WASHINGTON, D.C. — Big changes are coming to President Barack Obama’s administration – just not right away.
The White House is making the nation’s high-stakes fiscal crisis its top priority coming out of the election, underscoring the vital importance of averting severe year-end tax increases and spending cuts, not just for the economy but in setting the tone for Obama’s second term.
Still, Obama is weighing replacements for high-profile officials expected to leave his Cabinet and the White House soon. Treasury Secretary Timothy Geithner and Secretary of State Hillary Rodham Clinton both want to step down but have indicated a willingness to push their departures into next year, or at least until successors are confirmed. Defense Secretary Leon Panetta also wants to retire next year.
“The first thing is to try to find a way out of the box we’re in with regards to the fiscal cliff,” said Tom Daschle, the former Senate majority leader who is close to Obama. “When the new Congress convenes they’ll begin the nominating process for what I expect will be a good number of vacancies.”
Obama privately delved into both issues Thursday, his first full day back in Washington following his re-election on Tuesday. The president and his team were also assessing how congressional Republicans were positioning themselves following the election before saying much publicly about his second term.
The president will make his first comments on the economy and the fiscal cliff Friday at the White House.
In his victory speech Tuesday night, Obama offered a call for reconciliation after a divisive campaign. But he made clear he had an agenda in mind, citing a need for changes in the tax code, as well as immigration reform and climate change.
Obama aides want to avoid what they believe was an overreach by President George W. Bush, who declared after narrowly winning re-election that he had “political capital” and intended to spend it. One of Bush’s first moves was to push to privatize Social Security, a plan that was roundly rejected by Congress and the public.
The White House believes Obama has a clear mandate on one key issue: raising taxes on families making more than $250,000 a year. Obama senior adviser David Plouffe said voters “clearly chose the president’s view of making sure the wealthiest Americans are asked to do a little bit more” to help shrink the federal deficit.
The president has long advocated allowing tax cuts first passed by Bush to expire for upper income earners. But he gave in to Republican demands in 2010 and allowed the cuts to continue, angering many Democrats.
Both parties agree that the combination of tax increases and spending cuts set to hit on Jan. 1 could plunge the economy back into recession.
Republican House Speaker John Boehner said Wednesday that he wanted to compromise with the re-elected president. And he said the House would be willing to accept higher tax revenue under the right conditions as part of a more sweeping attempt to reduce deficits.
The White House wants consistency in its “fiscal cliff” negotiating team, meaning Geithner is likely to put off his departure from Treasury until Obama and lawmakers can reach some agreement.
White House chief of staff Jack Lew is seen as a leading candidate to replace Geithner. Lew is well-respected in Washington by both parties and served as budget director under both Obama and former President Bill Clinton.
Another person often mentioned as a possible successor to Geithner is Erskine Bowles, a White House chief of staff under Clinton and the co-chief of the White House’s 2010 deficit reduction commission.
Both Lew and Bowles would bring an intimate knowledge of the intricacies of the federal budget and could be expected to take a leading role in trying to negotiate a broad budget agreement with Congress. The selection of either would signal that the administration intends to make resolution of the government’s deficit problems a priority.
At State, the leading candidates to take over as the nation’s top diplomat are Sen. John Kerry, D-Mass., and Susan Rice, the U.S. ambassador to the United Nations.
But Rice has faced criticism this fall from Republicans for providing initial accounts about the deaths of Americans in Benghazi, Libya, that later proved false. The White House has vigorously defended Rice, but the prospect of starting a second term with a contentious confirmation hearing may be unappealing.
Kerry, an early Obama backer, has long coveted the State Department job. He has traveled overseas on Obama’s behalf and even played the role of Romney during campaign debate preparations this year.
Other Cabinet secretaries who have talked about leaving are Attorney General Eric Holder and Transportation Secretary Ray LaHood, the only Republican in the Cabinet. Both have said they would speak with the president before making a final decision.
Second term shake-ups are also sure to hit Obama’s West Wing inner circle. Plouffe is expected to be among those departing, while Obama’s senior adviser and close friend Valerie Jarrett is staying on.
And if Obama taps Lew for the Treasury Department, he’ll have to add chief of staff to the list of vacancies
Associated Press writers Martin Crutsinger, Ben Feller, Ken Thomas and Pete Yost contributed to this report.