Does GOP's Win Mean Geithner Will Lose His Job?

WASHINGTON — With the GOP's sweeping victory in the mid-term elections, observers were already questioning the fate of Treasury Secretary Tim Geithner in the new Congress.

In exit polling, most voters ranked dissatisfaction with the economy as a key factor guiding their decision. Since Geithner is one of the few members of the White House economic team still in place, analysts said House Republicans are likely to target him when they take control next year and press for his removal.

Some suggested Obama could jettison Geithner as a sign he is willing to change his approach.

"Geithner could be in the way of making a clean break with the past,” said William Longbrake, an executive in residence at the University of Maryland. "If Obama does want to secure his 2012 election bid, then that argues for changing the economic team."

Josh Rosner, a managing director of the research firm Graham Fisher & Co., said Geithner's future depends on whether the economy improves soon.

"Last night was a referendum on Tim Geithner as much as the administration,” he said. "The economy is mired in structural problems and I don't think the administration's support of Tim Geithner can last another year unless the economy can genuinely grow.”
Most of Obama's economic team are already out the door. Lawrence Summers, the director of the National Economic Council, has said he would leave after the elections.

Peter Orszag, director of the Office of Management and Budget, and Christina Romer, the head of the Council of Economic Advisers, have also left the administration. 

But a White House official denied Wednesday that Geithner was leaving.

"Secretary Geithner isn't going anywhere and remains one of the President's closest advisors - and post election, most immediately," the official said. "Secretary Geithner is going to play a very important role during the President's trip to Asia, specifically at the G20."

Still, at the very least, Geithner's job is going to be tougher. John Boehner, who is expected to be Speaker of the House, has already called for his resignation.

Obama "should ask for and accept the resignations of the remaining members of his economic team starting with Secretary Geithner," Boehner said in August.

Chris Whalen, managing director at Lord, Whalen LLC's Institutional Risk Analytics, said Republicans are going to use this opportunity to attack Geithner.

"They are going to tear him to pieces," Whalen said. "The fact that Republicans control the House, Geithner is going to be savaged.”

Richard Carnell, associate professor of law at Fordham University School of Law and a former Treasury assistant secretary, said Geithner could decide to leave of his own accord, given his likely hostile reception by Congress.

"Geithner will have less reason to stay," Carnell said. "He'll face more hassles, acrimony, investigations, disrespect, and blame. He'll still have a great job. He'll still have wide leeway in his forte, international economic policy, but life will become harder, especially life as a Republican scapegoat. Championing the administration's tax and budget policies will become unpleasant."

But Brian Gardner, a political analyst for KBW Inc.'s Keefe, Bruyette & Woods Inc., said now would be the wrong time for Geithner to leave.

"Treasury has a new role as a banking regulator and the implementation of Dodd-Frank and the chairmanship of the [Financial Stability Oversight Council] is critical,” he said. "I think the administration would be adding to their list of things to do to get a new secretary and get him confirmed all the while implementing Dodd-Frank. From their perspective, it's probably the worst time to replace Geithner."

Jaret Seiberg, financial service policy analyst for the Washington Research Group, said Geithner may stay simply because of a lack of a clear alternative.

"We think Geithner stays because you don't get rid of Treasury secretary unless you have a candidate in waiting and it's hard to see who that candidate would be," he said. "The question is who can you get confirmed in that post."

Lawrence Kaplan, a lawyer at Paul, Hastings, Janofsky & Walker LLP, also said having a viable replacement is a high consideration of whether Geithner stays.

"The big concern I have is who could get confirmed,” he said. "It would not be a good sign for the economy to have him leave without being able to fill that vacancy."

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