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| Enduring Favorite for the Fed | |
| (35 minutes later) | |
| WASHINGTON — As President Obama turned to second-term job openings soon after his re-election, the topic one day in the Oval Office was probably the most important economic decision he would make: Who should succeed the Federal Reserve chairman, Ben S. Bernanke, after 2013? | WASHINGTON — As President Obama turned to second-term job openings soon after his re-election, the topic one day in the Oval Office was probably the most important economic decision he would make: Who should succeed the Federal Reserve chairman, Ben S. Bernanke, after 2013? |
| The president’s preference: His former economic adviser, Lawrence H. Summers. | The president’s preference: His former economic adviser, Lawrence H. Summers. |
| Mr. Obama, well aware of Mr. Summer’s love-him-or-hate-him reputation and the trouble he could face winning Senate confirmation, reasoned that it was hardly too soon to think about courting senators, even if a final decision on a nominee was nearly a year off. Shifting from his confidants — Treasury Secretary Timothy F. Geithner and the man who soon would succeed him, the White House chief of staff, Jacob J. Lew — the president gave Rob Nabors, then his liaison to Congress, the Summers project. | Mr. Obama, well aware of Mr. Summer’s love-him-or-hate-him reputation and the trouble he could face winning Senate confirmation, reasoned that it was hardly too soon to think about courting senators, even if a final decision on a nominee was nearly a year off. Shifting from his confidants — Treasury Secretary Timothy F. Geithner and the man who soon would succeed him, the White House chief of staff, Jacob J. Lew — the president gave Rob Nabors, then his liaison to Congress, the Summers project. |
| “He needs to do some work on the Hill,” Mr. Obama said, according to people with knowledge of the meeting. “You need to work with him, Rob.” | “He needs to do some work on the Hill,” Mr. Obama said, according to people with knowledge of the meeting. “You need to work with him, Rob.” |
| Months later, decision time is here, and Mr. Obama still has not settled on Mr. Summers or Janet L. Yellen, the economist he named to be Fed vice chairwoman in 2010. | |
| Yet as that Oval Office exchange shows, the president has long had Mr. Summers in mind — and still has him in mind — to become the world’s most powerful central banker. The relationship is based on an intellectual partnership that dates to the 2008 campaign and was “forged in the crucible of the financial crisis,” as the longtime Obama strategist David Axelrod put it. | |
| A former administration official, who like most others did not want to be identified speaking of such a sensitive matter, said, “It’s like the attachment you feel for your heart surgeon after he performs a quadruple bypass.” | |
| But as that Oval Office meeting last year also suggests, Mr. Obama’s one concern about nominating Mr. Summers has been the potential for a Senate battle — not only from Republicans spoiling for fights, but also from Democrats who view Mr. Summers as having been too friendly toward deregulating big banks when he was Treasury secretary in the Clinton administration. | |
| That concern about confirmation has been affirmed in recent weeks as bloggers and groups on the left have mobilized, either to oppose Mr. Summers outright or to urge Mr. Obama to pick Ms. Yellen to be the first female Fed chairman. Mr. Summers declined to comment for this article. | That concern about confirmation has been affirmed in recent weeks as bloggers and groups on the left have mobilized, either to oppose Mr. Summers outright or to urge Mr. Obama to pick Ms. Yellen to be the first female Fed chairman. Mr. Summers declined to comment for this article. |
| The president has already interviewed Mr. Summers and Ms. Yellen for the job, as well as Donald L. Kohn, a former Fed vice chairman, aides say. But administration insiders say they believe Mr. Obama remains inclined to nominate the man who, as his chief economic adviser through 2009 and 2010, helped him through the worst global financial crisis since the Depression. | |
| Mr. Summers’s edge, the insiders say, reflects that relationship and not any arguments against Ms. Yellen, whom Mr. Obama does not know well. And they do not rule out another candidate, though no other names are known to be in the mix. | |
| Many current and former presidential advisers also favor Mr. Summers, including several who had run-ins with him on policy or chafed at what many call his condescension and arrogance. But they say Mr. Obama knows Mr. Summers so well that he does not need their input. | |
| Among the people the president is said to have consulted are Mr. Geithner, Mr. Lew and Mr. Axelrod. The list also includes Mayor Rahm Emanuel of Chicago, Mr. Obama’s first chief of staff and a Summers advocate, and Denis R. McDonough, the current chief of staff. (Aides say Mr. McDonough has stayed neutral.) Two of the most influential advisers on the nomination are the deputy chiefs of staff, Mr. Nabors and Alyssa Mastromonaco, given their knowledge of Senate confirmation politics. | Among the people the president is said to have consulted are Mr. Geithner, Mr. Lew and Mr. Axelrod. The list also includes Mayor Rahm Emanuel of Chicago, Mr. Obama’s first chief of staff and a Summers advocate, and Denis R. McDonough, the current chief of staff. (Aides say Mr. McDonough has stayed neutral.) Two of the most influential advisers on the nomination are the deputy chiefs of staff, Mr. Nabors and Alyssa Mastromonaco, given their knowledge of Senate confirmation politics. |
| Also influential — and described as the one insider pulling for Ms. Yellen — is Valerie Jarrett, the president’s close adviser and a longtime Chicago friend, who had a cool relationship with Mr. Summers. | |
| An announcement had been possible next week, aides said, until plans for the debate in Congress over military intervention in Syria scrambled the timing. While Mr. Bernanke’s four-year term — his second — does not end until Jan. 31, a decision on his successor is needed soon because Senate confirmation hearings and votes take time. | |
