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The White House
Office of the Press Secretary
For Immediate Release

Press Gaggle by Press Secretary Jay Carney en route Cleveland, OH

11:12 A.M. EST

MR. CARNEY:  Thank you all for joining us on our flight to Cleveland, Ohio, and on this trip.

I'm sure you'll ask me about the President's announcement that he'll be making today in Cleveland that he is appointing Richard Cordray to his position as consumer watchdog for the CFPB.  The President feels very strongly that Americans deserve someone in Washington looking out for their interests in their dealings with financial institutions.  The President nominated Richard Cordray, as you know, nearly six months ago.  He has broad bipartisan support.  He's enormously qualified.  A majority of attorneys general, both Republican and Democrat, support Richard Cordray and his nomination to this position.  He won a majority of votes in the Senate.  And yet the Republicans in the Senate refused to allow him an up or down vote.  He had majority support, I should say, in the Senate.

This is a shame.  And it's a shame because it makes you wonder to defend whose interests why the Republicans -- or how the Republicans refused to allow Richard Cordray to take up his post as America's consumer watchdog. 

The President is absolutely committed to working with Congress this year, as he has in the past, to do everything necessary through the legislative process to grow the economy and create jobs, to protect the middle class.  He'll continue to do that and look for as many opportunities as possible to work with Congress.  But when the Congress refuses to act, the President will act.  Gridlock in Washington is not an excuse for inaction. We cannot wait.  So the President is, today, appointing Richard Cordray during the Senate recess to the post of consumer watchdog at the CFPB. 

Before I take your questions, I just happened to notice in my in-box a wire story about impressive sales results for all the major American automobile companies.  And it just brings a smile to my face because, as you recall, the President took very bold action, very difficult political environment, to ensure that the American automobile industry would survive and thrive.  He demanded that it -- in return for assistance from the American taxpayer, that those companies that received assistance reform themselves, become more competitive, and they have demonstrated with these results the wisdom of the President's decision.

You'll know, I'm sure, and will make note of it as the year progresses the many folks from the Republican Party who opposed that decision and apparently were happy to see the American automobile industry essentially fall into non-existence.

With that, I will take your questions.

Q    Jay, on Cordray, it seems you're walking into -- the President is walking into a legal and political buzz saw here.  Your own administration has conceded that three days is too short a period to qualify as a recess.  Harry Reid has acknowledged that.  Doesn’t that put Cordray in an incredibly weak starting position?

MR. CARNEY:  Not at all.  In fact, the President's counsel has determined that the Senate has been in recess for weeks and will be in recess for weeks.  The Constitution guarantees the President the right, provides the President the right to make appointments during Senate recesses, and the President will use that authority to make this appointment.

Where pro forma sessions are used, as the Senate has done and plans to continue to do, simply as an attempt to prevent the President from exercising his constitutional authority, such pro forma sessions do not interrupt the recess.  And I would note that this is the view of White House counsel.  I would also note that it’s the view of the head of the OLC under the President George W. Bush administration, as well as the Deputy -- I believe the deputy attorney general in the Bush administration on the very same point about pro forma sessions that are designed explicitly simply to prevent the President from exercising his constitutional authority. 

Q    But that’s a legal argument.  Won’t it be challenged by every association that --

MR. CARNEY:  I’m not going to speculate about legal challenges.  The constitutional authority the President has is very clear.  The fact of the matter is the Senate has been in recess and will continue to be in recess.  In the unanimous consent that sent the Senate in recess, it was explicitly stated that the Senate would conduct no business during this period, from December 17th or something until January 23rd.  That sounds like a recess to me, and as a legal matter, it is very much a recess.

Q    Jay, are you prepared for a legal challenge?

MR. CARNEY:  Again, I’m not going to speculate about this -- about possible legal challenges.  The fact of the matter is the President has this constitutional authority; he is exercising it today.  This position is critical for the American people.  It is overwhelmingly supported by the American people.  Richard Cordray has broad bipartisan support. 

