The end of Tim Geithner has itself come to an end.
Sources on Capitol Hill say that Geithner’s status was re-elevated last week when president Obama embraced him before the State of the Unions address.
That is a 180 degree reversal in the perception of the Treasury Secretary’s fate from just over a week ago. Back then people thought Geithner had basically been fired,
When Obama announced his tough new banking rules following the devastating loss of Ted Kennedy’s Senate seat to Republican candidate Scott Brown, many thought it was the effective end of Geithner’s term as Treasury Secretary.
The message from the staging of the press conference seemed telling: Paul Volcker stood close to the president, smiling broadly, while Geithner was several feet away staring at his shoes.
As if that weren’t enough, the president called one part of his new financial rule “the Volcker Rule” and indicated that moments before the press conference he had been in a meeting with Volcker. It was a case of the dog that didn’t bark: if the president was naming Volcker as his confident and the architect of his new plan for Wall Street, it seemed designed to send a message that Geithner had been sidelined.
That’s how many media outlets reported it (including us) and it is how many lawmakers and staffers on Capitol Hill took it. In the capital, this perception was quickly becoming a reality. If Geithner was perceived as having lost the confidence of the president, he would instantly lose influence on Capitol Hill.
That changed with last week at the State of the Union. Geithner was seated in the aisle, which meant he would be shown on camera when the president approached the podium. But it turned out to mean much more than that. As the president walked past, he paused to embrace Geithner.
“When the president hugs you in front of every member of the US Senate and every member of the House, that’s a signal that you still have the power,” one Senate staffer told us.
Others on Capitol Hill we spoke to agreed.
“It was a clear message that the perception from the Volcker announcement was wrong. Geithner is still in Obama’s inner circle,” another staffer said.
The hug that changed the perception on Capitol Hill was preceded and followed by administration members talking to reporters and bloggers behind the scenes, saying the symbolism of the Volcker press conference had been misinterpreted. That message has now sunk in.
At least in the eyes of many lawmakers and staffers on Capitol Hill, Geithner is back.
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