| Neither Mr. Obama nor Congress can afford much time or controversy. In addition to Syria, they will be battling through the fall over two other must-act matters: financing the government by the Oct. 1 start of the fiscal year to avoid a shutdown, and increasing the nation’s borrowing limit by mid-October to maintain the nation’s creditworthiness and avert an economic crisis. | |
| Also, Fed insiders, markets and America’s allies are eager to know who will be heading the central bank in the next four years, particularly as it weighs winding down the expansionary monetary policy that Mr. Bernanke engineered to sustain the economic recovery. | Also, Fed insiders, markets and America’s allies are eager to know who will be heading the central bank in the next four years, particularly as it weighs winding down the expansionary monetary policy that Mr. Bernanke engineered to sustain the economic recovery. |
| The criticism of Mr. Summers is familiar in Washington. His widely acknowledged intellect is offset by imperiousness that makes him hard to work with, some of his opponents say. At the Clinton Treasury, others say, he contributed to the later financial crisis both by supporting repeal of a Depression-era law regulating banks, and by opposing regulation of financial products called derivatives. Women’s groups recall that as Harvard president he once made comments widely criticized as sexist. | |
| But Mr. Obama has heard it all before, advisers say, even before he brought Mr. Summers into his 2008 campaign and then the White House. The two men are hardly golf buddies. But having worked side by side daily in stressful times, aides say, the president knows Mr. Summers’s plusses and minuses, and he decided — like most of his aides, male and female — the balance on Mr. Summers was positive. | |
| “There is nothing that people on the outside are saying about Larry that wasn’t known, and he’s been our colleague besides,” said one longtime official. “Larry used to get on my freaking nerves. I would kill for Larry now. Larry is many things — he is brash, he is crass, he does not tolerate fools well, and he has to be the smartest person in the room.” | “There is nothing that people on the outside are saying about Larry that wasn’t known, and he’s been our colleague besides,” said one longtime official. “Larry used to get on my freaking nerves. I would kill for Larry now. Larry is many things — he is brash, he is crass, he does not tolerate fools well, and he has to be the smartest person in the room.” |
| But, the official added, “Larry earned my friendship and respect while he was here. We were sort of in a foxhole together, and he was a stand-up dude.” | But, the official added, “Larry earned my friendship and respect while he was here. We were sort of in a foxhole together, and he was a stand-up dude.” |
| Mr. Obama signaled his own willingness to confront the critics when he came to Mr. Summers’s defense last month in private meetings with House and Senate Democrats. People at the meeting, said the president called the criticism was unfair and credited Mr. Summers with helping to restore the economy. | Mr. Obama signaled his own willingness to confront the critics when he came to Mr. Summers’s defense last month in private meetings with House and Senate Democrats. People at the meeting, said the president called the criticism was unfair and credited Mr. Summers with helping to restore the economy. |
| Past and current administration officials say that Mr. Summers has been the Fed candidate-in-waiting arguably since Mr. Obama was first elected, notwithstanding that the president renominated Mr. Bernanke in 2009. | Past and current administration officials say that Mr. Summers has been the Fed candidate-in-waiting arguably since Mr. Obama was first elected, notwithstanding that the president renominated Mr. Bernanke in 2009. |
| After the 2008 election, Mr. Summers had wanted to become Treasury secretary again, or else Fed chairman when Mr. Bernanke, the choice of President George W. Bush, ended his term. He and the president discussed the Fed chairmanship then, according to people familiar with the talks. | After the 2008 election, Mr. Summers had wanted to become Treasury secretary again, or else Fed chairman when Mr. Bernanke, the choice of President George W. Bush, ended his term. He and the president discussed the Fed chairmanship then, according to people familiar with the talks. |
| While some liberal and feminist groups objected at the time to Mr. Summers, Mr. Obama had his own reasons for giving the adviser’s desired jobs to others. He chose Mr. Geithner for Treasury after being impressed by him, aides said, at their pre-election introduction. And the following August, he decided that for continuity in fragile economic times, he wanted Mr. Bernanke to stay at the Fed and Mr. Summers in the White House. | |
| The job that Mr. Summers got — director of the White House National Economic Council, brokering administration policies and briefing the president daily — was one that, while influential especially in times of crisis, was seen as a step down for a former Treasury secretary. But, Obama associates say, Mr. Summers’s willingness to serve loyally won points with the president. | The job that Mr. Summers got — director of the White House National Economic Council, brokering administration policies and briefing the president daily — was one that, while influential especially in times of crisis, was seen as a step down for a former Treasury secretary. But, Obama associates say, Mr. Summers’s willingness to serve loyally won points with the president. |
| When Mr. Summers prepared to leave after two exhausting years, Mr. Obama did not implore him to stay, as the president later did Mr. Geithner. But Obama advisers say that the two men parted on good terms, and that Mr. Obama still calls on Mr. Summers for economic advice. | When Mr. Summers prepared to leave after two exhausting years, Mr. Obama did not implore him to stay, as the president later did Mr. Geithner. But Obama advisers say that the two men parted on good terms, and that Mr. Obama still calls on Mr. Summers for economic advice. |