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February 28, 2013 11:20 AM Why Elizabeth Warren Voted for Jack Lew for Treasury

By Samuel Knight

Much to the surprise of very few, Jack Lew was confirmed as Treasury Secretary yesterday. A gifted technocrat with ties to Wall Street—one whose Citibank contract urged him to take a whirl through the revolving door—Lew seems to be the sort of person one would expect to find occupying a cabinet level position. And occupy he does, now. The former White House Chief of Staff, OMB Director and Citibank executive was approved by the Senate after a 71-26 vote. He is now a key regulator, in charge of overseeing an overbearing, outsized and reckless sector—one that he believes doesn’t need significant regulation. Stop. The. Presses. Le plus ça change. You can take the cat out of the jungle. Etc.

What is surprising, however, is that Elizabeth Warren voted for Lew’s nomination, despite staunch opposition from another prominent left wing colleague, Bernie Sanders (the only left-of-center Senator to vote no). Lew seems to be the sort of revolving door passenger that Warren was sent to Washington to oppose.

In the wake of the vote, Warren issued a statement. Here it is in full:

“I am very hopeful that Jack Lew will make a good Treasury Secretary and was pleased to vote for his confirmation. As a former Treasury official, however, I believe it will be critical for him to bring on board people with a variety of backgrounds as he builds his team and helps select other regulators - people with a wide range of housing, consumer advocacy, and market experience. The Administration still has work to do to fix the housing market and reduce the risk of future crises, and I do not believe that putting Wall Street executives in key assistant secretary and regulatory positions is a cure-all for our problems. Wall Street voices add value and expertise - internally and when they are listened to from the outside - but so do others.”

It seems to gloss over a few key issues — mainly those aforementioned.

Whatever the reason for the discrepancy between Warren’s and Sanders’ positions—perhaps seniority played a role, and one more “no” wouldn’t have made a difference—Warren’s vote and statement contrast sharply with her Senate Banking Committee debut and her subsequent tough line of questioning with Ben Bernanke over why the Fed isn’t actually ready to end “Too Big to Fail” banks.

Samuel Knight is a freelance journalist living in DC and a former intern at the Washington Monthly.

Comments

  • andrew on February 28, 2013 11:34 AM:

    Read Mark Kleiman on the Citi bonus. The likely explanation for the bonus being put in writing in advance is to avoid the appearance of conflicts of interest, rather than create them:

    http://www.samefacts.com/2013/02/wayward-press/jack-lews-bonus/

  • Robert on February 28, 2013 11:39 AM:

    It seems the regulators are going to have some serious over-sight for a change...

  • KW on February 28, 2013 11:41 AM:

    The President, no matter the party, has the right to fill his/her cabinet with the people he wants. He won the election. The concept of throwing roadblocks in front of every candidate is simply bad politics. Warren knows this, and may also have exacted a price for her 'yea' vote. Smart. Let the Republicans stomp their feet. Dems must act smarter.

  • troglodyte on February 28, 2013 11:47 AM:

    This is a tell-tale sign that Senator Warren wants to leave the door open a crack for higher office. Voting against Lew would be bluntly symbolic, and she is trying to add wiggle room.

  • Tod Westlake on February 28, 2013 11:50 AM:

    I'm guessing it had more to do with being a team player than anything else. A no vote might have embarrassed the administration. It certainly would have led to a narrative in which Warren is seen as being at-odds with the White House.

  • Anonymous on February 28, 2013 11:59 AM:

    I think Tod has it right. Also, after having voted for Lew, Warren can apply more pressure - I voted for you, and here's what I hope you'll do for the American people. I was surprised other liberal senators voted for him. OTOH, the Dems need to present a united front against the R obstruction.

    I caught part of Sanders' rant on Lew on the Senate floor yesterday. He made so many good points, even on the president. I hope Lew (and Obama) was listening. Yeaaa for Bernie!

  • Peter C on February 28, 2013 12:01 PM:

    Lew's statement, "The problems in the financial industry preceded deregulation," Lew told members of the Senate budget committee in September 2010. He added that he didn't "personally know the extent to which deregulation drove it, but I don't believe that deregulation was the proximate cause." isn't exactly a statement saying that there shouldn't be more regulation of banks. It is just saying that deregulation wasn't the main cause of the collapse. He may well think that bank irresponsibility was the main cause, not the relaxation of regulations.

    I think it is likely that Warren supported Lew because he'd be a good Treasury Secretary. There is technical expertise required in the post, afterall.

  • boatboy_srq on February 28, 2013 12:09 PM:

    This sounds like willingness to take someone at least somewhat qualified so that the post could be filled, and hinting broadly that staff positions would need much higher qualifications and direction - all as an alternative to pushing for someone with less baggage to helm Treasury, who'd make the GOTea scream "We're broke!" faster than they did "Benghazi!" at Hagel and Brennan. If Lew, with all his biz-as-usual industry-friendly history, still earned 25 NOs from the GOTea, imagine what someone better-qualified and less-compromised would have faced.

    At least until the 2014 elections, I think we have to accept that the GOTea, as long as they have a voice in government, are adamantly opposed to the act of governing, and so long as they hold this position we have to content ourselves with whatever progress we can make. A cabinet post got filled, quickly: that's progress of a sort, and in this atmosphere we cannot be wholly dissatisfied with that. Better to have work being done, and at least some of it in the direction we want, than hold out for something better and have the entire GOTea prevent it with their temper tantrums: take a look at the vacant judicial positions - and how long they've been empty - if you have any reservations on that score. Come the election we can use this as one more reason to drive the GOTea from what power it still clings to; but for the moment half-loaves seem to be the best we can manage.

  • bdop4 on February 28, 2013 1:16 PM:

    "It [Lew's statement] is just saying that deregulation wasn't the main cause of the collapse. He may well think that bank irresponsibility was the main cause, not the relaxation of regulations." - Peter C

    I'm sorry, but that's ridiculous. One of the primary purposes of regulation is to limit bank irresponsibility. Does Lew really think that banks will self-regulate in the absence of punitive consequences? If that's the case, then it will be business as usual going forward.

    That said, I agree that Warren is seeking to maintain good relations with the Obama administration and keep a close position where, if needed, she can come down hard on Lew if he appears to be giving banks too long of a leash. His confirmation was in the bag and a no vote would have served no useful purpose.

  • FlipYrWhig on February 28, 2013 2:28 PM:

    Bdop, where are you getting all that? He could think deregulation was A factor but not THE factor, and could even think that more regulation would be helpful but wouldn't have prevented the previous problems even if it had been in place. Someone who says that a ban on semiautomatic weapons wouldn't have prevented all gun tragedies might still support that ban, no?