WASHINGTON — President-elect Barack Obama intends to name Timothy Geithner, president of the New York Federal Reserve, as his treasury secretary to confront the nation’s intense economic turmoil, senior Democratic officials said today. The stock market soared on the news.
Word of Geithner’s likely selection emerged as New York Sen. Hillary Rodham Clinton, in line to become secretary of state, said through a spokesman that discussions were on track for her appointment but no final arrangement had been made.
Obama plans to announce Geithner’s appointment in Chicago on Monday, barring an unforeseen snag in a background check that is nearly complete, said one of the senior officials, both of whom were familiar with the deliberations.
Obama’s choice for attorney general, a third critical post as the president-elect rounds out his top Cabinet echelon, is Eric Holder, who held the No. 2 slot in the Justice Department in President Bill Clinton’s administration.
If nominated and confirmed by the Senate, Geithner, 47, would assume chief responsibility for tackling an economic slowdown and credit crunch that threaten to create the deepest recession in more than a generation. In his current post in New York, he has played a key role in the government’s response to the financial crisis and has worked closely with Treasury Secretary Henry Paulson and Ben Bernanke, chairman of the Federal Reserve.
As a Treasury Department official during the Clinton administration, Geithner dealt with international financial crises and played a major part in negotiating assistance packages for South Korea and Brazil.
Officials also said New Mexico Gov. Bill Richardson had emerged as a likely pick as commerce secretary, although he had hoped to be secretary of state. Like Clinton, he was a rival of Obama’s for the Democratic presidential nomination last winter. He dropped out after the early contests, though, and soon threw his support behind the eventual winner.
The officials spoke only on condition of anonymity because they were not authorized to publicly discuss the anticipated appointments.
Geithner’s appointment could come as soon as Monday, but it was not clear when Obama intended to formally unveil any of his other picks for the administration that takes office at the stroke of noon on Jan 20. The president-elect has largely stayed out of public view since his election on Nov. 4, preferring to work quietly with aides and Vice President-elect Joe Biden in a suite of offices in downtown Chicago.
One non-Cabinet choice that also has gotten close attention in Washington was announced Friday: where Obama daughters Malia and Sasha would attend school.
The winner: Sidwell Friends School, a private institution that another White House child, Chelsea Clinton, attended in the 1990s.
As for the Cabinet, Obama faces unusual challenges and has moved swiftly in assembling his team. Former President George H. W. Bush made his first Cabinet pick the day after his election in 1988, but former President Clinton did not name any members until after Thanksgiving. The current President Bush’s transition was delayed by the contested result in Florida.
While speculation has been rampant about most top-level appointments, there has been relatively little about Obama’s choice for defense secretary. His aides encouraged speculation before the election that Robert Gates, who now holds the position, would remain in office for an interim period.
Other Cabinet selections so far include former Senate Majority Leader Tom Daschle of South Dakota as secretary of health and human services and Arizona Gov. Janet Napolitano as secretary of the Department of Homeland Security.
Napolitano was an early supporter of candidate Obama among the ranks of Democratic governors, as was Kathleen Sebelius of Kansas. Sebelius has figured prominently in recent days in speculation as possible secretary of labor.
Obama has repeatedly referred to the economic crisis as the top priority for his new administration.
Geithner held posts in the Treasury Department under three administrations and five secretaries before moving to the New York Fed in 2003. He also held positions at the International Monetary Fund and was employed at the private firm of former Secretary of State Henry Kissinger.
The Dow Jones industrials soared by nearly 500 points late in the day, a sharp rise that coincided with first reports of Geithner’s possible appointment.
However, one Wall Street veteran suggested that Geithner’s role in the Bush administration’s bailout program could cause controversy. “I would expect his confirmation hearings to be animated, with some strong opposition asking questions about his involvement in the AIG, Lehman, Goldman, Morgan and Bear decisions by the New York Fed,” said Joshua Rosner, managing director at research firm Graham Fisher &Co. in New York.
Unlike Geithner’s reported selection, the Clinton saga was proving to be one of the longest-running and more public of the secrecy-shrouded search for an Obama Cabinet.
A week ago, the New York senator flew unannounced to Chicago to meet with the president-elect. That gave way to days of negotiations in which her husband, former President Bill Clinton, agreed to disclose the names of donors to his library and charitable foundation in anticipation of the close scrutiny her nomination would be sure to face.
Obama has moved with unusual speed to select officials for his administration. And one Democrat said John Podesta, a leader of the transition team, had told Senate aides on Friday that Obama hoped for speedy confirmation so the new administration could get to work quickly after Jan. 20.
Obama also is filling out the ranks of his White House staff.
He named Patrick Gaspard as his political director. Gaspard was Obama’s national political director during the general election campaign, and has long ties to labor.
Other appointments included: Jackie Norris as chief of staff to first lady Michelle Obama; Catherine M. Russell as chief of staff to Vice President-elect Joe Biden’s wife Jill; Cynthia Hogan, as counsel to the vice president, and Moises V. Vela Jr. as director of administration for the vice president.
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