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Pocahontas And The Deep State

December 11, 2017 Frontpage No Comments

By MIKE MANNO

Until the last few weeks, more people probably knew of the teenaged Indian princess Pocahontas, whom American mythology credits with having saved the life of Captain John Smith in 1607, than knew of the Consumer Financial Protection Bureau. But in a brash and unsuccessful attempt to keep the CFPB under control of the former Obama administration, that all changed overnight.
And, for most people, confusion abounded. But it shouldn’t because it is fairly easy to figure out.
As we all know, the federal government (as well as state and local governments) employs bureaus and agencies to carry out day-to-day activities of government. Most of these agencies are established by an act of Congress (or state legislature, etc.) and are created to carry out a particular function of government. They typically have the ability to draft rules and regulations for their sphere of responsibility that will carry the force of law.
In our government there are essentially two types of these agencies: single executive agencies that are controlled directly by the president, such as a cabinet department; and agencies that are controlled by a panel of executives, sometimes called a board of directors, board of governors, or board of commissioners. While both types of agencies regulate and promote their governmental functions in similar manners, there is a difference between them.
The single executive agencies are controlled directly by the president. The head of the agency can be removed or replaced at whim and the president has the authority to name an acting successor and nominate a permanent successor subject to confirmation by the Senate.
Agencies controlled by a board or commission are considered independent agencies and not subject to direct control by the president. Their commission members are nominated by the president, subject to Senate confirmation for a fixed term in office and cannot be removed except for cause. Their members are usually appointed for staggered terms so that as terms expire, the new president has the option of reappointing or nominating a new commissioner.
Without getting into the weeds, each type of agency ultimately fell under control of the political branches of the government — executive and legislative — and depended on appropriations from Congress to continue its activities.
Anyway, that’s the way it’s supposed to be.
Enter now one Professor Elizabeth Warren, affectionately known as Pocahontas since her high cheekbones led her to believe she was a Cherokee Indian and deserving of special treatment. Now a U.S. senator, Warren bristles at the nickname which was lovingly bestowed on her by her good friend, Donald Trump.
Pocahontas — I mean, of course, Sen. Warren — became an outspoken advocate of strong banking and financial regulations. And while banks and other financial institutions and products are regulated by a myriad of agencies, she proposed a new agency that would crack down on the excesses of banks to prevent them from harming the economy. The idea immediately struck a chord with the Obama administration, which urged Congress to act, which it did.
Originally, it was expected that President Obama would appoint Warren to head the new agency, but Republican senators balked at the idea since they were uncomfortable with her extreme left-leaning beliefs on financial regulations and the structure of the agency was such that the director would be more powerful than nearly all agency heads in the government.
The director, you see, unlike other agency heads, could only be removed for “inefficiency, neglect of duty, or malfeasance in office” and had a budget that came from the Federal Reserve, not subject to congressional approval. In addition, the director was solely able to adopt rules for the financial industry and adjudicate claims against regulated entities and assess fines and penalties.
The powers of the director were so great that the D.C. Circuit Court of Appeals would later write:
“Because the CFPB is an independent agency headed by a single Director and not by a multi-member commission, the Director of the CFPB possesses more unilateral authority — that is, authority to take action on one’s own, subject to no check — than any single commissioner or board member in any other independent agency in the U.S. Government. Indeed…the Director enjoys more unilateral authority than any other officer in any of the three branches of the U.S. Government, other than the President.
“At the same time, the Director of the CFPB possesses enormous power over American business, American consumers, and the overall U.S. economy. The Director unilaterally enforces 19 federal consumer protection statutes, covering everything from home finance to student loans to credit cards to banking practices.
“The Director alone decides what rules to issue; how to enforce, when to enforce, and against whom to enforce the law; and what sanctions and penalties to impose on violators of the law….That combination of power that is massive in scope, concentrated in a single person, and unaccountable to the President triggers the important constitutional question at issue in this case.
“In light of the consistent historical practice under which independent agencies have been headed by multiple commissioners or board members, and in light of the threat to individual liberty posed by a single-Director independent agency, we hold that the CFPB is unconstitutionally structured.”
Since Warren could not receive Senate confirmation, President Obama named Richard Cordray director in January 2012 as a recess appointment. Cordray, a former attorney general and state treasurer of Ohio, was finally approved by the Senate in July of 2013. He suddenly resigned November 24, apparently to begin his campaign for Ohio governor.
But, before resigning, he played a bit of sleight of hand. Citing a provision in the enabling act that “in the absence or unavailability of the Director” the deputy director “shall serve as acting director,” he promoted a close associate of Sen. Warren, Leandra English, as deputy director, replacing the two-year incumbent. Thus upon Cordray’s resignation, English claimed to be acting director until such time that President Trump could get a new director confirmed by the Senate, which, of course, could be delayed many months.
Set one to the Deep State.
But President Trump was up for the game. Since the Federal Vacancies Reform Act of 1998 authorizes the president to appoint acting directors of agencies where Senate confirmation is needed, Mr. Trump quickly served up a CFPB critic, OMB director Mick Mulvaney, as acting director.
The Deep State fought back. English, with the support of Warren and the Democratic leadership of the Senate, filed suit for a declaratory judgment that she was, in fact, the legal acting director of CFPB. Deep-Staters began demonstrating in support of Sen. Warren and thus we found battling acting directors, both of whom claimed authority over the CFPB.
The match, however, went to Mr. Trump when the court ruled in his favor. That won’t end the story, though. The Deep State is still active and has the support of vast numbers of officeholders, federal employees, and average citizens. But, one thing this will allow the Trump administration to do is to re-evaluate the structure and the necessity of the CFPB. And my guess is that as soon as a permanent director is nominated and confirmed, Trump will take a serious look as how the CFPB fits into his economic plan.
Yet the true moral of the story is the extent to which the Deep State — those holdovers from the Obama administration and progressives protected by Civil Service still imbedded in government employment — will go to disrupt the policies of the Trump administration. Watchfulness on the part of all citizens is required.
Oh, by the way, getting back to the real Pocahontas: First Lady Edith Wilson (you all remember Woodrow’s wife), singer Wayne Newton, Admiral Richard E. Byrd, and Former Virginia Gov. and Sen. Harry Byrd are all descendants of the Indian princess. We’ll double check — maybe Elizabeth Warren is too?

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