Treasury Secretary Timothy Geithner and President Barack Obama
WASHINGTON – While firmly placing the handling of huge corporate bonuses on Timothy Geithner’s shoulders, President Barack Obama is standing behind his treasury secretary — for now.
“I have complete confidence in Tim Geithner,” Obama said Wednesday as he departed for California.
It’s a statement that wouldn’t need to be made if Geithner’s status was clear. Having a president’s “complete confidence” can be a well-worn political signal that the person allegedly enjoying it should start circulating a resume.
Obama and several aides were answering a question being asked all over Washington: Is Geithner on his way out because of the way he handled the news that American International Group Inc., was about to pay $165 million in post-bailout money to its executives?
The White House, in a nearly constant struggle to project confidence to the markets and the nation, pushed back from the top on down.
“The president has complete confidence,” in Geithner, said presidential spokesman Robert Gibbs.
And White House Chief of Staff Rahm Emanuel categorically dismissed any suggestion that Geithner was in trouble.
Obama spoke as the CEO of AIG, Edward Liddy, was hauled before a House panel for what’s become a ritual shaming of corporate executives for what’s perceived as excesses during the nation’s worst recession since the 1930s.
AIG is the demonized insurance giant now 80 percent owned by the government after getting $170 billion in federal bailout funds. Geithner told senior White House officials about the bonuses last Thursday and they in turn told Obama the same day, according to a timetable provided by the White House.
Geithner sent a flurry of letters to lawmakers Tuesday night on measures he’s taking — including bringing in Attorney General Eric Holder — to try to recover as much of the bonuses as possible.
For the time being, Geithner, formerly president of the New York Federal Reserve Bank, remains a key player in the gargantuan task of slowing the economic downturn.
But his future could soon be as murky as the economy’s. His short tenure has been shaky at a time when the new president and the Democratic-led Congress are trying to project confidence to the markets and the nation.
When asked, Democrats issued statements of support for Geithner that ranged from concise to vague, but none called for his resignation.
Geithner’s nomination was dogged at the start by news that he initially failed to pay $34,023 in self-employment taxes earlier in the decade when he worked for the International Monetary Fund. As treasury secretary, Geithner oversees the Internal Revenue Service.
Although he was confirmed — with a third of the Senate voting against him — Geithner’s rollout of Obama’s stimulus package was widely panned for being short on substance and delivered in a televised statement that made him look younger than his 47 years, and more uncertain. The markets tanked.
Not helping his cause was the news this week that Geithner failed to persuade Liddy to change or cancel plans to pay the bonuses Friday.
Whatever Geithner’s culpability in the AIG debacle, Republicans did much to get the speculation going Tuesday by uttering the “R word,” resignation.
“I don’t know if he should resign over this,” said Sen. Richard Shelby, R-Ala., the Senate Banking Committee’s top Republican.
The White House swiftly hit back, supported by Sen. Chuck Schumer, like Geithner a New Yorker and an early supporter of Geithner’s nomination.
“Secretary Geithner is a capable, smart and dedicated leader of the Treasury Department. He is the right person for the job in these challenging times,” Schumer said in response to a request for comment.
Senate Majority Leader Harry Reid was less concise. Asked how much confidence he had in Geithner, the Nevada Democrat avoided replying directly.
“Let’s talk about what we have accomplished in this Congress,” he suggested.
EDITOR’S NOTE — Laurie Kellman has covered national politics and Congress for The Associated Press since 1997.