Job No. 1: A new Treasury chief

A successor to Henry Paulson is likely to be nominated soon. Here's who may be on the short list for Obama.

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By Chris Isidore, CNNMoney.com senior writer

Treasury Secretary Henry Paulson is reportedly preparing to work with his successor as soon as Wednesday.
Treasury Secretary Henry Paulson is reportedly preparing to work with his successor as soon as Wednesday.

NEW YORK (CNNMoney.com) -- American voters have chosen the man who will choose the next Treasury Secretary.

Whoever Barack Obama names to replace Treasury Secretary Henry Paulson will be particularly important since the federal government has already taken unprecedented steps to intervene in the financial markets in an attempt to deal with the credit crisis.

As such, some experts argue that the president-elect could name his nominee for the post as early as Wednesday morning.

"This is a national emergency," said Lakshman Achuthan, managing director of the Economic Cycle Research Institute. "The key of a new administration coming in will be credibility on economic issues."

The Treasury Department is set to make more decisions in the next few weeks about how to spend much of the $700 billion set aside as part of the bank bailout bill enacted last month. That increases the urgency for the next president to have a smooth transition in the Treasury Department.

Top economic policy advisors to the two campaigns did not respond to questions about how quickly a new Treasury secretary would be named. And they wouldn't comment on possible choices being considered.

Yet, with an economic summit of 20 of the world's top economies scheduled to be held in Washington, D.C. on Nov. 14 and 15, experts said they'd be surprised if that summit started without a new Treasury secretary being nominated.

Who would Obama pick?

While the campaigns aren't talking much about who the candidates might pick, that hasn't stopped experts from speculating about who is on the short list of candidates.

New York Federal Reserve President Timothy Geithner is seen as one of the leading candidates for Obama. Geithner was the Fed's point person on the rescue of Bear Stearns and American International Group (AIG, Fortune 500) as well as the failed talks to keep Lehman Brothers out of bankruptcy.

But Geithner could generate some controversy due to the decision to let Lehman fail, which many blame for the financial crisis that followed. There have also been many criticisms of the AIG bailout.

Still, with expectations that the Democrats will continue to have a majority in the Senate, few believe Obama would have trouble winning approval for whoever he nominates.

Achuthan said he doubts questions about Lehman or AIG would knock out Geithner.

"The problem is, everyone in the room goofed, and you're probably going to pick someone who was in the room," he said.

Obama economic advisor Warren Buffett has also been suggested as a potential pick for Treasury secretary. And during the second presidential debate, McCain even endorsed him as a possible pick if he wins.

But Buffett, the legendary billionaire investor who controls Berkshire Hathaway (BRKA, Fortune 500), told a forum sponsored by Fortune magazine last month that he would like to see Paulson asked to stay on. Paulson is on record as saying he does not want to remain in the post, though.

Buffett also had praise for Federal Deposit Insurance Corp. chairman Sheila Bair, who others have speculated could be selected by Obama.

Bair has taken an active role in trying to stop banks from foreclosing on homes and Obama has said that this would be one of the main issues he would want his Treasury Secretary working on. Bair would also be the first woman to hold this Cabinet position.

Two former Treasury secretaries are also mentioned among possible Obama picks - Robert Rubin and Lawrence Summers. Rubin has ruled out a return to Washington, however.

David Wyss, chief economist at Standard & Poor's, suggested that New Jersey Governor Jon Corzine, a former CEO of Goldman Sachs (GS, Fortune 500) and former U.S. Senator, would also be a possibility since his experience on Wall Street and in Congress could be a plus. To top of page

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