Victoria Mcgrane – Sun Nov 23, 4:35 pm ET
President-elect Barack Obama is putting together an economic team that gets rave reviews on Wall Street and will likely get an easy ride through the Senate.
Obama greased the skids for the team when he decided to put New York Fed chief Timothy Geithner at Treasury and tuck former Clinton Treasury Secretary Lawrence Summers in the White House as a top presidential adviser, not subject to Senate confirmation.
Summers likely would have been confirmed. But his rocky tenure as president of Harvard University, particularly when he questioned whether women had the right DNA to do well in math and science, would have surely made for some excruciating televised moments for the Obama administration during the confirmation hearings.
Summers’ past support for free trade, deregulation, and other free-market policies also could have made for some awkward moments.
By elevating Geithner to the top of his economic team as treasury secretary, Obama has opted for a fresh face with only modest Clinton-era links and none of Summers’ Harvard baggage.
The 47-year-old Geithner is almost exactly the same age as the president-elect — both were born in August 1961. He and his wife, Carole, graduated from Dartmouth in 1983. Like Obama, Geithner has two young children. And he shares Obama’s cool-headed temperament, according to those who know him well.
“Tim Geithner is uniquely qualified to do this job. He's someone who is steeped in the economy and in managing crises,” David Axelrod, Obama’s chief political strategist, who’ll be a senior adviser in the White House, said on ABC’s “This Week.” He was referring to the key role Geithner played in the Clinton Treasury Department dealing with international financial crises in Asia, Russia, and Brazil. “He's someone who, by both temperament and experience, is well-suited for the times we're in.”
Geithner’s views on a variety of fronts remain a mystery. A career civil servant , he’s had a front seat to the current financial rescue efforts but not the tight control he’ll wield as treasury secretary. While he’s written and spoken widely about the key issue of financial regulatory reform, his views on fiscal policy, home foreclosures, and trade, among myriad other economic issues, are not well known.
“I always worry about somebody who has spent his whole life at the Federal Reserve,” said Andy Stern, president of the Service Employees International Union, stressing the need for a treasury secretary to have nongovernment experience. “I just don't know him.”
Geithner has been president of the New York Federal Reserve Bank since 2003 but has spent almost his entire career in government service.
The public will see Geithner Monday when Obama formally introduces his economic team at a press conference in Chicago. Geithner and Summers, who’ll be director of the National Economic Council, are expected to appear with Obama.
Obama has already announced his economic team’s first task, constructing a massive economic stimulus package to create, or save, 2.5 million jobs over the next two years. Making the rounds on the Sunday television shows, Obama aides refused to put a dollar figure on the package. But some congressional Democrats are talking $500 billion to $700 billion — far more than the $175 billion price tag Obama talked about on the stump.
The stimulus package is one area where Geithner can expect some grilling during his confirmation hearing, especially from the Republicans on the Senate Finance Committee.
But don’t expect a Senate confirmation vote before Jan. 20, even though Senate Banking Chairman Chris Dodd (D-Conn.) and others have suggested considering the key economic nominees earlier. “I think we’re going to stick to the schedule,” Obama transition adviser Bill Daley said when NBC’s Tom Brokaw asked Sunday on "Meet the Press" about the possibility on confirming Geithner early .
Geithner has been in the confirmation chair before, but a transcript of his 1997 confirmation hearing for assistant treasury secretary for international affairs shows a perfunctory affair. He appeared with several other treasury nominees, introduced his family, gave a brief statement, and answered a few routine questions.
In contrast, the current treasury secretary, Henry Paulson, underwent a three-hour hearing when President George W. Bush nominated him in 2006.
The continuing economic turmoil means that even a well-received candidate such as Geithner will face tough questioning from lawmakers who are frustrated with the handling of the rescue so far and eager to show constituents back home that they’re trying to get a handle on the situation.
Iowa Sen. Chuck Grassley, the Finance Committee’s top Republican, previewed Geithner’s grilling in an e-mail to reporters Friday, saying he intends to ask him about the $700 billion bailout, “tax policy, expanding America’s access to foreign markets, and bringing the country’s fiscal house in order.”
“The treasury secretary has enormous powers in ordinary times and even greater powers in these troubled times,” Grassley said, “so the Finance Committee owes the American people all due care and diligence in considering this nomination.”
The hearing will also be an early test in Geithner’s communication skills as the administration’s chief economic spokesman, which experts see as an increasingly important aspect of the job.
Critics say Paulson has exacerbated economic turmoil by failing to communicate well with Congress, the market, and the public. Geithner has testified several times on Capitol Hill and given occasional speeches, but his previous posts have not required that he master the bully pulpit.
He has had some practice this past year and drew positive reviews for his performance last April at a Senate Banking Committee hearing on the Bear Sterns emergency sale, which he orchestrated.
But it’s his central role in the government’s response to the financial crisis that will undoubtedly be his biggest challenge. He’s likely to face questions — and just plain criticism — on decisions such as letting investment bank Lehman Brothers fail — though he reportedly argued against it and was overruled by Paulson — the handling of the bailout of insurance giant AIG, and other aspects of managing the current financial crisis. Democrats and Republican members alike have harshly criticized Paulson for the implementation of the bailout plan.
Republicans may also question Geithner’s credentials, as some conservative pundits have already. “He doesn’t have the credentials of other treasury secretaries” or Summers and former Fed Chairman Paul Volcker, also on the short list for the treasury job, said John Berlau, director of the Center for Entrepreneurship at the Competitive Enterprise Institute, a conservative think tank.
Geithner has neither a doctorate in economics (he has a master’s in international economics) nor leadership experience in a major corporation, Berlau noted.
While that doesn’t disqualify him, “the bailouts, whose outcomes are still uncertain, are his only significant accomplishment to put him in line for this position,” Berlau said. “So, they need to be subject to particular scrutiny.”
Critics also say that Geithner’s close connection to the bailout means he’ll just continue down the course charted by Paulson.
But even Paulson’s toughest critics have more hope for Geithner. Alabama Sen. Richard Shelby, the ranking Republican on the Senate Banking Committee and a leading critic of the $700 billion bailout, called Geithner a “breath of fresh air" Sunday on ABC’s “This Week.”
Robert Kuttner, co-founder and co-editor of The American Prospect magazine, said Paulson has been “a complete failure,” but Geithner’s front-row seat means “he can learn from the mistakes.”
Lisa Lerer contributed to this story.