Warren’s hard-line positioning shows how the Senate is growing more polarized. Elizabeth Warren, hard-liner

Earlier last week at the White House, President Barack Obama tried to use his powers of persuasion on Elizabeth Warren, privately urging the consumer watchdog-turned-Massachusetts senator to back the student loan deal he was reaching with Senate leaders.

It didn’t work.


On Thursday, she went to the Senate floor to attack the plan, saying it would hurt students and benefit big banks. “I think this whole system stinks. We should not go along with any plan that continues to produce profits for the government. It is wrong,” Warren said.

( QUIZ: Do you know Elizabeth Warren?)

This wasn’t an isolated incident. After nearly seven months in office, Warren has staked out firm ground to the left of the president and Senate Democratic leaders. She has called for prosecuting the actors in the financial meltdown; urged Senate leaders to invoke the nuclear option to help confirm Richard Cordray as head of the Consumer Financial Protection Bureau, an agency she helped create; and was one of just four senators to vote against Obama’s U.S. trade representative nominee, demanding more transparency on trade agreements.

For someone elected as a liberal darling after facing opposition for the CFPB job — and whose name is often seen alongside “2016” — Warren’s causing some heartburn among her fellow Democrats.

So after the president’s efforts failed to sway Warren, Senate Majority Whip Dick Durbin, who represented Illinois alongside Obama, took 20 minutes on the Senate floor Thursday to push back against Warren and her student loan position. Compromise is necessary, he said, to avoid further hurting students after so many false starts on legislation to avert skyrocketing rates.

“There are some who’d like to hold out for something different. I’m with ’em,” Durbin said. “But I’ve watched the votes here. … Face the reality.”

Warren’s hard-line position underscores how the Senate is growing increasingly polarized, with younger and more ideologically driven senators carrying major weight within their respective caucuses.

Indeed, Warren and several other liberal Democrats stood in the way of the bipartisan deal that had been emerging for several weeks, giving the GOP fodder to seize on the Democratic divide. The lawmakers, including Sens. Jack Reed (D-R.I.), Bernie Sanders (I-Vt.) and Warren, opposed the deal because it continues a government program they think is based more on revenue than on helping students. They contend the program creates profits of $184 billion over the next 10 years.

On the floor of the Senate, she described Republicans’ position on student loans as “whatever you do, make sure that the government makes $184 billion off the backs of students.”

Just as she pilloried the bipartisan proposal, Republicans scoffed at her idea. Her first bill — which drew 10 co-sponsors — would let students struggling with rising college costs borrow money at the same low rate — currently less than 1 percent — as the big banks.

“I thought she was off the wall before. That’s nonconventional thinking,” said Sen. Richard Shelby of Alabama, a senior Republican on the Banking Committee. “I don’t think that’s a sound proposal.”

“It sounds so attractive to say: ‘Shouldn’t students borrow at the same rate that banks do?’ She just forgets to tell them that banks have to pay it back the next day,” said Sen. Richard Burr (R-N.C.), an architect of the loan deal.

“Bipartisan positions have to be somewhat similar,” Burr added. “Hers is so radical in comparison to the president’s plan, the House’s plan, the bipartisan plan, even where Dick Durbin is.”

Warren’s allies say she is helping reframe the debate and pushing lawmakers to consider consumers rather than banks. In fact, Senate sources think a move toward deficit neutrality stemmed from her rhetoric against the government’s profitable loan operation.

The White House-Senate deal would tie rates to 10-year Treasury notes, capping them at 8.25 percent for undergrads, 9.5 percent for graduate students and 10.5 percent for parents borrowing money. The bill would lock in rates for the life of the loan and reduce the deficit by $715 million, well below the nearly $1 billion in deficit reduction that negotiators started at.

But liberal critics opposed the deal because it continues the program that will bring in nearly $200 billion over the next 10 years at the expense of students. Warren also likened the bill’s opening interest rate of less than 4 percent for undergraduates to the “teaser rates” of mortgages and credit cards because rates are now tied to Treasury notes. As interest rates rise in the coming years, the loan rate for undergraduates could eventually eclipse the 6.8 percent rate that went into effect on July after rates doubled.

The substance and style of Warren’s challenges to the country’s financial system have made her a favorite of her party’s liberal wing. Sen. Jay Rockefeller (D-W.Va.) was effusive in his praise for Warren, whom he called a like-minded lawmaker on the ideological spectrum.

“Sometimes I just — how can we be so lucky? I mean that sounds pretty gooey, I admit, but I mean it,” Rockefeller said.

Sen. Tom Harkin (D-Iowa), chairman of the Health, Education, Labor and Pensions Committee, signed on to the deal but said he sympathized with Warren’s arguments.

“I think she’s onto something,” he said.

What you won’t necessarily hear is the senator singing her own praises.

Warren has been careful on when to assert herself and refuses to acknowledge reporters in the hallway of the Capitol as many of her colleagues do. (Warren declined multiple interview requests for this article.)

Rockefeller said it’s a sensible strategy for a freshman senator who is already a star in liberal circles: “That’s her way of not trying to be the big-shot that she is too early,” he said.

But Warren was back in the spotlight last week as the Senate’s presiding officer when Cordray was confirmed — and was sitting in the front row of the audience when Cordray was sworn at the White House on Wednesday. That’s where the president privately urged Warren on the student loan deal, telling her the plan wasn’t that bad, sources said. She wasn’t convinced.

Senior Democrats are quick to praise Warren, but they say that pragmatism must sometimes trump idealism.

“I respect Elizabeth’s point of view and her intelligence when it comes to this issue. She is challenging some basic premises of the student loan program,” Durbin told POLITICO. “I would join her in those challenges, but I’m trying to work within the world of political reality.”

Another top negotiator on the talks, Sen. Joe Manchin (D-W.Va.), said of Warren’s criticism: “Everybody had to give and take on this — that’s the way a compromise should work out.”

Still, Warren’s office was quick to cite several bipartisan efforts from her first few months. She has teamed up on a fishing disaster funding amendment with Sen. Lisa Murkowski (R-Alaska); the Jumpstart GSE Reform Act with Sens. Bob Corker (R-Tenn.), Mark Warner (D-Va.) and David Vitter (R-La.); and revisions to the Glass-Steagall Act with Sens. John McCain (R-Ariz.), Maria Cantwell (D-Wash.) and Angus King (I-Maine).

Some Republicans say they are willing to work with her despite her staunchly liberal views.

“She’s got a lot of energy; she’s got a lot of pizazz. There are certain issues where she brings instant credibility,” McCain said. “Most smart people come to the Senate and know the way to get things done are to work in a bipartisan fashion.”