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Rubin won't return to Treasury, boosting Summers' chances

Section: Daily Dispatches

Rubin Removes Himself for Consideration at Treasury

By Michael McKee
Bloomberg News
Thursday, November 6, 2008

NEW YORK -- Former U.S. Treasury Secretary Robert Rubin said he won't be joining the administration of President- elect Barack Obama, narrowing the field of potential candidates to become the next government's top economic official.

Obama is "terrific," Rubin said today in an interview in New York. "But I've spoken with him and told him I'm not interested in going back into government."

Rubin, who served at the Treasury's helm from 1995 to 1999 under President Bill Clinton, has been mentioned as a possibility for several jobs in Obama's cabinet, including his former position. Rubin's decision boosts the chances for former Treasury chief Lawrence Summers and New York Federal Reserve Bank President Timothy Geithner.

Rubin, 70, advised Obama on economic issues during the presidential campaign. He said today that he told Obama he would consider taking on special projects.

The outgoing Treasury secretary, Henry Paulson, pledged in a statement today to ensure a "smooth and effective" changeover to Obama's team. President George W. Bush's administration ends on Jan. 20.

Former Fed Chairman Paul Volcker, another Obama adviser who may be in contention to succeed Paulson, also has experience in leading special initiatives.

... Special Project Role

Volcker, who left the Fed in 1987, headed panels that investigated money lost by Holocaust victims, the oil-for-food program that the United Nations ran in Iraq, and corruption in World Bank loans.

The Treasury post will be an especially important Cabinet position in the Obama administration, with financial markets only starting to stabilize after the turmoil of recent months and the economy heading into what may be the deepest recession in decades.

Democrats in Congress also intend to push an overhaul of the financial industry next year, an operation for which Obama will likely need a seasoned leader at the Treasury, or any special post that oversaw the effort.

Volcker said in September that the financial system was "broken" and "dysfunctional" after the collapse of the subprime-mortgage market caused the worst credit crisis in decades.

Obama is expected to move quickly in choosing an economic team.

... Summers' Odds

Summers, who succeeded Rubin and is now a professor at Harvard University, is favored to return to the post, people close to the president-elect have said.

Summers, 53, was also an adviser to Obama during the campaign, and helped design the candidate's economic program. He would bring experience and familiarity with markets and global leaders, helping to ensure a smooth transition.

Geithner, 47, is also a veteran of the U.S. Treasury. As assistant secretary for international affairs, he negotiated with Asian governments during the financial crisis of 1997 and 1998. He worked closely this year with Fed Chairman Ben S. Bernanke in the central bank's rescues of Bear Stearns Cos. and American International Group Inc.

New Jersey Gov. Jon Corzine, like Rubin and current Treasury Secretary Henry Paulson a former head of Goldman Sachs Group Inc., yesterday said he wouldn't rule out accepting the Treasury post, while predicting he wouldn't get it.

Corzine said in a Bloomberg Television interview yesterday that the next Treasury chief's top jobs will be getting a fiscal stimulus enacted and deploying part of a $700 billion financial-rescue package to help homeowners.

"The next secretary is going to have to be a crisis manager and plan for the future," said Rubin, who has worked at Citigroup Inc. since leaving the Treasury and is now a senior counselor at the New York-based lender. "He'll have to operate on two fronts at the same time."

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