Geithner mulls departing Treasury post: sources

Posted on June 30, 2011


Glenn Somerville
Reuters US Online Report Top News
Jun 30, 2011 19:00 EDT

WASHINGTON (Reuters) – Treasury Secretary Timothy Geithner is considering stepping down later this year, but will not make any decision until after debt limit negotiations conclude, people familiar with his thinking said on Thursday.

A U.S. Treasury official confirmed that Geithner has not yet made a decision.

Asked about his future plans at an event in Chicago, Geithner said: “I’ve only worked in public service. I live for this work. It’s the only thing I’ve ever done, I believe in it.

“We have a lot of challenges as a country, and I’m going to be doing it for the foreseeable future,” he said.

Bloomberg News, which first reported the story, cited unnamed sources as saying that family considerations were among the factors Geithner was weighing. ABC News reported that there “are far too many caveats” to say Geithner will definitely depart.

Politics could weigh on Geithner’s decision-making. If he does not depart in late summer or fall, he could feel an obligation to stick with President Barack Obama through what may be a difficult campaign for reelection in 2012.

A person familiar with Geithner’s thinking said the Treasury chief realizes he might have a window to potentially depart after a deal to raise the debt limit and reduce U.S. deficits is reached.

Geithner, 49, emphasized his commitment. “People are a little worried or interested because I have a family, my son’s going back to New York to finish high school and I’m going to be commuting for awhile,” he said while speaking at a conference in Chicago. “But I’m going to be doing this for the foreseeable future.”


Geithner, who led the New York Federal Reserve Bank before joining the Obama administration, is the last remaining top member of Obama’s original economic team.

Austan Goolsbee, chairman of the Council of Economic Advisers, is planning to leave in August. Larry Summers departed late last year as director of the National Economic Council.

Goolsbee told CNBC that news of Geithner’s potential departure was “a bit of a surprise.”

“I know his overwhelming focus is to get this debt ceiling and deficit reduction worked out,” Goolsbee said.

Geithner has been warning all year of catastrophic consequences if Congress fails to increase the $14.3 trillion statutory borrowing limit. He has said the Treasury will no longer be able to pay all the nation’s bills — including interest on the national debt — after August 2.

On Thursday, Geithner, speaking with former President Bill Clinton at a conference of the Clinton Global Initiative in Chicago, said it would be “unthinkably damaging to the economy” if Congress did not raise the debt ceiling.

Geithner has spent most of his career in the public sector and does not have a university position or banking job waiting for him. At the New York Fed, he presided over collapses and bailouts of major Wall Street banks and insurer American International Group.

As Treasury secretary he has spent much of his tenure under fire. He took the helm at Treasury during the depths of the recession in February 2009 by announcing a plan to cleanse bank balance sheets of toxic assets, but the proposal was panned as cursory and markets plunged.

A year later, some lawmakers were calling for his ouster over his handling of the AIG bailout. This year, he has taken heat over slowing job growth and an ineffective housing rescue program.

Clinton, whom Geithner served under at Treasury in the 1990s, offered fulsome praise at the event at Chicago on Thursday, where he quizzed the Treasury secretary on issues ranging from debt to housing to taxes.

“Unlike most people who get this job, who made a lot of money in business or in finance, he has spent most of his life serving the rest of us and in the process has acquired an enormous amount of expertise and knowledge to go with a considerable amount of common sense,” Clinton said. “I think he’s done a great job in a back-breaking position.”

(Additional reporting by Glenn Somerville, Rachelle Younglai and David Lawder in Washington, and Ann Saphir in Chicago; Writing by David Lawder; Editing by Leslie Adler)

Source: Reuters US Online Report Top News

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