BLOG VIEW: Come January, Rep. Barney Frank, D-Mass., is getting a demotion. With the Republican Party taking control of the House of Representatives, Frank will be replaced as the chairman of the House Financial Services Committee – most likely by Rep. Spencer Bachus, R-Ala.
Frank survived re-election earlier this month, albeit in an unexpectedly tough contest against Sea Bielat, a Republican businessman and a major in the U.S. Marine Corps Reserves. Frank was clearly caught off-guard by the aggressive and well-financed nature of the Bielat campaign, let alone the fact that someone was challenging him – in the previous three election cycles, Frank didn't even have a Republican opponent. Frank won re-election by a mere 11 percentage points, which offers cold evidence of his vulnerability among voters.
But will Frank be happy in 2011 as a lower-ranking member of the committee where he once swung the gavel – and where he put his name on the 2,300-page legislation that re-upholstered the depth and scope of the financial services industry? One Internet source is planting rumor seeds that insist on a very different future for the 70-year-old Frank.
According to the Reuters blog authored by Christopher Whalen, co-founder of the Torrance, Calif.-based Institutional Risk Analytics, Frank has his eyes on another Washington power seat: the vacant leadership role at the newly formed Consumer Financial Protection Bureau (CFPB). Whalen, quoting an anonymous source within the House Financial Services Committee, claims that Frank will not wish to remain in Congress as part of a minority party. If this source is to be believed, Frank thinks that being the first director of the CFPB ‘could be a more interesting gig’ than, say, being the secretary of the Department of Housing and Urban Development.
The CFPB currently has no one running it, because the Obama administration was afraid it could not muster Senate approval for Elizabeth Warren, former chairwoman of the Congressional Oversight Panel and main force behind the new bureau's creation. Instead, Warren was given a somewhat hazy ‘adviser’ position, in which she is in charge of putting the bureau together without actually having the director's title. Unless President Obama uses a recess appointment to bypass the Senate confirmation route, it will be impossible for Warren to be nominated for this role.
A spokesperson for Frank stated that he had no interest in the CFPB spot. But even if he did, why would Frank subject to himself to the nomination process? If Obama couldn't get Warren approved by a Senate that still has a Democrat majority, can we honestly expect that he would put forward Frank and receive cheerful bipartisan support? Even worse, the still-evolving CFPB is among the least popular federal agencies among the new Republican majority in the House of Representatives. Within the shameless and frequently incomprehensible halls of federal power, the notion of Frank being put forward for approval is absurd.
Also, why would Frank abruptly quit his seat in Congress – especially to run a new bureau that is not going to function as an autonomous entity? If the new Republican majority fails to live up to its major campaign pledges over the next two years, one can easily imagine that the Democrats will have a fairly good shot at regaining the House. After all, the Democrats only had control of the House since 2006 – the increasingly fickle nature of the voting public suggests a future where control of Capitol Hill will seesaw back and forth at a rapid pace.
In the next two years, I expect to see Frank offering his trademark pugnacity in questioning any Republican attempts to strip away at the hallmarks of the Dodd-Frank Act. As for the CFPB leadership, it would make sense for a distinctly noncontroversial individual to be put forward to run that bureau. Frank will clearly be a cheerleader for that new entity, but it is illogical to imagine that he will be the man in charge of running it.
– Phil Hall, editor, Secondary Marketing Executive
(Please address all comments regarding this opinion column to hallp@sme-online.com.)
