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Sunday, November 11, 2012 - Page updated at 07:30 p.m.

New faces likely for key U.S. economic posts, starting at Treasury

By Jim Puzzanghera /
Los Angeles Times

WASHINGTON — President Obama’s second term is likely to have some different faces in key economic positions, starting with a new Treasury secretary to replace departing Timothy Geithner.

Securities and Exchange Commission (SEC) Chairwoman Mary Schapiro also reportedly is considering stepping down, a year before her five-year term ends in early 2014. And Federal Reserve Chairman Ben Bernanke might not want to re-up for another four-year term as head of the central bank.

Geithner has stated clearly that he would not stay if Obama was re-elected. In fact, he was close to stepping down after the bitter 2011 negotiations with Congress over increasing the nation’s debt ceiling, but Obama persuaded him to stay through the end of his first term.

“I’ve had a lot of excitement in my job, more than my share,” Geithner said in September when asked whether the improving economic recovery would encourage him to remain at his post. “But I think the president … should have a chance, and will have a chance, to have somebody excellent and capable come in and help him with those challenges.”

It’s rare for Cabinet secretaries to serve more than four years. And Geithner took the job in 2009 after dealing with the financial crisis through 2008 as president of the Federal Reserve Bank of New York.

On Friday, the White House said Geithner will stay in his post through Obama’s inauguration as the administration negotiates with Congress to avert the so-called fiscal cliff.

White House press secretary Jay Carney called Geithner a “key participant” in the talks, but he declined to say whether the Treasury secretary would stay longer if there is no resolution by inauguration day, Jan. 21. “I don’t have a specific day he’ll depart” or how long the talks might go on, Carney said at a news conference Friday in Washington, D.C.

“I’m sure Tim is ready to go home and finally get a break, but this makes a lot of sense,” said Tony Fratto, a White House and Treasury Department spokesman during the George W. Bush administration. The White House needs to nominate a successor by December so that the Senate can confirm that person before congressional hearings on the federal budget are held in February, Fratto said.

One of the top potential candidates for the Treasury job is White House Chief of Staff Jack Lew, the officials said.

A onetime aide to former U.S. House Speaker Tip O’Neill, Lew served as Office of Management and Budget director for Obama and former President Clinton. He would bring a deep understanding of the tax and spending issues that could be at the center of the administration’s negotiations with Congress in a second term.

He also has relationships with key congressional leaders and Obama’s trust, according to the officials.

Another possible contender is Erskine Bowles, who served as Clinton’s chief of staff and was co-chairman of a bipartisan panel formed by Obama that drafted a plan to cut the deficit, the officials said.

“Erskine has plenty of experience, not only in government but in business,” said John Mack, the former chief executive officer at Morgan Stanley. “The next Treasury secretary has to have experience in the global economy.”

Bowles, though, rankled some White House aides by criticizing the president for not embracing his blueprint, the officials said.

Lew and Bowles declined to comment Wednesday.

If Obama doesn’t pick Lew for Treasury, Lew may return to New York, where he worked for Citigroup’s Alternative Investments before joining the administration, two of the officials said. Either scenario would leave a vacancy at the chief of staff job at the White House.

“The first thing is Treasury,” said former White House Chief of Staff Bill Daley. “You kind of have to figure out that one before everything else.”

Once Obama settles on a new Treasury secretary, other jobs, including chief of staff, National Economic Council director and Office of Management and Budget (OMB) director, can be filled, said the four current officials.

At OMB, Jeff Zients, the current acting director, may be in line for secretary of commerce, said two of the officials. Rob Nabors, a former deputy at OMB, would be a candidate to replace Zients.

U.S. Trade Representative Ron Kirk has said he doesn’t intend to serve in a second Obama administration.

“I miss my house, I miss my family, I want to drive my car,” Kirk said after speaking at a conference in D.C. on Sept. 19. “And I’d like to go make a little money.”

The Commerce Department is headed by an acting secretary, Rebecca Blank, an economist who took the agency’s helm when her boss, John Bryson, resigned in June for health reasons after a seizure.

In a second term, Obama may look to the private sector to fill the commerce job. One possibility: Steve Case, co-founder of America Online, chairman of investment company Revolution and a member of the president’s jobs council. Obama may pick from other members of his advisory panels, whose members include the chief executives of General Electric, Boeing and Xerox.

Many of the positions that will have to be filled are subject to Senate confirmation.

Speculation also has swirled that the SEC’s Schapiro will step down soon, with a report in September saying she was considering resigning. Democratic Commissioner Elisse Walter has been mentioned as a possible replacement.

And there are several names being floated for the job of Fed chairman should Bernanke not want to go through another potentially tough confirmation fight. The New York Times reported last month that Bernanke had told friends he would not seek another term even if Obama won. Republican presidential candidate Mitt Romney had vowed not to reappoint Bernanke if he won the presidency.

Former Obama economic adviser Lawrence Summers, who stepped down at the end of 2011, is a possible replacement, as well as Alan Krueger, who heads Obama’s Council of Economic Advisers, and Fed Vice Chair Janet Yellin.

U.S. Labor Secretary Hilda Solis is likely to stay on in Obama’s second term, according to Gary Chaison, a labor professor at Clark University in Worcester, Mass.

“Obama would be more concerned with keeping on a Hispanic woman in the Cabinet,” Chaison said. “Her background is one that would lead to almost automatic support. I don’t really see any change there if she wants to stay on.”

The same would hold for appointed members of the National Labor Relations Board, he said.

This report contains information from Bloomberg News.

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