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The Week Elizabeth Warren Decided to Run for President

Getty Images/Steve Pope

Or may have decided. We won’t know for a few months whether the Massachusetts senator will challenge Hillary Clinton for the Democratic nomination, but if she chooses to run, we’re going to look back at this week as a pivotal moment in Warren’s decision-making.

Warren has been waging two battles against mainstream Democrats over the past month in an attempt to reduce Wall Street’s influence within the party. Both of those battles hit inflection points this week. The first is over President Barack Obama’s nominee for the under secretary for Domestic Finance, the number three position at the Treasury Department. It’s rare for such a nomine to become a political issue, much less a political issue within a party. But that’s what has happened to Antonio Weiss, whom Obama nominated on November 12.

A week later, Warren came out vocally against Weiss, arguing that he was both unqualified for the job and another example of Democrats' filling senior government positions with people from Wall Street. “The over-representation of Wall Street banks in senior government positions sends a bad message,” she wrote in the Huffington Post. “It tells people that one—and only one—point of view will dominate economic policymaking. It tells people that whatever goes wrong in this economy, the Wall Street banks will be protected first. That's yet another advantage that Wall Street just doesn't need.” 

On Tuesday, Warren took her criticism of Weiss’s nomination up a notch. Speaking at a conference on the Federal Reserve, Warren tore into Weiss’s qualifications and ripped her party for cozying up to Wall Street. Writing at this site, David Dayen argued that the speech was a direct attack on the Democratic establishment. “In the wake of another midterm wipeout,” he wrote, “the Democratic Party has been flailing around for some guiding principles, and Warren has seized on this moment to provide them.” During the week, a collection of Democratic senators—Joe Manchin, Jeanne Shaheen, and Al Franken, among others—announced that they opposed Weiss's nomination. Obama will need significant Republican support in the next Congress if Weiss is to be confirmed.

But Warren’s biggest moment this week was her crusade against a must-pass spending bill over a little-known policy rider that would have eliminated a part in the Dodd-Frank financial regulation bill. Section 716 prevents banks from using taxpayer-backed funds to trade in riskier financial products known as custom swaps. On Wednesday, Warren delivered a vicious speech on the Senate floor in which she implored House Democrats to kill the bill.

“Now, the House of Representatives is about to show us the worst of government for the rich and powerful,” she said. “The House is about to vote on a budget deal, a deal negotiated behind closed doors that slips in a provision that would let derivatives traders on Wall Street gamble with taxpayer money and get bailed out by the government when their risky bets threaten to blow up our financial system.… This provision is all about goosing the profits of the big banks.”

The provision has also garnered significant Democratic support in the past. In 2013, for instance, 70 Democrats voted for it in a bill that died in the Senate. Warren’s speech had made the issue toxic and persuaded other House Democrats to vote against not just the provision but a massive spending bill.

This position put her at direct odds with the White House. President Obama not only supported the bill, but he and Vice President Joe Biden made calls to individual Democratic congressman asking for their votes and White House Chief of Staff Denis McDonough was dispatched to the Hill as well. In the end, Obama prevailed. Fifty-seven Democrats sided with 162 Republicans and the bill barely passed. But Warren had taken on the Democratic establishment and came within just a few votes of winning.

What’s striking about these two battles is that they mean much more politically than substantively. Weiss’s nomination is for a technocratic position that requires experience in financial markets, for instance. “I don’t know the long history of this position but at least since I’ve been paying attention, it’s typically been filled by someone with precisely the market experience that Weiss brings to the table,” Jared Bernstein, the former chief of staff to Biden, wrote on his blog. Four former under secretaries for Domestic Finance released a letter Thursday in support of Weiss as well. Even the provision in the spending bill, while certainly harmful for financial regulation, does not undermine Dodd-Frank. "In the grand scheme of things," Matt Yglesias writes at Vox, "Section 716 is not earth-shattering in its impact."

But these two issues hold significant appeal for the Democratic base that believes Obama has grown too close to Wall Street and worries that Clinton will be more of the same. This has given Warren an opening to gain even more influence in the party as the primaries approach, and she's taken it.

This doesn’t mean that she will run. On Tuesday, her press secretary said, "As Senator Warren has said many times, she is not running for president." But note the present tense—Warren could still run in the future.

It’s a tough decision, since Warren still has little chance of winning the Democratic nomination. A CNN poll released on December 2 found that 65 percent of Democrats support Clinton, with just 10 percent favoring Warren. For comparison, Clinton’s current lead is about three times as large now as it was over Barack Obama during the comparable period before the 2008 election.

That may not matter, though. Warren can have a significant influence on Hillary Clinton and the Democratic primary even if she doesn’t come close to winning. In fact, she could lose the primary and come out an even larger force in the party. That’s exactly what happened with her losing battle this week. It could be a sign of bigger fights to come.