Progressives are claiming victory in a confrontation with the White House over a Treasury Department nominee whose work for Wall Street sparked sharp opposition from some in President Obama’s own party.
Financial executive Antonio Weiss has asked Obama not to re-nominate him for the No. 3 position at the Treasury Department, where he would have regulated the financial services industry, as first reported by Politico Monday.
The victory is partially symbolic, however, as Weiss is instead taking another top job at the Treasury Department as counselor to Secretary Jack Lew, which does not require Senate confirmation.
Liberal Democrats, led by Massachusetts Sen. Elizabeth Warren, took on their own president over the nomination, throwing up resistance to confirming the nomination when their party controlled the Senate last year. But with Republicans taking control of the upper chamber this month, many expected that Warren and her allies would be easily outmaneuvered and the nomination would succeed.Instead, Weiss asked Obama not to submit his name for nomination again, a procedural move required by the turning over of a new Congress. “I do not believe that the Treasury Department would be well served by the lengthy confirmation process my renomination would likely entail,” he wrote in a letter to Obama.
The opposition was not just to Weiss – a Lazard executive involved in Burger King’s tax inversion move to Canada – but what he represented as a Wall Street executive potentially taking the helm of a key agency overseeing financial regulation.
The move is a big win for Warren, whose star rose during the confrontation. The senator was able to rally opposition to Weiss not just from reliable progressives like Sens. Al Franken and Bernie Sanders, but Dick Durbin, the Senate’s No. 2 Democrat, and also Joe Manchin, the most conservative Democrat in the upper chamber.
Warren’s vocal opposition to Weiss stood in contrast to her quiet approach with Larry Summers, the former Harvard president whom Obama wanted to name as Federal Reserve chairman. Summers rankled progressives too, but others led the charge and Warren only expressed her opposition to Summers privately and after it became clear that he was hemorrhaging support.
“The risk of another financial crisis remains too high, and we should be strengthening financial reforms, not rolling them back to benefit Wall Street,” Warren said in a statement Monday night.
Others were more eager to celebrate the news. “I have no personal animosity toward Mr. Weiss but I am very glad he withdrew his nomination. The president needs economic advisors who do not come from Wall Street,” said Sanders in a statement.
Franken said he was “troubled” Weiss’ “history working on international corporate mergers and so-called inversion deals,” where corporations move overseas to avoid paying U.S. taxes. “This position requires someone who understands how to make our economy work for the middle class and those aspiring to be in the middle class, and I think Mr. Weiss made the right decision to take himself out of contention,” he added.
Adam Green, the co-founder of the Progressive Change Campaign Committee called Weiss’ withdrawal “a victory for the Elizabeth Warren wing of American politics.”
The head of Democracy for America, which is hoping to draft Warren to run for president in 2016, said “tonight’s victory shows why so many in the Democratic Party are hungry for Elizabeth Warren to run for president.”
“Not only is Senator Warren able to marshal the grassroots energy to achieve what too many in Washington say is impossible, but if she were president Wall Street bankers wouldn’t be at the helm of our economic policy in the first place,” the group’s Executive Director Charles Chamberlain said in a statement.
Murshed Zaheed of CREDO, another liberal group, said, “President Obama did the right thing by listening to the demands of hundreds of thousands of supporters from his progressive base.”
The White House and Lew, however, say they continue to stand by Weiss. “I am disappointed that Antonio will not have the opportunity to serve as Under Secretary, but I understand his request not to be re-nominated,” Lew said in a statement. “I continue to believe that the opposition to his nomination was not justified.”
The one irony for progressives would be if Weiss, in his new role as counselor, ends up with more power than he would have had as Under Secretary for Domestic Finance.