leads me to think that the president's case here is a sound one and a credible one," Gerhart said, adding that it's highly unlikely that the appointments will be overturned.

Lee argued that, under the Constitution, the Senate also has the prerogative to advise and offer consent on presidential appointments. Although he has voted in favor of many of the president's appointees, Lee said that changes now.

"My responsibility to that and my duty to the Constitution I think requires me to stand up for these Constitutional prerogatives and show the president that unless or until he rescinds the unconstitutional appointments… he's not going to enjoy the complete degree of cooperation that he's had," he said.

On Tuesday, Lee's Senate colleague Rand Paul, R-Ky., said he would file an amicus brief supporting a lawsuit filed by the National Right to Work Foundation, the National Federation of Independent Business and others challenging the NLRB appointments.

Andrew J. Pincus, a partner with the law firm Mayer Brown who testified on behalf of the U.S. Chamber of Commerce, said the questions surrounding the CFPB appointment could lead to a prolonged period of uncertainty. In the meantime, any decisions or regulations the bureau issues could ultimately be reversed if the appointment is overturned, causing businesses to overhaul their operations to regain compliance with the old rules, he said.

"That means unjust and excessive costs, and that's money of course that businesses could have used to create new jobs, to expand their operations, something that our economy needs," Pincus said. "So the overall effect of the recess appointment is to put at risk significant consumer protection actions that would have rested on firm authority."

David Rivkin, a partner at Baker Hostetler, said the recess appointments have significant constitutional implications, most importantly, the question of whether Congress has the scope of power to determine the rules of its own proceedings.

"There's a great deal at stake here," Rivkin said. "And we're talking about probably the greatest aggrandizement of presidential power in American history."