Next Treasury boss will feel power -- and stress

[October 18, 2008]  WASHINGTON (AP) -- The next president's choice of a treasury secretary may well be the most important appointment he'll make - someone to grab the reins of a trillion-dollar-plus program to shore up the world's largest economy, probably in the middle of a severe recession, and at the right hand of a chief executive who'll be a rookie himself.

In normal times, the job can be demanding enough. In an economic crisis, as now, it can be one of the most powerful and stressful jobs in the government. Just ask Henry Paulson, the former investment banker who's made it clear he's not interested in keeping the title.

If not Paulson, then who?

Both Republican John McCain and Democrat Barack Obama showered praise on legendary investor Warren Buffett when asked during a presidential debate whom they might put at Treasury. Buffett says maybe Paulson should stay for a while.

Obama has a couple of Bill Clinton's treasury secretaries as economic advisers: Robert Rubin and Lawrence Summers. McCain has current and former CEOs of major companies, including Meg Whitman of eBay and Carly Fiorina of Hewlett-Packard.

As for Buffett, McCain said when asked in the debate, "He has already weighed in and helped stabilize some of the difficulties in the markets and with companies and corporations, institutions today." Buffet and his company, Berkshire Hathaway, are bailout machines second only to the U.S. government, pumping billions into Goldman Sachs, General Electric and other troubled companies.

Obama agreed that "Warren would be a pretty good choice - Warren Buffett, and I'm pleased to have his support."

It's a little hard to imagine the oracle of Omaha putting his money in a blind trust - or leaving Omaha for that matter. He has previously responded to such suggestions by saying he loves running is company and a government position would be outside his "circle of confidence." Would he respond to an appeal to help his country in a time of need? Who knows.

On PBS' "The Charlie Rose Show" recently, Buffett said Paulson would do the next president a favor by staying in the job at least a year.

Paulson has appeared to rule this out in television interviews, saying he's told both candidates he would "start working with whoever the new treasury secretary is as soon as he is appointed and work to make the transition a first-rate transition."

"There are other folks out there," Obama said when asked specifically about Buffett. "The key is making sure that the next treasury secretary understands that it's not enough just to help those at the top. Prosperity is not just going to trickle down."

Obama and McCain are both surrounded by experienced economic advisers.

Obama's team includes Buffett, former Federal Reserve Chairman Paul Volcker and the two former treasury secretaries, Rubin, now an executive with Citigroup, and Summers.

Summers has been put before the public a lot by the Obama campaign. But he's not without controversy. After serving as Clinton's final treasury secretary, he became president of Harvard. He drew worldwide attention for his comments that biological differences may partly explain the dearth of women among the very highest achieving scientists, a controversy that led to his resignation.

Two seasoned economic professionals who might be tapped for the post regardless of who wins: Timothy F. Geithner, president of the Federal Reserve Bank of New York and Sheila Bair, head of the Federal Deposit Insurance Corp.

Both, along with Paulson and Fed Chairman Ben Bernanke, have played major roles in putting together the government's series of bold steps to restore financial order in a world coming unglued.

Geithner is a registered independent and Bair is a Republican. Also mentioned as a possible contender: JPMorgan Chase CEO Jamie Dimon.

McCain is close to eBay chief executive Whitman - the only other person he mentioned at the presidential debate as a possible treasury secretary. "She knows what it's like to be out there in the marketplace," he said. "She knows how to create jobs."

McCain also counts as a principal economic adviser former Hewlett-Packard CEO Fiorina. The company's board fired her in 2005 after a string of earnings disappointments. She also drew criticism for launching an effort at Hewlett-Packard to identify company employees who were speaking to reporters anonymously.

Texan Phil Gramm, a close friend of McCain and a former Senate Banking Committee chairman, was also considered a possible candidate for Treasury secretary - until he was forced to leave McCain's campaign team during the summer after he decried some Americans as a "nation of whiners."

Two long-shot possibilities if McCain is elected: New York Mayor Michael Bloomberg, a former Democrat, and New York Attorney General Andrew Cuomo, the Democratic son of former Gov. Mario Cuomo. He suggested both of them, as well as Buffett, to head a bailout oversight board.

For Obama, other possibilities include Daniel Tarullo, his top adviser on financial issues, and New Jersey Gov. Jon Corzine, who is a Goldman Sachs alum. Like Paulson.

---

Associated Press Economics Writer Martin Crutsinger contributed to this report.

[Associated Press; By TOM RAUM]

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.