Facing 'Fiscal Cliff,' Obama Would Quickly Fill Treasury Job

 Updated October 1, 2012, 11:32 a.m. ET

By DAMIAN PALETTA

WASHINGTON—If re-elected, President Barack Obama is expected to move quickly in November to nominate a new Treasury secretary, and that person could play a key role negotiating with Congress about the looming "fiscal cliff" of tax increases and spending cuts, people familiar with the planning said.

Possible Contenders for Treasury Secretary

 

Associated Press

Obama may consider White House Chief of Staff Jacob Lew

 

Associated Press

Budget expert Erskine Bowles is another Democratic possibility.

 

Reuters

Romney could pick Former World Bank President Robert Zoellick.

 

Bloomberg News

Another Republican possibility is Glenn Hubbard of Columbia.

The two people most frequently mentioned by current and former administration officials as likely successors to Treasury Secretary Timothy Geithner, who wants to leave the post, are White House Chief of Staff Jacob Lew and Clinton administration Chief of Staff Erskine Bowles.

If re-elected, President Barack Obama is expected to move quickly in November to nominate a new Treasury secretary. Damian Paletta joins Markets Hub to discuss the names being considered as successors.

Both are steeped in the minutia of the federal budget and have worked extensively on tax and spending negotiations with Republicans. Mr. Lew served as White House budget director in the Clinton and Obama administrations. Mr. Bowles was co-chief of the White House's 2010 deficit-reduction commission, which won bipartisan support for a plan to reduce the budget gap by roughly $4 trillion over 10 years.

Mr. Obama didn't embrace the commission's full conclusions, which Mr. Bowles continues to promote among corporate and political leaders.

If Republican candidate Mitt Romney wins, negotiations on the "fiscal cliff" could be pushed off until 2013. Both Democrats and Republicans have said Congress is expected to postpone the spending cuts and tax increases until after Mr. Romney's would- be inauguration in late January and once he has time to put an economic team in place.

Among the Republican's possible candidates to lead the Treasury are Columbia University Graduate School of Business Dean Glenn Hubbard, former World Bank President Robert Zoellick and executives from the business world, such as CIT Group Inc. Chief Executive John Thain and former Wells Fargo & Co. CEO Richard Kovacevich, say people who have spoken to Romney advisers. 

Should Mr. Obama win, the quick nomination of either Mr. Lew or Mr. Bowles would signal that the White House has placed as a top priority reaching a budget agreement with Congress, rather than a focus on financial markets or Europe.

This is because large spending cuts and tax increases are set to begin Jan. 2, 2013, unless the White House reaches a deal with Congress. Democrats and Republicans remain sharply at odds over how to contend with the looming fiscal changes, and the White House's economic team would be forced to scramble to reach a deal in time.

Mr. Obama likely would have much less time to assemble a negotiating team than Mr. Romney, one reason why advisers believe he could either select as Treasury secretary someone from within his administration or already well known to his team.

Mr. Geithner has made clear for more than a year that he plans to leave his post but has said he would remain until a successor is confirmed, should Mr. Obama win re-election.

Another possible choice for Mr. Obama's Treasury secretary, according to current and former officials, is Gene Sperling, director of the White House's National Economic Council and a veteran of the Clinton administration's economic team, though his name also comes up as a possible director of the White House's Office of Management and Budget.

Bruce Reed, Vice President Joseph Biden's chief of staff, is another candidate to lead OMB, the budget division of the White House that creates tax and spending proposals for the government. Mr. Reed was executive director of the deficit-reduction panel run by Mr. Bowles and Republican Alan Simpson. Another possible contender for OMB chief is Rob Nabors, the White House's chief liaison to Congress.

Other candidates for Treasury secretary under a second Obama term include Deputy Treasury Secretary Neal S. Wolin and Lael Brainard, the Treasury's top official for international affairs.

If Mr. Obama decides to look outside the administration for someone to lead the Treasury, he may seek a person with financial-market experience, such as BlackRock Inc. Chief Executive Lawrence Fink. Mr. Fink, who interacts frequently with Wall Street and Washington officials, spoke often with Mr. Geithner during the first six months of 2012, according to Mr. Geithner's calendar.Others who could be considered are Daniel Doctoroff, chief executive of Bloomberg LP, and Roger Altman, chairman of Evercore Partners Inc., an investment banking advisory firm, who served as deputy Treasury secretary in the Clinton administration.

The potential nominees by Messrs. Obama and Romney either declined to comment or didn't respond to requests for comment.