Key Obama economic ally yet to make decision on exit

US TREASURY SECRETARY:WASHINGTON – President Barack Obama has asked Timothy Geithner to stay on as US Treasury secretary and a decision is expected soon, officials said yesterday.

Mr Geithner had indicated he might leave once an increase in the debt limit was secured, a milestone reached this week after a long and rancorous debate that took the United States to the verge of a possible default.

Advisers said Mr Geithner has not yet decided whether to depart but would likely come to a decision soon. Just two weeks away from his 50th birthday, he has headed the treasury since January 2009, working at a hectic pace. He has been involved in all the major economic decisions by the Obama administration.

Both Mr Obama and White House chief of staff William Daley have encouraged Mr Geithner to stay, according to a senior administration official.

Mr Geithner has been considering an exit to join his family in New York, where they are moving this month so that his son can finish high school there.

But there is a weighty agenda for the administration to deal with on the economic front, from how to manage budget savings promised as part of the debt-hike deal to potential tax reform – against the backdrop of a wavering, feeble recovery.

When Mr Geithner took office, the economy was in perilous shape and the financial crisis in full swing. As the head of the New York Federal Reserve Bank before joining the administration, he was already deeply involved in battling the downturn. He is now the last member of Mr Obama’s original economic team.

Though the economy is in a recovery, growth is anaemic, financial markets are queasy and acrimony between the administration and opposition Republicans on remedies has intensified.

Mr Obama will run for re-election in November 2012 and has an interest in keeping seasoned hands like Mr Geithner on deck at a time the economy appears to be weakening. With him in place, the administration has a trusted hand familiar with the political battles.

“He’s obviously a key member of the economic team, his service has been extremely valuable to the president, to the administration, to the country,” Mr Obama’s spokesman Jay Carney said.

If Mr Geithner left, the administration would have to find a successor willing and able to withstand the potentially bruising process of winning Senate confirmation. Mr Obama’s opponents could use confirmation hearings as a forum to put the administration’s policies on trial.

No obvious potential successor has emerged, but among names that have been mentioned are Gary Gensler, a former treasury official who now heads the Commodity Futures Trading Commission, Erskine Bowles, who was chief of staff for Bill Clinton, and Jon Corzine, a former chief executive of Goldman Sachs and a former governor of New Jersey.

Mr Daley, with a background in banking and as a former Commerce secretary in the Clinton administration, could also come under consideration, analysts say.