Geithner tells Obama he will remain in position as US treasury secretary

WASHINGTON:US TREASURY secretary Timothy Geithner, a central figure in government bailouts of Wall Street banks and efforts to raise the debt limit, has told president Barack Obama he intends to remain in his job, according to a treasury department spokeswoman.

“Secretary Geithner has let the president know that he plans to stay on in his position at treasury, said assistant secretary for public affairs Jenni LeCompte in a statement yesterday in Washington. “He looks forward to the important work ahead on the challenges facing our great country.”

Mr Geithner, the last remaining member of Mr Obama’s original economic team, made his announcement after months of speculation over his future.

He had previously signalled to White House officials that he was considering leaving once the months-long debate over raising the $14.3 trillion federal debt limit was settled. The senate gave final approval to the legislation on August 2nd, the date the treasury gave as the deadline by which the US would exhaust its borrowing authority.

Mr Geithner frequently warned lawmakers that failing to raise the limit could have “catastrophic” consequences for the US economy and said “political theatre” in Congress was delaying action.

“The president asked secretary Geithner to stay on at treasury and welcomes his decision,” said White House press secretary Jay Carney in a statement.

His decision allows the administration to maintain continuity in economic policy at a time of investor concern that the two-year-old expansion may be stalling and after Standard and Poor’s cut the US credit rating for the first time.

“His leaving would have been viewed as negative” following the SP downgrade, said Drew Matus, senior US economist at UBS Securities in Stamford, Connecticut.

The treasury secretary’s challenges for the rest of Mr Obama’s term include reducing unemployment, overhauling the housing-finance system, working with Congress to further cut the budget deficit and helping European leaders contain their debt crisis.

Mr Geithner may find himself in another round of debt-limit debates. The agreement reached in Congress requires that a group of 12 lawmakers submit savings in November involving all parts of government.

He also will be tackling the future of Fannie Mae and Freddie Mac, the housing-finance companies that have drawn about $130 billion in taxpayer support since they were seized by the government in 2008.

Mr Geithner must continue working with European leaders who are trying to manage the region’s debt crisis. – (Bloomberg)