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Obama Sets Precedent on Regulatory Policy

Posted 05 January 2012 | By

In a controversial move, US President Barack Obama yesterday appointed Richard Cordray as the director of the newly formed Consumer Financial Protection Bureau.

While the legality of the move is likely to be subject to intense political, legal-and even constitutional-scrutiny, it has also likely set a regulatory precedent as well, notes Slate columnist Matthew Yglesias.

"It's worth noting that the basic GOP method here, if successful, could have wide-ranging impacts on American regulatory policy," Yglesias writes. "There are presumably any number of existing federal statutes that congressional Republicans would favor changing in various ways."

Yglesias goes on to note that a congressional environment that establishes this as a normal behavior could hold up virtually any current or future administration appointee unless regulatory demands are met. 

This could, for example, hold up a US Food and Drug Administration Commissioner unless he or she acquiesced to demands to revoke marketing authorization for abortifacient drugs or adopted measures to implement cost effectiveness assessments in the approvals process.

The President used a common constitutional procedure known informally as a recess appointment-used when the Congress is out of session to appoint people to positions that ordinarily require Senate approval-to appoint Cordray while the Congress was technically in a pro forma session.

Senators have traditionally defied presidential attempts to make recess appointments by convening the pro forma sessions every three days. But in a reversal of precedence, White House legal experts determined that this strategy was irrelevant to the President's ability to appoint officials while the congress is in de facto recess.

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