Is Beating Up on CFPB's Warren a Good Political Strategy for the GOP?

WASHINGTON — Sometimes in Washington, even bad public relations can be good politics.

While the showdown last week between Rep. Patrick McHenry and Elizabeth Warren may have made the North Carolina Republican seem like a bully to many observers, analysts said personally attacking the de facto head of the Consumer Financial Protection Bureau is a smart political strategy for the GOP. It is likely to help the party's fundraising efforts on Wall Street and it plays well to the Republican base fearful of an overzealous government.

Yet strangely, the attacks also help Democrats, who played up their defense of the consumer by calling publicly for McHenry to apologize and helped raise the profile of the CFPB outside of the Capitol.

The face-off also proved that Warren is no longer seen as just a regulator. Rather, she has become a potent symbol for both political parties as they continue to debate the Dodd-Frank Act.

"Most of the banking and Wall Street community is strongly anti-Warren, so undoubtedly Republicans can reap the financial rewards during the political season," said Larry Sabato, director of the University of Virginia's Center for Politics.

But "Republicans ought to be concerned about once again being pigeonholed as the best friend of Wall Street, the bankers and the oil companies. That image has hurt them for years. The little guy wants an advocate, too."

One thing is certain: The public is paying more attention than it was before, thanks to Tuesday's hearing.

A YouTube video of the most terse exchange had been viewed nearly 300,000 times as of Friday morning. The Facebook page of McHenry, the subcommittee chairman who accused Warren of lying, has been deluged with hundreds of comments from Warren supporters.

Even Treasury Secretary Tim Geithner weighed in on Wednesday, calling the Republicans' treatment of Warren "deeply unfair."

But most observers agreed neither side came off well, with Warren appearing indignant that Congress was "causing problems" with her schedule after testifying for an hour, when even high-level cabinet officials often clear their appointments before appearing on Capitol Hill. (Warren noted that the timing of the hearing had been changed several times.)

McHenry, however, went overboard by saying Warren lied about an agreement on what time she could finish her testimony.

The North Carolina Republican later released an e-mail chain between the CFPB and the committee that, while he claimed it was hard proof Warren wasn't telling the truth, merely suggested the entire matter was a misunderstanding between the two sides' respective staffs.

"In general, those moments don't make anyone look good, and it is always dangerous to accuse someone of lying without hard, convincing evidence," Sabato said.

Still, despite the breakdown in decorum, Warren bashing is an effective fundraising strategy for Republicans, said Wendy Schiller, a political science and public policy professor at Brown University.

"If you can vilify her and show very important campaign contributors that you have the power not only to block her but to really unravel her or diminish her prestige," Schiller said, "I think that sends a very strong signal to particular campaign contribution groups that you are on their side and you are going to stay on their side."

Schiller said Republicans see going after Warren as an effective tactic.

"I don't think Republicans are in the least bit sorry about it," Schiller said of the hearing. "I don't think they feel that they are going to suffer for it among the people that they think are the most important, in this case Wall Street."

Christopher Arterton, a professor in the Graduate School of Political Management at George Washington University, said Republicans have also succeeded in personalizing the debate about the Consumer Financial Protection Bureau, and making Warren a symbol of government overreach despite claims that their beef is about the bureau and not her.

"The Republicans are smart enough to know that they're not really going to be able to overturn Dodd-Frank in this case, because anything that was a frontal assault on it would not be acceptable to the Senate and vetoed by the president," Arterton said. "So they kind of have to nibble at it, as they're nibbling at the health care, to kind of delegitimize, defang and defund."

For her part, Warren has managed to charm bankers, but it does not seem that she's been able to change the dynamics in Washington. Observers say she has angered certain lawmakers and that, like many academics, she doesn't have the political skills to smooth it over.

"This is not someone you would call a schmoozer," Schiller said.

Still, Warren has a large and growing number of backers, many of whom are being actively courted by Democrats.

Within 48 hours of the May 24 hearings, the Progressive Change Campaign Committee had gathered more than 100,000 signatures for a letter urging President Obama to give Warren a recess appointment. Rachel Maddow, a liberal TV host, mentioned the incident on her MSNBC show two nights in a row.

Several Democrats seized the momentum, sending McHenry a letter asking him to apologize to Warren and to the committee for "denigrating the proceedings and potentially compromising our ability to conduct our important work in the future."

For a battle that has primarily been fought in the Beltway, the incident is helping the CFPB fight gain the attention of a wider pool of voters. The question remains, however, whether Democrats can translate that into a voting issue next year.

"I suspect that the memories of the banking industry are much longer than the memories of the citizenry, and so this will not be a terribly important issue in the 2012 election," Arterton said. "Unless the Democrats see this as an opportunity to launch a media campaign and advertise on this basis."