Treasury Secretary Tim Geithner, the last remaining member of President Obama's original economics team, is reported to be leaving at the end of January, reports Bloomberg News. Geithner's departure will not depend on whether or not a deal has been reached on raising the debt ceiling, according to two unnamed sources. The Secretary has apparently spoken to both White House officials and Wall Street executives about resigning his cabinet post, saying he is "not likely" to change his plans to accommodate the wishes of the president. In a Nov. 16 interview for Bloomberg Television Geithner said he would stay in his post until Obama’s inauguration, and he brushed aside suggestions that he might stay longer if a successor isn’t confirmed by then. During that same interview he stated:
[I'm] “very confident that we’re going to get enough done in these next few weeks” and that Obama will have a successor in place so I’ll be able to go off and do some other things.”This development puts further pressure on Obama to name a new treasury secretary as soon as possible before debt ceiling negotiations begin. It has been long speculated, since Geithner made his departure announcement, that the leading contender for the post is White House Chief of Staff Jack Lew.
Lew, 57, worked as a managing director for Citigroup from July 2006 until the end of 2008, but has spent most of his career in government. He served as director of the Office of Management and Budget for both Obama and President Bill Clinton and was an aide to the late Tip O’Neill, former speaker of the U.S. House. However since Lew has had little experience dealing with financial markets, the president is reportedly hedging his bets.
More below the squiggle.
Obama may seek to name a Wall Street executive as deputy Treasury secretary, the same unnamed sources have told Bloomberg.
Administration officials had approached American Express Co. (AXP) Chief Executive Officer Kenneth Chenault about joining Obama’s second-term cabinet, possibly as Treasury secretary. Chenault has indicated to the administration he isn’t interested in leaving the private sector, according to one of the people, and a spokesman said he plans to stay at the company.Even though this puts the president in a precarious position in dealing with the debt ceiling, Paul Krugman says this may not be such a bad development.
“Ken has no plans to leave American Express,” said Michael O’Neill, a spokesman for New York-based company, declining further comment.
A White House spokeswoman, Amy Brundage, declined to comment on personnel matters. Jenni LeCompte, a Treasury spokeswoman, also declined to comment.
I hate to say this, but I find this reassuring. While I have no insider information here, I’ve had the sense that Geithner has consistently been a voice urging the president to cave in for fear of upsetting the markets, with no real concern for the dangers of giving in to blackmail. His departure makes it at least somewhat more likely that Obama will stand his ground.Regardless of what you think of Geithner's advice to the president in his time at Treasury, getting a new treasury secretary through a confirmation process by the end of February in time to familiarize himself with proposed spending cuts, funding the government (probably through another continuing resolution) and debt ceiling negotiations (whether the debt limit is technically part of negotiations doesn't matter) will be an almost insurmountable task, especially if Senate Republicans use their usual delaying tactics to prolong or thwart the confirmation process .