Treasury Secretary Timothy F. Geithner finds himself in afamiliar position: eager to resume life outside government andfacing contentious negotiations with Congress over raising thefederal debt ceiling.

The last time he was in this predicament, in June 2011,President Barack Obama persuaded him to stay. This time, Geithnerhas indicated to White House officials he wants to carry throughwith his plan to leave the administration by the end of this month,even if a deal on the debt limit isn't in place, according to twopeople familiar with the matter

Geithner's departure would increase pressure on the president toname his successor at Treasury. White House Chief of Staff Jack Lewremains the leading contender for the Treasury job, according tothe people, who requested anonymity to discuss the privatetalks.

Geithner, 51, is the only remaining member of Obama's originaleconomic team and was a key figure in the taxpayer- funded bailoutsduring the 2008 financial crisis. He's also had a principal role innegotiations with Congress on the budget deal and in pastdeliberations over the debt ceiling.

Because Lew's experience in financial markets is thin, Obama mayseek to name a Wall Street executive as deputy Treasury secretary,the people said.

While Lew, 57, worked as a managing director for Citigroup fromJuly 2006 until the end of 2008, he's spent most of his career ingovernment. He has served as director of the Office of Managementand Budget for both Obama and President Bill Clinton. Prior tothat, he was an aide to the late Tip O'Neill, former speaker of theU.S. House.

Administration officials had approached American Express Co.Chief Executive Officer Kenneth Chenault about joining Obama'ssecond-term cabinet, possibly as Treasury secretary. Chenault hasindicated to the administration he isn't interested in leaving theprivate sector, according to one of the people, and a spokesmansaid he plans to stay at the company.

“Ken has no plans to leave American Express,” said MichaelO'Neill, a spokesman for New York-based company, declining furthercomment.

A White House spokeswoman, Amy Brundage, declined to comment onpersonnel matters. Jenni LeCompte, a Treasury spokeswoman, alsodeclined to comment.

Obama will have several top administration jobs to fill as hebegins his second term.

New Cabinet

He's already nominated Senator John Kerry to replace HillaryClinton as secretary of state. Lisa Jackson, the head of the U.S.Environmental Protection Agency, announced on Dec. 27 that she willstep down. Obama also will be choosing new secretaries of defenseand commerce, U.S. trade representative and Central IntelligenceAgency director.

The administration's next battle will be over the government'sdebt limit as soon as next month. After reaching an eleventh-hourbudget deal that averted more than $600 billion in tax increasesand spending cuts earlier this week, Republicans in Congress havesaid they will use the debate over raising the $16.4 trillion debtceiling to force concessions from Obama on spending and entitlementprograms.

“This is a pressure point; we should use it,” RepublicanRepresentative Scott Rigell said on Bloomberg Television today. “Iwant Democrats to help us on this. We're all in this together. Wecan't continue to spend at this rate.”

Obama on Jan. 1 said he wouldn't bargain over the debt ceilingand warned that the consequences of not raising the government'sborrowing authority “would be catastrophic.”

Geithner told Congress on Dec. 31 that the U.S. hit itsstatutory debt limit, necessitating emergency steps announced lastweek to keep funding government operations and avoid default. Byrelying on the “extraordinary measures,” Geithner has said Treasurycan create about $200 billion of “headroom” to avoid a possibledefault.

The next Treasury secretary will have a major role innegotiating the debt limit deal with Congress, said Ann Mathias,director of Washington research for Guggenheim Securities LLC.

“Washington is turning from taxes to spending, which willdominate the view for the next quarter,” Mathias said in an e-mail.For the Treasury secretary, completing a deal “will take anenormous amount of his, or her, time and involve the same back andforth between tables that we saw during the tax deal.”

Debt Debate

Republicans, as well as some of the president's allies, sayObama will have little choice about the link between the budget andthe debt-ceiling debate.

February will bring negotiations over cutting spending andfunding the government, along with the debt limit, said PeterOrszag, Obama's first Office of Management and Budget director.

“Whether the debt limit is technically included in thenegotiations or not therefore doesn't really matter,” he said in ane-mail. “A deal will have to be struck over other spending itemsanyway, and part of the ultimate deal will have to be an increasein the debt limit.”

Geithner told the president in June 2011 that he wanted to leavethe administration and return to New York. With the European debtcrisis threatening global growth and a fight over the debt ceilinglooming, the president persuaded him to stay through the end of hisfirst term.

Since then, Geithner has made no secret of his desire to leavehis post as soon as possible.

In a Nov. 16 interview for Bloomberg Television's “PoliticalCapital With Al Hunt,” Geithner said he will stay in his post untilObama's inauguration, and he brushed aside suggestions that hemight stay longer if a successor isn't confirmed by then.

He said he's “very confident that we're going to get enough donein these next few weeks” and that Obama will “have a successor inplace so I'll be able to go off and do some other things.”

Bloomberg News

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.