Geithner has fared better as the financial system has stabilized, emerging as one of Obama’s most trusted confidants.
Bloomberg News first reported Thursday evening that Geithner has signaled to the White House that he is considering leaving.
A new Treasury secretary would need a mix of political and diplomatic skills to simultaneously manage tense and delicate negotiations on deficit reduction at home, an ongoing debt crisis in Europe, and the evolution of a tricky economic relationship with China.
And while experience in the financial industry has long been viewed as preparation for the job of Treasury secretary, in the post-crisis era a Wall Street pedigree could prove toxic.
In the past, analysts have discussed Roger Altman, an investment banker and deputy Treasury secretary in the Clinton administration, and Erskine Bowles, a former Clinton chief of staff who co-chaired Obama’s deficit reduction commission, as possible candidates for the top Treasury post. Another Democratic economist popular with business is Laura Tyson, a business school professor at the University of California at Berkeley who served as chairman of the Council of Economic Advisers under Clinton.
Inside the Obama administration, budget director Jacob J. Lew or chief of staff William M. Daley could be viewed as qualified for the job, but the appointment of either would leave another big hole to fill. Gary Gensler, the chairman of the Commodity Futures Trading Commission, could also emerge as a candidate. Sheila Bair, the outgoing chairman of the Federal Deposit Insurance Corp., would be a dark-horse candidate.
The president may yet convince Geithner to stay. Any nomination hearing could raise the specter of a protracted and nationally televised confirmation hearing unfolding in the midst of the 2012 election campaign.
“It’s going to be an opening for the Republicans to put the Obama economic policies on a big public trial,” said Kevin Hassett, an economist at the conservative American Enterprise Institute. “Because of that, it’s likely to be one of the more dramatic confirmations in modern history.”
Geithner is the only Treasury secretary to have essentially launched his career at the agency. He was a mid-level staffer when then-Treasury Secretary Robert Rubin plucked him for a high-profile job in the 1990s. He rapidly rose through the ranks.
After the Clinton administration, he served at the International Monetary Fund and as head of the Federal Reserve Bank of New York, where he oversaw both the collapse and the first stages of the rescue of Wall Street.
When he interviewed with Obama to be Treasury secretary, he made the case against joining the administration, saying he would be at odds with Obama’s “change” message. But Obama selected him anyway.
Jared Bernstein, former economic adviser to Vice President Biden, said finding a nominee to replace him could be a challenge, given the confirmation process. Asked who might step up, Bernstein joked, “A very smart, well-versed economic masochist.”
Staff writers Neil Irwin and Peter Wallsten contributed to this report.