Obama's Team Brings Out the Old and the New

Nov. 21, 2008 — -- President-elect Barack Obama's Cabinet is shaping up, and the combination of players is not only reminiscent, in some ways, of the 1990s, Obama may also tap several of his former rivals for the top spots.

Dominating the headlines today was Timothy Geithner, the president of the New York Federal Reserve, who likely will emerge as the secretary of treasury in the Obama administration.

Obama is expected to announce Geithner as his nominee early next week.

Markets rallied on news of the 47-year-old's selection, gaining almost 500 points Friday. Geithner is not only a Wall Street veteran, he was closely involved in the $29 billion buyout plan to rescue Bear Stearns and brokered the deal that led to its acquisition by JP Morgan Chase. He was also involved in the bailout of AIG and buyout of Merrill Lynch.

But while he is praised for his "outside-the-box-thinking," Geithner -- a registered independent -- has also come under fire for some of the decisions that were made in the "inner circle," particularly one that allowed Lehman Brothers to fail.

Sources say the only other contender to lead the Treasury Department was award-winning economist Lawrence Summers, a controversial figure who was forced out as president of Harvard University for a number of perceived insults, including suggesting that biological differences explain why women are inferior to men in science, engineering and math.

The former World Bank economist will likely be tapped for another senior economist post, with many Democrats saying he will replace current Federal Reserve chairman Ben Bernanke when his term ends in January 2010.

ABC News has also learned that New York Sen. Hillary Clinton has essentially accepted an offer to be the secretary of state nominee.

Sources said the New York senator -- who met Obama last week in Chicago -- was torn about the post. Since meeting last week, the once-fierce primary rivals have discussed what they hoped for her to achieve in that position.