Harry Reid May Invoke Nuclear Option to Achieve Confirmation of Mel Watt

Obama nominee to head FHFA will face strong GOP opposition

Rep. Watt and Obama / AP
July 23, 2013

The nomination of Rep. Mel Watt (D., N.C.) to head the Federal Housing Finance Agency will determine whether Senate Majority Leader Harry Reid (D., Nev.) will use the threat of filibuster reform to force through additional federal nominees, Senate sources say.

Reid’s "nuclear option" threat led to the confirmation of two cabinet officials and one independent agency head last week. Some Republicans agreed to forego a filibuster to prevent Reid from changing Senate rules to codify a mere majority requirement for nominees.

Labor Secretary Thomas Perez, Environmental Protection Agency administrator Gina McCarthy, and Consumer Financial Protection Bureau chief Richard Cordray were all confirmed following the deal.

Some Senate Republicans worry that Reid will use an implicit threat of once again seeking the "nuclear option"—changing Senate rules to require a mere majority to approve presidential nominees—to get Watt confirmed.

"Reid really wants it done," a Democratic source told Politico of the Watt nomination on Tuesday.

The source said Reid would seek a time agreement deal on Watt’s nomination. However, such an agreement requires unanimous consent, meaning an objection from any senator would scuttle the motion.

Intense opposition from Senate Republicans makes such a deal unlikely. The only Republican to publicly back Watt’s nomination is fellow North Carolinian Sen. Richard Burr.

Sen. Mike Crapo (R., Idaho), the ranking Republican on the Senate Committee on Banking, Housing, and Urban Affairs, urged colleagues to oppose the nomination, which was approved by the committee on a party line vote.

Other senators have balked at Watt’s bid. A spokesman for Sen. Bob Corker (R., Tenn.), a Senate Banking Committee member, told the Washington Free Beacon that "a technocrat, not a politician, should head the FHFA."

Conservative political groups are also whipping against the nomination. The Club for Growth announced on Friday that it will "key vote" all votes on Watt’s nomination, including on procedural measures that allow the nomination to move forward.

The Club’s clout among conservatives could encourage some senators to oppose invoking cloture on the nomination, allowing it to move forward to a floor vote.

Both Democrats and Republicans see a cloture vote as a test of the Senate’s approach to nominations in the wake of the nuclear option deal.

Watt’s nomination "will be an early test to see whether that ‘new and improved’ Senate has a 36-hour lifetime or longer," Sen. Mark Warner (D., Va.) told the Hill over the weekend.

Crapo declined to say whether the GOP would seek to block Watt’s nomination on the Senate floor.

Some Republicans worry that Reid left an implicit nuclear option threat on the table, even after the Senate approved the three federal officials last week, and that attempts to block Watt’s bid would renew Democratic efforts to effectively do away with the filibuster for votes on presidential nominees.

The FHFA secretary is not a cabinet position, noted Andrew Roth, the Club for Growth’s vice president of government relations, but "it’s a very powerful agency," and Reid is determined to see Watt confirmed.

One Senate GOP aide told the Free Beacon that Reid created a "de facto nuclear situation where Republicans feel they can’t oppose anybody" without worrying about rule changes that could effectively eliminate the filibuster.

The nuclear option deal averted those rule changes, which Reid himself decried as inimical to Senate comity and the democratic process as late as 2005, but some say that the deal established a persistent threat, neutering future opposition to presidential nominees.

"Harry Reid is no doubt emboldened after winning two consecutive showdowns over the nuclear option," Heritage Action for America spokesman Dan Holler told the Free Beacon in an email.

"No one, including those who negotiated last week’s deal, should be surprised if he resurrects the nuclear option over the next batch of nominees," Holler insisted.

Reid has suggested that the nuclear option will remain on the table. His office did not return requests for comment on whether it is a possibility with respect to Watt’s nomination.

Republican sources suggested that last week’s deal would not preclude their opposition to Watt’s nomination.

"Mel Watt was not part of the deal to avert the nuclear option," noted one source familiar with Corker’s thinking on the issue.

Republicans worry that Watt would increase the federal government’s role in the housing market as FHFA secretary, a tendency they see as detrimental to the continued recovery and strength of the housing sector.

"It is entirely inappropriate for a politician to fill this role who has explicitly advocated for greater involvement by the federal government in the mortgage industry," Roth wrote in the Club’s key vote alert.

"Mel Watt's career has been all about granting government goodies to big banks as well as his favored liberal constituencies," said John Berlau, senior fellow for finance and access to capital at the Competitive Enterprise Institute, in a Monday email.

Watt has also been criticized for an attempt to "destroy" the Office of Congressional Ethics [(OCE)], as the watchdog group Citizens for Responsibility and Ethics in Washington (CREW) wrote.

Watt introduced legislation to slash OCE’s funding by 40% in 2011, shortly after the office investigated him for potential ethics violations. He was eventually exonerated, but "apparently he is still smarting from the inquiry," CREW said.

The group called Watt’s legislation "disgraceful."