President Barack Obama on Friday formally appointed Harvard University economist and longtime friend Elizabeth Warren as a special adviser to help lead the new Bureau of Consumer Financial Protection.

“Getting this agency off the ground will be an enormously important task, a task that can’t wait. And that task is something that I’ve asked Elizabeth to take on,” Obama said in a statement in the Rose Garden, standing alongside Warren and Treasury Secretary Timothy Geithner.

“Secretary Geithner and I both agree that Elizabeth is the best person to stand this agency up. She was the architect behind the idea for a consumer watchdog, so it only makes sense that she should be the architect working with Secretary of Treasury Geithner in standing up the agency,” he said.

In her interim post, which will eventually be filled by a permanent chief, Warren will oversee all aspects of the bureau’s creation, including staff recruitment and future decisions about the agency. The president said she will also have “direct access to me and Secretary Geithner” and will play a pivotal role in helping to pick a director for the agency. The consumer bureau was created under the new financial reform law.

“I am proud that we got this done. And I’m equally proud that Elizabeth Warren will be helping to make her original vision a reality,” Obama said.

Congressional Democrats praised Obama for tapping Warren, who has been the favored candidate among liberals. House Financial Services Chairman Barney Frank (D-Mass), who sponsored the financial reform bill, said he is pleased with Obama’s pick.

“I offer my congratulations to Elizabeth Warren, both for the work that she did to create the agency and for the fact that she will now have the opportunity to make it function as it was intended,” he said.

House Rules Chairwoman Louise Slaughter (D-N.Y.) said she “can’t imagine that anyone could do a better job in a position whose highest goal is looking out for the little guy. I am grateful to the president for ignoring skeptics and assigning Liz to this important post.”

Sen. Chris Dodd (D-Conn.), who also sponsored financial reform bill, called Warren “a strong, qualified and terrific watchdog, and I have no doubt her advice will help move this important new bureau forward to make sure American consumers are protected from hidden fees, abusive terms and deceptive practices.”

But Dodd, who has said he thought Warren was too liberal to win Senate approval for the job on a permanent basis, also said it is crucial that Obama move swiftly to name a permanent director to the agency.

“Until a director is at the helm, this new bureau will not have the teeth that it needs to put strong protections in place, and could leave the entire bureau in jeopardy,” he warned. “Ms. Warren and I share the same goal of getting this vital advocate for consumers up and running quickly, and she pledged to me that she would work closely with the Senate Banking Committee and the bureau’s first director to get it done.”

Republicans criticized Obama for creating an advisory role for Warren that allowed her to avert the Senate confirmation process.

“This appointment lacks transparency and represents the latest power grab by the president to expand the reach of an intrusive government into the lives of Americans … The president should restore transparency to the process and do the right thing by formally nominating Ms. Warren for Senate confirmation,” said Republican Policy Committee Chairman John Thune (S.D.).

Rep. Tom Price (R-Ga.), who chairs the conservative Republican Study Committee, bashed Obama for giving “his personal friend an open-ended, unilateral appointment to head up a brand new bureaucracy with sweeping powers to restrict Americans’ financial options.”

Warren is “way too far left of mainstream America to be confirmed by a Democrat-controlled Senate,” Price said. And given the special advisory role created for her, she “could conceivably hold this post for years without ever having to answer to the people’s elected representatives. If that does not concern you, I don’t know what will.”