Obama Taps Geithner to Head Treasury, Prepares Economic Team for Roll-Out Next Week

Nov 21, 2008 4:25pm

From Jake Tapper and George Stephanopoulos:

After a very fluid process in which the identity of President-elect Obama’s leading candidate for the job seemed to fluctuate like the market, on Friday New York Federal Reserve President Timothy Geithner emerged poised to become the next Secretary of the Treasury.

Mr. Obama intends to announce his nomination early next week.

As one of the government’s point people dealing with Wall Street, Geithner has earned much respect from politicians and CEOs alike. He has been working closely with the current Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke.  As evidence of Geithner’s popularity on Wall Street, when the news leaked to two prominent business media — CNBC and the Wall Street Journal — the Dow Jones Industrial Average soared almost 500 points.

Geithner, a registered independent, has long been respected in Obamaland, referred to as "Obama-esque" for his outside-the-box thinking, relative youth, his overseas upbringing (elementary school in New Delhi, high school in Bangkok) and his love of a good game of pickup basketball.

The only other serious candidate for the Treasury slot has been the man who served that role at the end of the Clinton administration, Larry Summers. The formidable Summers is a man of great intellect but also controversy — he was forced out as president of Harvard for any number of perceived slights, including suggesting that females are innately inferior in engineering and math.

Obama has been encouraging Summers to serve in his administration in some other role, perhaps as chair of the National Economic Council. Some Democrats suggest that Obama plans to name Summers chairman of the Federal Reserve when Bernanke’s term expires at the beginning of 2010.

If for some reason Summers does not go to NEC, the leading candidate is Jack Lew, currently the Chief Operating Officer of Citigroup’s Alternative Investments unit. Lew served as director of the Office of Management and Budget for President Bill Clinton. He and Dan Tarullo, a former Assistant Secretary of State for Economic and Business Affairs under Clinton — who was earlier this week named leader of the Obama Transition Team’s Economic Policy Working Group — may both end up working at NEC. Peter Orszag, the director of the Congressional Budget Office, will become Obama’s OMB director. New Mexico Gov. Bill Richardson is a strong contender to be Obama’s Secretary of Commerce.

Some high profile women are being considered for key economic slots.

Laura D’Andrea Tyson, the former chair of President Clinton’s Council of Economic Advisers, and could also play a key role in the Obama administration. The question right now — what job to give her? Would deputy Treasury Secretary be enough to lure her east from the San Francisco area, where she’s a professor at the Haas School of Business of the University of California, Berkeley.

Interestingly, though it’s unclear what the Obama Team will decide, there is a lot of support among Democrats on Capitol Hill for Sheila Bair, the Republican chairwoman of the Federal Deposit Insurance Corp., to stay on board.

In addition to wanting the best team he can put together, the Transition Team’s goal is to assemble a group that can work well together, with as few confirmation issues as possible.

– Jake Tapper and George Stephanopoulos

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