White House Confident Geithner Will Remain at Treasury

Thursday, 04 Aug 2011 08:05 PM

 

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(Updates with economist quote in 11th paragraph.)

Aug. 4 (Bloomberg) -- President Barack Obama’s senior advisers are confident Timothy F. Geithner will remain Treasury secretary even though he hasn’t publicly revealed his intentions, an administration official said.

Geithner met recently with Vice President Joe Biden and laid out his reasons for wanting to leave the post. Biden outlined why it was vital that Geithner remain, said the official, who spoke on condition of anonymity because no announcement has been made.

A departure by Geithner would represent another blow to an administration that confronts a weak economy, a declining stock market and uncertainty over how it will resolve controversy over the deficit.

The Standard & Poor’s 500 Index tumbled 4.8 percent today and has dropped 11 percent since July 22, the biggest decline over the same amount of time since March 2009. A report tomorrow may show the jobless rate held at 9.2 percent in July.

White House press secretary Jay Carney said in his daily news briefing today that Geithner hasn’t made a decision yet. “He has said he will be here for the foreseeable future,” Carney said, referring to previous public comments by the Treasury secretary. “That’s what he tells us.”

Geithner has been engaged in recent discussions about upcoming events such as the Group of Seven meeting in France next month and efforts to overhaul the housing-finance system, another administration official said. Geithner hasn’t been delegating more authority than usual or given any indications that he is planning to leave, the official said.

Debt Limit

Geithner, 49, previously signaled to White House officials that he was considering leaving the administration once Obama reached an agreement with Congress to raise the federal debt limit. Obama signed a bill raising the debt limit on Aug. 2.

In an appearance this week on ABC television’s “Good Morning America” program, Geithner said he hadn’t made up his mind.

“I haven’t made that decision yet,” Geithner said. “And, you know, we’ve got a lot of challenges, president’s got a lot of challenges, and, you know, I got other pressures on me, too. But I’ll make that decision at the right moment.”

Geithner said on June 30 that his son would be returning to New York to finish high school, and that “I’m going to be commuting for a while.” Before joining the administration in January 2009, Geithner was president of the Federal Reserve Bank of New York, a post that put him at the center of the government’s response to the financial crises of 2008.

‘Meat Grinder’

Vincent Reinhart, who worked with Geithner as director of monetary affairs for the Federal Reserve Board, said, “it’s pretty understandable why he would want to leave. It is a meat grinder of jobs -- both jobs -- through the hardest financial times in anybody’s memory.”

Still, Reinhart, now a resident scholar at the American Enterprise Institute, said in an interview with Bloomberg Television that he expects Geithner to stay at his post.

“I think someone who has spent his life in public service has got to be sensitive to the George Marshall moment when the president of the United States calls you and says you really can’t leave,” Reinhart said. “I think it would be very hard for him to do it.”

Jake Siewert, a Treasury counselor close to Geithner who worked on issues ranging from financial markets to media strategy, is leaving this month, he said in an e-mail today. Siewert is returning to New York, where his family lives.

--With assistance from Peter Cook in Washington. Editors: Christopher Wellisz, Jim Rubin.

To contact the reporters on this story: Mike Dorning in Washington at mdorning@bloomberg.net; Ian Katz in Washington at ikatz2@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

© Copyright 2014 Bloomberg News. All rights reserved.

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