US Politics

Obama to decide who will replace Timothy Geithner and Hilary Clinton

Finding a new treasury boss and secretary of state top the agenda in reshuffle of top officials

PUBLISHED : Friday, 09 November, 2012, 12:00am
UPDATED : Friday, 09 November, 2012, 3:57am

US President Barack Obama now confronts two questions that he has been avoiding for more than a year: who will replace Treasury Secretary Tim Geithner and when?

Obama's decision, probably among the first personnel moves he makes, may set in motion a revamping of his economic and national security team, according to four current and two former administration officials. Some advisers will depart and others will take on jobs that are opened up.

"The first thing is Treasury," said former White House chief of staff Bill Daley. "You kind of have to figure out that one before everything else."

After becoming only the second president since the second world war to win re-election with the unemployment rate above 6 per cent, Obama will be shuffling his cabinet and senior staff while negotiating with Congress to avoid US$607 billion in automatic tax increases and spending cuts that threaten to stunt US economic growth.

As well as replacing Geithner, Obama faces the departure of Secretary of State Hillary Rodham Clinton, who has said she is not planning to serve in a second Obama term.

Defence Secretary Leon Panetta, at 74 the oldest Cabinet member, hasn't indicated if he'll stay, while US Trade Representative Ron Kirk has said he doesn't intend to serve in a second Obama administration.

The timing of Geithner's replacement depends on whether the White House can reach an agreement with the lame duck Congress on a deficit reduction plan to avoid triggering spending cuts and tax increases known as the "fiscal cliff". If a deal can be reached before the January 1 deadline, Geithner might leave as soon as it is completed.

If the solution is left for the next Congress, Obama may ask Geithner to stay, either to work on a deal or to reassure financial markets about the US government's ability to trim the deficit.

"If they get a deal, he'll stay until early January," Daley said. "If not, they have to wait until they have someone announced and probably confirmed."

Once Obama settles on a new Treasury secretary, other jobs, including chief of staff, National Economic Council director and Office of Management and Budget director, can be filled, said the four current officials.

One of the top potential candidates for the Treasury job is White House Chief of Staff Jack Lew, the officials said.

The leading candidates to succeed Clinton as secretary of state may be Massachusetts Senator John Kerry and United Nations Ambassador Susan Rice, according to the four officials.