Analysis: Battle over Fed - Summers' opponents seek to sway Obama

Thu Sep 5, 2013 7:29pm EDT
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By Alister Bull and Rachelle Younglai

WASHINGTON (Reuters) - Progressive groups opposing Lawrence Summers as the next Federal Reserve chairman are stepping up pressure on President Barack Obama to make a different choice, emphasizing the price his Democratic Party would pay for nominating the former U.S. Treasury Secretary and White House aide.

They are confronted however by a well-coordinated campaign on Summers' behalf by former Obama administration officials who have succeeded in cementing the view that Summers has basically got the job.

President Barack Obama, who is expected to announce his nomination for the job within a few weeks, has said that both Summers and current Fed Vice Chair Janet Yellen are excellent candidates to replace Fed chief Ben Bernanke whose term expires in January.

Reports in the New York Times and Washington Post on Thursday suggested Obama was strongly inclined to pick Summers.

A number of former Obama administration officials, including Jim Messina and Stephanie Cutter, who ran his 2012 re-election campaign, are working behind the scenes to help promote Summers' candidacy, according to a former administration official. Neither Cutter nor Messina responded to requests for comment.

Former U.S. Treasury Secretary Timothy Geithner has also played a backstage role to ensure that Summers' work for Obama is accurately portrayed, the source said, while the president has publicly defended Summers and praised his White House service. Geithner declined to comment.

A source close to Yellen, who has not spoken publicly on the issue, says she feels that she is now the underdog in the race.

Odds displayed by online betting services also make Summers the favorite for the job, but his opponents are not giving up without a fight.   Continued...

Former U.S. Treasury Secretary Lawrence H. "Larry" Summers speaks during a financial and economic event at the London School of Economics (LSE) in London March 25, 2013. REUTERS/Jason Alden/POOL