In a bold move, President Obama named Elizabeth Warren as an assistant to the President and special adviser to Treasury Secretary Geithner to avoid Senate confirmation. Warren will be responsible for organizing the new Consumer Financial Protection Bureau, which is scheduled to begin operation July 21, 2011.
Although Warren is not named as the director — that would have required Senate confirmation — she will be, according to the White House, advising the President on “policies and programs that are designed to protect the financial interests of middle-class families.”
An expert on consumer bankruptcy, Warren is determined to protect middle-class Americans seeking credit. The new agency will not only create rules to protect those seeking credit, but it will also have the power to enforce those rules, giving the government a powerful tool in its oversight of the financial sector.
Government oversight is also increasing in other areas affecting the economy and lives of consumers in America. The Pension Benefit Guaranty Corporation Governance Improvement Act seeks to overhaul the Pension Benefit Guaranty Corporation, the government agency that insures private pension plans. Supporters allege that the agency has failed to perform and needs more government oversight and transparency to ensure it operates effectively.
According to the law firm of White & Case, LLP, the government is increasing its oversight of multinational corporations through the Foreign Corrupt Practices Act. In the first quarter of 2009, penalties and fines collected under the Act totaled more than $1.3 billion. The increased oversight will pressure multinational corporations to “review and strengthen their internal compliance programs, to investigate any alleged wrongdoing, and to self-report,” according to George J. Terwilliger III of White & Case, LLP.
Government oversight is not limited to the financial sector. The FDA Food Safety Modernization Act, currently before the Senate, will increase government oversight of food safety dramatically. The Act will increase the oversight powers of the FDA and allow it to prevent food-borne outbreaks, rather than simply reacting to them. Increased inspections of food facilities will be just one of the ways that the Act will allow the FDA more oversight in this area.
We recognize that increased power between the branches of government swings like a pendulum due to changing circumstances (i.e. during wartime, the Executive Branch usurps more power). However, who will reign in government oversight, should it become too powerful? We need government oversight in the private sector to protect Americans, but we also should ensure that someone is acting as a watchdog for these “watchdogs.”
Puzzanghera, Jim. “Obama puts Elizabeth Warren in charge of consumer bureau launch” (latimes.com, 9/18/10)
Brandon, Emily. “New Oversight Proposed for Pension Insurance Agency” (USNews.com 7/30/09)
White & Case, LLP. “Client Alert, March 2009”
Doering, Christopher. “U.S. food safety likely to get overhaul in 2010″ (Thomson Reuters, 11/18/09)