Obama’s Standards, Vetting Lapses Trip Up Effort to Fill Posts
Feb. 20 (Bloomberg) -- President Barack Obama’s agenda is being stalled by a largely self-inflicted inability to fill top positions in his administration.
After a quick start, Obama has fallen behind Presidents George W. Bush and Bill Clinton, said Terry Sullivan, executive director of the White House Transition Project, which tracks presidential staff. At this point, Bush and Clinton had made all their Cabinet appointments. Obama has nominated 13 of 15.
The delays go beyond Cabinet posts and have been most damaging at the Treasury Department, where Secretary Timothy Geithner is the only Senate-confirmed appointment. Among the missing: a deputy secretary, an administrator for the bank- bailout program, undersecretaries for domestic finance and international affairs, and a general counsel.
“It’s absolutely shocking we don’t have a full Treasury Department given the enormous economic and banking challenges we face,” said Darrell West, head of government studies at the Washington-based Brookings Institution.
The Treasury is charged with carrying out the administration’s broad effort to pull the economy out of a recession, rescue the banking system, overhaul government regulations and fix the housing market.
“It’s critically important that Secretary Geithner has a full complement of officials to support him ASAP -- like yesterday,” said Rob Nichols, a former Treasury official and now president of the Financial Services Forum in Washington, which represents the heads of banks.
Republican Opposition
Vetting embarrassments encountered by several nominees, including Geithner, are a principal cause of the slowdown in appointments. Other hurdles include the ethical standards set by Obama and the willingness of Republicans on Capitol Hill to exploit the president’s difficulties.
The pace of Obama’s appointments slowed in the wake of bungled nominations, particularly that of former Senator Thomas Daschle, who withdrew from consideration as chief of Health and Human Services because of tax issues.
Iowa Senator Charles Grassley, the top Republican on the Senate Finance Committee, which approves Treasury nominees, said the process is likely to remain slow.
“I bet if you interview me three months from now, he won’t have the sub-Cabinet filled,” Grassley said.
Obama may soon present Grassley’s committee with another candidate: Former Securities and Exchange Commission member Annette Nazareth is the leading candidate to become Geithner’s deputy, according to people familiar with the matter.
‘Proctology Exam’
The White House has a six-person squad to reexamine potential nominees, all of whom will be subjected to audits, according to an administration official who spoke on condition of anonymity. Further, FBI background checks are pending for many nominees whose names otherwise would be submitted by now.
“Some people call it a proctology exam,” said Symantec Corp. Chief Executive John Thompson, who was vetted for Commerce secretary after Obama’s first choice dropped out. “We provided all kinds of details: tax returns, accounts, every speech I’ve ever given in the past 25 years.”
At the State Department, the process ground to a halt last month after the administration pushed through nominees such as Secretary Hillary Clinton, United Nations Ambassador Susan Rice and two deputy secretaries. At Agriculture, meanwhile, no one has been named since Secretary Tom Vilsack said two weeks ago the department was “further along than any other department.”
Grassley said many of the problems were of the administration’s own making.
‘Revolving Door’
Obama may be discovering the limitations of his vow to change Washington’s lobbying culture, he said. The then- Illinois senator campaigned on a promise to close the “revolving door” linking government and special interests. On Jan. 21, his first full day in office, he decreed new ethics rules forbidding any lobbyist who joins the administration to work on issues with which they were previously involved.
“He had unrealistic expectations,” Grassley said.
Obama has faced criticism, including from Grassley, about the exceptions he has made to his lobbying rules. The most notable was William Lynn, a registered lobbyist for the defense firm Raytheon Co. until March 2008 who is at the Pentagon as the second-highest-ranking civilian.
“You can have a few exceptions to your standards,” West said. “Obama may have exhausted his free passes.”
Harkin Opposition
Republicans aren’t the only ones giving Obama trouble on Capitol Hill.
Gary Gensler, Obama’s nominee to head the Commodity Futures Trading Commission, has faced delays in getting a hearing before the Senate Agriculture Committee. Senator Tom Harkin, an Iowa Democrat and chairman of the panel, said after meeting Gensler last month that he had concerns about the nominee’s “deregulatory orientation.”
Obama told CNN on Feb. 3 that he “screwed up” on the Daschle nomination and his administration would ensure “it doesn’t happen again.” Jen Psaki, a White House spokeswoman, wouldn’t comment about the issue. Chief of Staff Rahm Emanuel also declined to comment.
Obama’s transition chief, John Podesta, said he knew about the problems that dragged down the nominations of Daschle, as well as Obama’s first nominee for Commerce secretary, New Mexico Governor Bill Richardson, who dropped out because of a federal graft investigation in his state, and Nancy Killefer, who withdrew from consideration as deputy director of the White House budget office because of tax concerns.
‘Bad Judgments’
“I take the blame for this,” said Podesta, White House chief of staff under Clinton and head of the Center for American Progress, a public-policy group in Washington that advises Democrats. “We may have made bad judgments like in the case of Nancy Killefer or some of the others, but it wasn’t that we weren’t aware of the issues.”
Podesta said the glitches may have created a higher standard for approving nominees.
As a result, even Treasury, which is responsible for averting what Obama has warned could become a national economic “catastrophe,” is being run largely by a skeleton crew, with Geithner relying on experts at the Federal Reserve and the White House.
“I’m sure Tim Geithner would love his team fully in place,” said Ken Duberstein, chief of staff to President Ronald Reagan. “It’s an overwhelming job and it becomes extraordinarily overwhelming if you are the only person there.”
‘Unprecedented’ Action
Treasury spokesman Andrew Williams said the administration “has taken an unprecedented level of action,” given the economic challenges it is facing.
“From passing a recovery bill to crafting a framework for financial stability and mortgage affordability, there’s a significant amount of work being done,” Williams said.
Across all agencies and departments, the lack of personnel may also have an impact on spending the funds contained in a $787 billion economic-stimulus package signed into law by Obama this week. Peter Orszag, director of the Office of Management and Budget, yesterday sent all agencies a 50-page memorandum with guidelines about how the money should be used.
“People often think of the administration as just Obama, but it’s not,” said Sullivan, of the White House Transition Project. “He’s just the coach. The other guys play the positions and get stuff done.”
To contact the reporters on this story: Kim Chipman in Washington at kchipman@bloomberg.net Daniel Whitten in Washington at dwhitten2@bloomberg.net .
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