Kuttner on TAP: The Indispensable Senator

Last week, the Massachusetts senator noticed that the bipartisan FAA bill that emerged from the Senate Commerce Committee had deliberately and underhandedly reversed Transportation Secretary Pete Buttigieg’s order that passengers are entitled to automatic refunds when flights are canceled or seriously delayed, without going through a confusing bureaucratic paper chase devised by the airlines. It was the airlines, of course, that were behind the stealth change.

Warren went into high gear, working Committee chair Maria Cantwell, enlisting Republican Josh Hawley as an ally, going public on social media, and working closely with the White House to save the original rule. When the final bill was unveiled, it had restored the Buttigieg provision, and the bill sailed through the Senate. “Thanks to the partnership of Senator Warren and a bipartisan coalition of senators, the president’s pro-consumer policies on automatic refunds has been written into law,” Jeff Zients, the White House chief of staff who worked with Warren on the change, said in a statement.

Yesterday, the Supreme Court, in a 7-2 decision written by Clarence Thomas, no less, held that the financing mechanism of the Consumer Financial Protection Bureau is constitutional. Both the Bureau and its funding system were the creation of former law professor Warren, who came up with the idea of nesting the CFPB in the Federal Reserve, which is self-funded and doesn’t rely on annual appropriations from Congress.

This insulates the CFPB from political pressures. If its funding mechanism is unconstitutional, so is the Fed’s. The Court decided not to go there.

It was vintage Warren. After the decision came down, Warren hustled over to the Court steps and, summoning up all of her senatorial dignity, said, “Woo-Hoo!”

Also this week, Warren resolved to help save Martin Gruenberg, the beleaguered chair of the FDIC. She has apparently succeeded, though the rest is up to Gruenberg.

As readers will recall, Gruenberg’s job has been hanging by a thread due to a scathing report on pervasive sexual harassment at the FDIC going back decades. Gruenberg is not accused of misconduct himself, only of failing to address the problem despite a 2020 report of the inspector general calling for reform.

Republicans on the House and Senate banking committees have called on Gruenberg to resign. If he does, a Republican becomes acting FDIC chair, and any kind of progressive financial regulation is dead for the rest of the year. Gruenberg’s Republican predecessor as FDIC chair, Jelena McWilliams, had three years to address the sexual harassment mess and did nothing.

At House and Senate committee hearings this week, many Democrats were equivocal in defending Gruenberg and calling out the Republican hypocrisy. Gruenberg did about as well as he could. One reason was that two senior Warren people, Dan Geldon, her former chief of staff, and CFPB director Rohit Chopra, helped Gruenberg prepare for the hearings.

Warren herself, at Wednesday’s hearing of the Senate Banking Committee, put some steel in the spines of her Democratic colleagues. “Your resignation would do nothing to improve the culture of the FDIC,” she said to Gruenberg. “But it would give Republicans a veto over bank policy,” Warren said.

In her spare time, Warren found time to push officials to be more aggressive in going after Steward Health Care, the corrupt company that bought hospitals, looted them, and then declared bankruptcy. “Steward Health Care’s bankruptcy is a direct consequence of Wall Street private equity vultures looting our health care system,” she said last week, in announcing that she is working on legislation that would effectively get private equity out of the health care sector entirely.

WHAT MAKES WARREN THE INDISPENSABLE PROGRESSIVE is, first, that she understands capitalism better than any other member of the Senate. She got that from her longtime work as one of the nation’s leading experts on bankruptcy, followed by her stint chairing the Congressional Oversight Panel on the bailout of the nation’s biggest banks after the 2008 financial collapse, coupled with her own core values.

But that’s only the beginning. As a senator, Warren is superb at playing both an inside game and an outside game, calling out abuses of capitalism in ways that move and educate public opinion, being a Biden loyalist while pushing him to do more, salting allies in key agency positions, and time after time finding ways to co-sponsor measures with Republicans. It helps that she is a thoroughly nice person as well as a political tiger.

Critics who dismiss Warren as a hectoring schoolmarm don’t have a clue about what makes her so effective. And did I mention that she is incorruptible?