Obama to buck Congress, appoint consumer watchdog

WASHINGTON, January  4, 2012 (AFP) - President Barack Obama will bypass Congress and appoint the head of a new US consumer watchdog, setting up an election-year legal showdown with Republicans, a senior official said Wednesday.

Obama plans to make Richard Cordray acting head of the Consumer Financial Protection Bureau (CFPB) despite questions over the president's power to do so after the former Ohio official failed to win Senate approval.

Obama aims to use a maneuver known as a recess appointment which allows a president to install a nominee for a calendar year, even if he or she has not secured Senate confirmation to a government post, the official said on condition of anonymity.

But Republicans, who have reservations about the scope of the CFPB, have stonewalled White House attempts to force a confirmation vote on Cordray.

Using congressional procedures, party leaders forced the Senate Democratic leadership to convene the Senate every few days over the holiday period in "pro-forma" sessions in a bid to prevent recess appointments.

Obama's move sets up a legal test case centering on the checks and balances system of US government which will probe the president's powers to enforce his will over Congress.

He was expected to formally make the announcement, which will likely cheer his liberal base ahead of November elections, on Wednesday during a visit to the crucial swing state of Ohio.

Obama has discounted Republican arguments on the CFPB, saying they agreed to the terms of the agency by voting for the financial regulatory reform that he pushed through Congress in July 2010.

He also accuses his Republican foes of blocking the proper functioning of the CFPB to shield well-heeled corporate allies in the corporate world who harmed US consumers by triggering the financial crisis.

Republicans overwhelmingly opposed the law that created the consumer watchdog agency but oppose the confirmation of Cordray -- or anyone else -- until Democrats agree to modify the bureau to improve its accountability.