The opposition to him, as stated by those who blocked his nomination, is not because of his qualifications but because they oppose the CFPB, the Consumer Financial Protection Bureau.  They oppose -- they seem to think that there wasn’t a problem with oversight in our financial institutions that led to the worst recession since the Great Depression.  That’s an opinion that is not widely shared by the American people, and is certainly not shared by us.

Q    Jay, it seems as if both Republicans and Democrats, and including the President when he was a senator, argue both sides of this issue depending on where their political --

MR. CARNEY:  You’re wrong about Senator Obama.

Q    But he talked about John Bolton as -- when he was --

MR. CARNEY:  His opposition to John Bolton was on the merits.  John Bolton was --

Q    But he said that -- but he also said --

MR. CARNEY:  -- in then Senator Obama’s view, unqualified to be -- to have that appointment --

Q    But after that appointment he also said that his stature would be lessened because it was a recess appointment.  Is there any reason why the American voters would not be --

MR. CARNEY:  In this case, John Bolton was a highly --

Q    -- this entire process?

MR. CARNEY:  John Bolton was a highly controversial nominee whom Senator Obama opposed on the merits, as did many senators.  That is absolutely not the case with Richard Cordray, whom, as I’ve noted, has broad bipartisan support.

Q    Can you talk about how this fits within the campaign of confronting Congress?

MR. CARNEY:  Again, as I just stated, the President is committed to working with Congress.  We actually hope and expect that there will be many opportunities this year to achieve things with Congress on behalf of the American people, specifically to help grow the economy and create jobs.  That would include extending the payroll tax cut as well as unemployment insurance for the full calendar year.  It will include, we hope, taking up other measures of the American Jobs Act that did not pass but which have traditionally received bipartisan support.

I mean, the fact of the matter is, members of Congress -- Republicans, in particular -- we are hoping will make an assessment that it is in their interest to demonstrate to their constituents that they have done something besides obstruct, besides block, besides say no, in order to help the American economy.  That’s what their constituents want.  So we actually think there will be opportunities -- not just the payroll tax cut extension but others -- to work with this Congress.  And the President is eager to do that, as he has demonstrated throughout his tenure in office. 

Separate from that, or in addition to that, when the Congress will not act, when Republicans block important things that need to be done on behalf of the American people, this President will act, because we can’t wait.  And this is very much a part of that approach.  He’s appointing Richard Cordray today because we cannot wait.  The American people cannot wait. 

He will be meeting with a family today prior to his remarks -- or rather with two Ohioans today, elderly Ohioans, who were taken advantage of in their mortgage.  And that kind of abuse is exactly why we need a consumer watchdog.  It’s exactly why we need Richard Cordray in office -- to protect the American consumers.

And financial institutions, the vast majority of which do play by the rules, need someone in place to ensure that those that don't are taken to account, and that consumers are protected from them and from their abusive practices -- payday lenders, non-bank mortgage brokers and the like -- student loan providers.

This is a very important thing that is broadly supported by the American people.  And we simply cannot wait for Congress to act when the Senate Republicans have made clear that they will not confirm anybody because they oppose this Consumer Financial Protection Bureau because they’d rather have Wall Street write its own rules, they’d rather have financial institutions have lax oversight and then everybody can fend for themselves.  That is not the President’s belief.

Q    Jay, did the President weigh the political cost of this, the idea that this may be further poisoning the well for any cooperation with the Republicans going forward?

MR. CARNEY:  The President has been committed, as you know, to taking action where he can, using his executive authority, to help the American people; to help the middle class; to help vulnerable communities like those who can be negatively affected by abusive practices by financial institutions including veterans, including senior citizens, including students.  And he will act when Congress won’t.

But he -- this is not an either/or proposition.  This is a both/and.  He will both work cooperatively with Congress, as he has in the past, to take measures to help grow the economy and create jobs, and he will act when Congress won’t, using his executive authority, working with the private sector, to do everything he can within his authority to help the American people.

Q    Is the President going to make other recess appointments?

MR. CARNEY:  I don't have any information to provide for you on that at this time.

Q    Just a quick question.  Will we hear from Cordray himself today? 

MR. CARNEY:  I don't believe he’s expected to speak.  But he is on board, as you know, right?

