In the midst of all the attention on John Boehner’s re-election as House Speaker, Bloomberg dropped a small bombshell of its own. According to two sources, Tim Geithner will resign as Treasury Secretary by the end of January, even if the debt ceiling remains unresolved:
Treasury Secretary Timothy F. Geithner plans to leave the administration at the end of January, even if President Barack Obama and congressional Republicans haven’t reached an agreement to raise the debt ceiling, according to two people familiar with the matter.
After giving in to Obama’s previous entreaties to stay as long as needed, Geithner has indicated to White House officials and Wall Street executives that he is unlikely to change his departure plans this time, increasing pressure on the president to name his successor at Treasury, said the people, who requested anonymity to discuss the private discussions.
Geithner, 51, is the only remaining member of Obama’s original economic team and was a key figure in the taxpayer- funded bailouts during the 2008 financial crisis. He’s also had a principal role in negotiations with Congress on the budget deal and in past deliberations over the debt ceiling.
Why the haste? Perhaps he needs the extra time to prepare his tax returns; he’s had problems in that area before.
So who gets the fun job of dealing with the massive borrowing necessary for Obamanomics? Bloomberg reports that chief of staff Jack Lew is the leading choice, but his relative lack of Wall Street experience (outside of two years as a Citigroup exec) makes him more of a political choice than an expert at the economy — hardly the kind of vibe Obama wanted the second time around. Obama was reportedly wooing American Express CEO Kenneth Chenault, but he’s apparently uninterested in leaving home without it.
Needless to say, Geithner’s scheduled departure makes for a tough confirmation cycle with whomever gets the appointment. Confirmation would probably take place at the same time that the debt-ceiling and spending negotiations will take place, and Senate Republicans will have a field day with the nominee during hearings. If Geithner is choosing this inconvenient moment as his departure point, it signals that Geithner might not have the stomach to defend the massive borrowing any longer, and wants to get out of the firing line before the debate really heats up.