Even with new nominations, Geithner is still virtually home alone at Treasury
By: Byron York
Chief Political Correspondent
March 24, 2009
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Late Monday, the Obama White House announced it has finally found a candidate to become the number-two official at the Treasury Department under Secretary Timothy Geithner. Turns out he was in the White House all along.
Neal Wolin, a veteran of the Clinton Treasury Department who last month left his post at the Hartford Financial Services Group to become a White House economic adviser, will now become Deputy Secretary of the Treasury -- if, that is, his various seven-figure bonuses and stock options from Hartford pass populist muster on today's Capitol Hill.
Obama also found candidates for a couple of other top Treasury jobs. But they face what could be weeks of investigation and confirmation proceedings in the Senate. And that means that at this moment -- when we've just had the unveiling of Geithner's long-awaited plan to deal with the toxic assets that still threaten the economy -- it's quite possible we could reach May with just a handful of top officials staffing what is arguably, in this financial crisis, the most important department in the U.S. government.
How has this happened? A lot of people point to vetting standards the Obama White House has imposed on job candidates. Those standards, of course, got much tighter after the case of one Timothy Geithner, who had to pay $48,000 in back taxes and interest before he was confirmed. Now, after Tom Daschle, Ron Kirk, Nancy Killefer, and others, the administration's defenders argue that few job candidates are willing to undergo such intense scrutiny.
"This whole confirmation process…has gotten pretty tough," President Obama said Sunday on "60 Minutes." "A lot of people who we think are about to serve in the administration and Treasury suddenly say, 'Well, you know what? I don't want to go through some of the scrutiny, embarrassment, in addition to taking huge cuts in pay.'"
But that's just part of the story. The bigger problem, I'm told, is the set of new ethics standards the Obama White House has imposed on nominees. The "Revolving Door Ban," announced on Inauguration Day, forbids anyone who serves in the administration from lobbying any top government officials "for the remainder of the administration." With the meaning of "lobby" somewhat unclear, some prospective job candidates are taking the rule to mean that, should they join Treasury and then leave, they can have virtually no contact with the agency where they worked.
"If you talk to any senior alums of the Treasury, especially Democrats, what they will tell you off the record is that the restriction that Obama has created is the real problem," a plugged-in Capitol Hill source told me. "If you sign up for the Treasury Department, once you leave, you can't contact the Treasury Department during the whole administration. It could be two years, it could be six years, if Obama is re-elected. To tell a tax lawyer that they can't contact Treasury or the IRS is to effectively say they can't practice."
Under those restrictive circumstances, the best candidates are academics, with no experience in the real world of business, or older executives, ready to retire after leaving government. People in the prime of their careers -- and deeply involved in the rough-and-tumble financial world -- just aren't interested. They can't be.
So these days the Treasury Department, which should be the center of the universe when it comes to dealing with the financial crisis, is getting along, day to day, on a skeleton crew. Even with the latest appointments, that's unlikely to change anytime soon.
And that puts intense pressure on the man at the top. "You can't really rely on one person to handle both the day-to-day work and the long-term planning for the institution," my well-connected Hill source told me. "There is so much business that runs through there on a daily basis that requires daily decisions."
In his first weeks in office, Timothy Geithner hasn't inspired much confidence. One way to increase confidence would be to surround him with strong people. Yet Obama's new rules have made that harder, not easier. And that makes recovery from this financial crisis harder, too.
Byron York, The Examiner’s chief political correspondent, can be contacted at byork@washingtonexaminer.com. His column appears Tuesday and Friday, and his stories and blog posts can be read daily at ExaminerPolitics.com.
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