Courtesy of Tyler Durden
The last rat is preparing to jump from the SS Obamic
GEITHNER SAID TO CONSIDER LEAVING TREASURY AFTER BUDGET DEAL
Explains why the market just ripped.
In the meantime, a cubicle at 270 Park is being prepared.
Treasury Secretary Timothy F. Geithner has signaled to White House officials that he’s considering leaving the administration after President Barack Obama reaches an agreement with Congress to raise the national debt limit, according to three people familiar with the matter.
Geithner hasn’t made a final decision and won’t do so until the debt ceiling issue has been resolved, according to one of the people. All spoke on condition of anonymity to discuss private discussions.
The Treasury secretary has said the U.S. risks defaulting on its obligations if Congress doesn’t raise the $14.3 trillion debt ceiling by Aug. 2. The administration and congressional Republicans are at an impasse in negotiations to raise the limit, which also is tied to efforts to cut the nation’s long- term deficit.
An exit by Geithner would complete the turnover in Obama’s original economic team, with Council of Economic Advisers Chairman Austan Goolsbee scheduled to leave in early August to return to the University of Chicago.
That would leave Obama with two key posts to fill as Republicans are seeking to turn the 2012 election into a referendum on Obama’s handling of the economy and the recovery is slowing. The unemployment rate rose to 9.1 percent in May, according to the Labor Department, and the U.S. economy grew at a 1.9 percent pace in the first quarter, according to Commerce Department figures released June 24.
Geithner, 49, has told associates that he needs a break from government service after dealing with the turmoil that followed the collapse of Wall Street firms including Bear Stearns Cos. and Lehman Brothers Holdings Inc., first as president of the Federal Reserve Bank of New York and then as Obama’s treasury secretary.
Family considerations also are playing a role in Geithner’s deliberations, according to the people. His son has decided to finish his final year of high school in New York.
If Geithner does leave the administration, Obama would be losing a member of his economic team who understands Washington institutions and the New York banking world as well the intricacies of the Chinese economy. Geithner has pressed the Chinese to let their currency appreciate faster to reduce the global imbalances that both he and Obama have blamed for financial uncertainty.
In addition to Goolsbee, who announced his decision to return to the University of Chicago earlier this month, three other top Obama economic advisers already have departed. At the CEA, Goolsbee replaced Romer, who returned to teaching at the University of California at Berkeley last September. National Economic Council Director Lawrence Summers and Office of Management and Budget Director Peter Orszag left the administration last year. Summers returned to Harvard University, and Orszag is now vice chairman of global banking at Citigroup Inc.