Feb. 24, 2009 -- "We begin this year and this administration in the midst of an unprecedented crisis that calls for unprecedented action," President Barack Obama said just days after taking office.
Despite the urgent call to action, the agency leading the way is understaffed and overburdened as it confronts the biggest economic crisis since the Great Depression, government analysts say. The Treasury Department still has numerous job vacancies that need to be filled, leaving Secretary Tim Geithner working on his own, according to Darrell West, head of government studies at Brookings Institution.
"Essentially Geithner is sitting over there by himself and does not have a staff," West said.
In the past two weeks, Geithner has moved quickly, outlining a revised approach to stabilize the financial sector and a program to assist struggling homeowners from losing their homes to foreclosure. However, critics say Treasury has not moved quickly enough to fill key positions -- such as deputy secretary, various undersecretary posts, and general counsel -- which may have contributed to a lack of details in Treasury's plans, which in turn caused a dive in the stock market.
"If the secretary had a full staff he would've been in a stronger position to work out the details, so I'm sure that has been part of the problem," West said.
On Feb. 10, when Geithner announced a plan to use up to $1 trillion to shore up the financial sector, the Dow fell 381 points. Seven days later, when President Obama signed the $787 billion economic stimulus package into law in Denver, the Dow dropped 297 points. On Monday, the Dow closed at its lowest point since May 1997.
Some analysts believe Geithner is suffering from the lack of a complete staff at his disposal.
"It's an overwhelming job even if you have a full staff, and that's certainly not yet the case," said Rob Nichols, president of the Financial Services Forum.
Short-Staffed at a Challenging Time
Nichols, a former Treasury spokesman, estimated that right now Geithner "probably has 10 or 20 percent of the political appointees around him that he ultimately will have."
"Treasury is not moving fast enough," West said. "Given all of the enormous economic and banking challenges that we face, we really need a full team on the field."
The Treasury Department said they have already completed a "significant" amount of work in a very short timeframe.
"The Obama Administration has taken an unprecedented level of action toward economic recovery in a very short period of time," a Treasury spokesperson said in a statement. "From passing a recovery bill to crafting a framework for financial stability and mortgage affordability, there's a significant amount of work being done by both a group of appointees and a significant army of talented career professionals at Treasury."
Some analysts agree, but warn that bigger challenges lie ahead as the department's workload increases.
"So far, they are doing a good job keeping up," said Scott Talbott, Senior Vice Prsident of Government Affairs at the Financial Services Roundtable. "The challenge will come as they flesh out the details of the second $350 billion and begin implementing the housing proposal."
What's the Hold-Up?
Analysts point to a variety of possible causes for the hiring delays, including new ethics rules introduced by Obama himself. The new commander in chief has barred lobbyists from taking jobs where they would be working on issues that they have lobbied on during the last two years. Treasury has also imposed stricter regulations on Wall Street, preventing lobbyists from contacting the Department as it works on distributing the billions in federal funds remaining from the banking bailout program.
"President Obama has set very high ethical standards and at Treasury you need people who have financial expertise," said West. "That invariably is going to lead to Wall Street because that is where most of those people work," West said.
Geithner, former head of the New York Federal Reserve, has already turned to Wall Street to fill one high-ranking post: his chief of staff, Mark Patterson, came to Treasury after working as a lobbyist for Goldman Sachs.
The vetting process may also be slowed by an administration that has already been hit by damaging scandals as high-profile nominees made their way through the vetting process. Health & Human Services nominee Tom Daschle stepped aside amid a tax controversy, as did Office of Management & Budget nominee Nancy Killefer. Geithner himself ran into trouble for failing to pay $40,000 in Social Security and Medicare taxes from 2001-2004, but he apologized for the mistake, stated that he had paid back the money, and he was eventually confirmed by the Senate.
"Clearly the dust-up surrounding the Geithner tax issue and the Daschle tax issue have given everyone in the process pause because they know if they send forward another name with a Treasury official with any sort of blemish, they're going to get dropped like a hot potato," a financial services industry executive told ABC News.
"A Moment of Maximum Peril"
These obstacles only make Geithner's job more difficult, as if his task of fixing the nation's financial mess wasn't already tough enough.
At a Senate Banking Committee hearing February 10, chairman Chris Dodd called this "a moment of maximum peril." Ranking member Robert Bennett of Utah thanked Geithner for his "willingness to step into as nasty a briar patch as anybody's ever tackled."
With an unprecedented economic crisis getting worse by the day, a nation needing urgent action, and a world in a deepening recession waiting for his next move, Geithner had his hands full from the beginning. But without adequate help around him, that briar patch might turn out to be even nastier than expected.
ABC News' Charlie Herman contributed to this report.