PrintMarch 6, 2009
Not one deputy in place at Treasury (updated)
If the Department of Treasury seems a shambles, there's a good reason. Besides Secretary Geithner, no one who actually has authority to make key decisions has assumed office.
Critics say part of the problem is that Geithner is flying solo: Not one of his top 17 deputies has been named, let alone confirmed. And without senior leadership, lower-level Treasury employees can't make decisions or represent the government in crucial conversations with banks and others.
The keyboard was still warm from typing the above story when news came that one person who was being considered had withdrawn from consideration. .
Annette Nazareth, a former senior staffer and commissioner with the Securities and Exchange Commission, made "a personal decision" to withdraw from the process, according to a person familiar with her decision.
I can't blame her. Taking a pay cut to put Team Obama/Geithner on the resume isn't likely to pay off down the road. Even members of the Obama team are growing restless.
Among the harshest critics of Treasury's leadership vacuum is Paul Volcker, an Obama economic adviser and former Federal Reserve chairman who last week called the situation "shameful.""The secretary of the treasury is sitting there without a deputy, without any undersecretaries, without any, as far as I know, assistant secretaries responsible in substantive areas at a time of very severe crisis," Volcker said. "He shouldn't be sitting there alone."The White House took issue with Volcker's statement, saying Geithner has plenty of able staffers. Former Treasury Secretary Lawrence Summers, Obama's chief economic adviser, has worked closely with Geithner for years.
The problem is that advice is all that the advisors and the career staff can give. They can take information,. answer routine questions from Congress and begin negotiations with various groups but stating what is official policy signing off on the results is the job of the political appointees.
Perhaps Treasury's highest-profile effort — its management of the $700 billion financial system bailout — is still led by Neel Kashkari, a Bush administration holdover who officials said is on his way out.Fratto said that makes it impossible for Kashkari to engage in real negotiations with banks. He said the bailout has been hurt by "uncertainty over what the policy is, the details, whether they're going to stick, whether the programs are going to change again — and these are all things that Neel probably can't answer for them, and no one can answer for them."The concerns are gaining momentum in advance of next week's meeting in London with finance ministers of 20 major countries. Without political appointees to negotiate discussion points or the texts of public statements, the White House will have to take a larger role, former Treasury officials said.
Considering how the White House handled the meeting with British Prime Minister Brown, the idea of them running the meeting with the finance ministers of our trading partners is not reassuring.
Is this going to be the first administration to be declared a failure within its first 100 days? It is beginning to look that way.
Update: The Prowler at American Spectator reports:
Senior White House officials were telling reporters on background last night that Nazareth withdrew from consideration because initial feedback from the Senate on her possible nomination was that she would endure a tough confirmation process due to her role at the SEC directing oversight of market regulation. But associates of Nazareth familiar with the situation say that there were other reasons for her to pull out. "She simply lost confidence in [Treasury Secretary Timothy] Geithner," says a colleague of Nazareth's at the law firm, Davis Polk & Wardwell. "There's a lot of that going around, we hear."Nazareth's decision is doubly embarrassing for the Obama White House because, her husband, Roger Ferguson, current CEO of TIAA-CREFF and former Vice Chairman of the Board of Governors of the Federal Reserve System, currently serves on the Economic Recovery Advisory Board, a post he was given by Obama.
