Don't Look for Geithner to Go

Chris Cillizza argues that proxies on the Sunday shows need to make the case for Tim Geithner this weekend, or else.

Treasury Secretary Timothy Geithner, under fire for his handling of the bonuses paid to AIG executives, faces a critical weekend as he fights to remain as the Obama administration's lead economic spokesman.

Although White House senior aides insist that Geithner is perfectly secure in his post, the fact that President Obama and White House press secretary Robert Gibbs both saw fit to express their "complete confidence" in him over the last 96 hour speaks to the level of concern in the administration about the situation.

In the very same post, though, Cillizza quickly surmises that Geithner's job is safe.

Given the Obama Administration's demonstrated skepticism about the shark tank that is politics in the nation's capital, it's hard to see them making what they would regard as a knee-jerk decision on Geithner. Barring any other future bombshells, the treasury secretary is likely to stay in his post for the foreseeable future.

Hmmm. I think the whole point of the post is to whet appetites for the Sunday shows, and not actually to speculate on Geithner's job security.

And while I think the Treasury secretary's image could use a little polish after a rough week, I certainly don't believe Geithner's job is on the hook, at least not this week. Obama can't afford to lose his Treasury chief right now. Firing Geithner (or caving to calls for resignation) would be the equivalent of throwing a stick through the spokes of the whole administration velocipede. Not to mention, losing the Treasury chief would panic the markets. That's one thing you can count on the administration not to do right now.

But chatter about canning the Treasury secretary amid a swirling banking crisis makes for high drama, right? And good ratings?

Cillizza perhaps has forgotten that this is the "no drama" president.

So where is Cillizza's rationale for throwing so much scrutiny on the secretary's job security?

[T]his weekend will play a role -- perhaps a major one -- in shaping public perception about Geithner. Can the administration prove the chattering class wrong again?

If I read that correctly, then Cillizza is priming the pump for Obama's talking warriors to go out and exonerate Geithner and endear the Treasury Secretary to the nation.

I look at this differently. Geithner is a key player, but this is the president's rescue. If proxies do their jobs we won't be talking too much about Geithner this weekend, we'll be talking convincingly about what comes next. Health care. Energy. Education reform.

Really, that's what's at stake. If the administration gets bogged down in the banking crisis and can't solve that problem, then the "failure" Republicans will show that politics as usual is still alive and strong in Washington. The administration won't be able to avoid all conversation about the AIG bonuses, and needs to spend some airtime taking those questions head on and answering bluntly: some stinky deals were made. But progressives who are tweaked at the Geithner/Summers duo for economic affairs also should not be rooting for Geithner's removal, even if Geithner's relationships with the banking industry appear too cozy at times. Losing Geithner is the one thing right now that's sure to jar the administration and stall the momentum on health care. Watch Treasury fail, and this congress will lose the stomach for comprehensive health care reform and the big spending that our schools and energy infrastructure will demand as well.

So I'm looking for the administration to gut this out. It's ugly, and it might take some bare knuckles, and the administration will probably get its nose bloodied, and progressives won't be happy and neither with the newly minted bloc of centrist Dems who are vulnerable already come election season, but don't look for Geithner to go anywhere.

Time: Treasury Knew About AIG Bonuses Prior to Geithner Claims

Yesterday I wrote about the uncomfortable position in which Chris Dodd finds himself over the language of the loophole that paved the way for the current AIG retention bonus scandal. And I intimated that Treasury Secretary Tim Geithner is quickly becoming the target of my ire.

Via TPM, Time magazine reported yesterday that Treasury staffers were informed about the AIG bonuses on February 28 in a memo from the New York Federal Reserve. Geithner spoke to congressional leaders this week and said he first knew about the bonus plan on March 10. Uh oh.

If Time's telling of the details is correct, then Geithner is on the hook for what his staff--insomuch as it exists--didn't communicate up the line. That's the best-case scenario. It's gonna look much worse if Geithner did get the message and misrepresented key chronology before congressional leaders.

To be fair to Mr. Geithner, he still does not enjoy the benefit of a full staff. And to make matters worse, he can't just go out and hire the most qualified people he knows, because those people either a) owe taxes on nannies or employed an illegal immigrant once or b) are connected to the key financial entities at the middle of this debacle. Should Treasury jump to make quick hires, the appearance of (further) tolerance for tax cheats or coziness with consultants to the recently-tarred banking industry would not work in the Administration's favor. Adding insult to injury, the handful of people who actually get named for posts at Treasury seem consistently to eliminate themselves from consideration.

So I get it that the flow of information at the Treasury might be rough. But that's not an excuse that'll fly before Congress.

What's more, the article points out that the memo from NY Federal Reserve to Treasury was sent three days before the Administration ponied up an additional $30 billion in bailout funds to AIG. That emergency arrangement may have been too far advanced to be stopped over a trifling $160 million in fine print, but taxpayers are looking to the Obama Administration to protect bailout funds before those funds can be scattered to the four winds.

And Obama?

Geithner received solid backing from President Barack Obama on the South Lawn on Wednesday before the President left for California. "I have complete confidence in Tim Geithner and my entire economic team," Obama said. "Nobody is working harder than this guy. He is making all the right moves in terms of playing a bad hand."

All right. My impression of the president is still more favorable than my impression of the secretary. But if Treasury's (mis)management of bailout negotiations continues to decompose before our eyes, then the White House is very much on the hook as well.