Obama's Team Brings Out the Old and the New

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.

Jake Tapper

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.

pic of president-elect barack obama unveiling his economic team

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.

On Wednesday, Clinton told the Obama transition team that she would likely reject the offer.

For Obama's team, Bill Clinton's personal business dealings had initially been a subject of concern. International dealings involved with his presidential library, and his charitable endeavors through the Clinton Foundation had created complications and possible conflicts of interest for his wife. But it did not take long to negotiate an agreement that would prevent any conflict.

Jake Tapper

Sources say Hillary Clinton was concerned she would lose independence. In the Senate, she is her own master, and that would change substantially as America's top diplomat. She also would have to work closely with Obama, with whom she clashed on international issues during their run for the Democratic presidential nomination.

But seeing her concerns, several people close to Obama reached out to the former first lady Thursday to convince her to take the secretary of state offer. And by Thursday night, Clinton had conveyed to the president-elect that she was interested in the job, essentially accepting his offer.

Details are still being worked out, but an announcement is expected to follow shortly after Thanksgiving, when there also may be word on other members of Obama's national security team.

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