Q    Why today and not yesterday?

MR. CARNEY:  I don't have any insight to provide to you about the choice of day --

Q    Isn't there some belief that yesterday he could have done it without the constitutional challenge versus today?

THE PRESIDENT:  Well, again, I'm not a lawyer, and I would hesitate before speculating about that.  What I do know is that the White House counsel is firm in its belief that the President has this constitutional authority to act today while the Senate is in recess.

Q    So he wasn’t just trying to get even more into their face?

MR. CARNEY:  The President is interested in helping the American people, helping the American consumer.  I mean, this is one -- this, to me, is -- and, I believe, to him -- is just a no-brainer.  The opposition to this to my mind is untenable because Americans across the country experienced the negative effects of the worst recession since the Great Depression, the financial crisis, caused in part by some of the bad practices of some financial institutions.

We need this Consumer Financial Protection Bureau fully operational.  And as you know, because of the way the law was written it cannot be fully operational until -- unless and until the consumer watchdog is in place.  And that's why the President took this action.  He wanted the Senate to confirm Mr. Cordray.  Unfortunately, Senate Republicans blocked that nomination -- not on the merits -- prevented it from having an up or down vote, so the President will not wait and he is acting today.

Q    Jay, is the President prepared to deal with Republican reaction to this, including blocking appropriations or any kind of funding that -- I realize that the CFPB is independently funded but --

MR. CARNEY:  Can I just point out to you, it’s an interesting fact here that at this point -- where is it here -- in terms of Republican opposition to recess appointments, slightly ironic.  I will get you the figures, but the number of recess appointments that this President has made as compared to his immediate predecessor at this stage in his presidency is a fraction thereof.  And the fact is it’s within the President’s constitutional authority.  It was exercised by both President George W. Bush and President Clinton.  Both those previous -- both of those predecessors of this President exercised that authority with greater frequency than this President has.  And this is a case where the American consumer, the American people, vulnerable communities within our country, simply cannot wait for the kind of protection that this office provides.

Financial institutions have plenty of people lobbying for them in Washington.  Everybody knows that.  And they're paid well.  Average Americans, senior citizens who could be vulnerable to people taking advantage of them on their mortgages, students who are looking for student loans and could be taken advantage of, veterans returning back now from Iraq and Afghanistan who could be taken advantage of -- they need this protection.  And that protection will not be there unless Richard Cordray is in office.  And that's why the President is acting.

Q    Republicans have specifically asked for some changes with the CFPB.  Were those changes unable to be accomplished?  Or did the President think they were duplicitous?

MR. CARNEY:  Republicans want to water down, weaken or eliminate the CFPB.  That is clear.  They all oppose it.  The would-be nominees of the Republican Party have said they oppose it.  You can hang a lot of window dressing around the simple fact that they do not want the kind of oversight that is absolutely necessary to prevent the sort of financial crisis that's led to the worst recession since the Great Depression.  That is a simple, unadulterated fact. 

And if they want to change the law, going back to working through the legislative process, they ought to propose changing the law.  It is the law.  It passed Congress -- the Senate and the House -- and the President signed it into law.  And the only one who is being harmed by -- who has been harmed by the Republicans’ refusal to allow an up or down vote on this enormously qualified nominee are average Americans who need the protections that the consumer watchdog provides.

Q    How did the President assess Iowa’s results last night?

MR. CARNEY:  I haven’t had a long discussion with him about it.  He didn't really assess them in my brief conversation.  But the results --

Q    Did he make any comments at all?

MR. CARNEY:  I’m struck by how close it was.  But beyond that, I don't have any assessments to provide to you.

Q    Was he happy there’s a deep division?

MR. CARNEY:  Again, I don't have an assessment from the President.  I’m happy to give you my incredibly considered opinions, but you probably don't want them.  (Laughter.)  I have a little experience.  I actually did cover the Republican race in 2008, and I do note -- well, the comparison between the results for somebody who participated in both 2008 and 2012 in Iowa -- interesting.

All right, thanks, a lot.

Q    Thank you, sir.

11:30 A.M. EST