First, the New York Times is reporting Clinton has accepted Obama’s offer to become Secretary of State:
Hillary Rodham Clinton has decided to give up her Senate seat and accept the position of secretary of state, making her the public face around the world for the administration of the man who beat her for the Democratic presidential nomination, two confidants said Friday.
Mrs. Clinton came to her decision after additional discussion with President-elect Barack Obama about the nature of her role and his plans for foreign policy, said one of the confidants, who insisted on anonymity to discuss the situation. Mr. Obama’s office told reporters Thursday that the nomination is “on track” but Clinton associates only confirmed Friday afternoon that she has decided.
In addition, Obama has apparently settled on Timothy Geithner, the head of the Federal Reserve Bank of New York, to replace Henry Paulson as Treasury Secretary.
Some background on Geithner:
Barring last minute changes, the nominee for Treasury Secretary will be NY Fed President Tim Geithner — a career Treasury official under both Bob Rubin and Larry Summers — who actually had worked at the Treasury in three administrations under five Secretaries — going back to 1988.
UPDATE: Apparently the Obama transition team is pulling a Friday news dump, because Fox News is reporting that New Mexico Governor Bill Richardson has been tapped to become Secretary of Commerce.
UPDATE II: An initial reaction to the Geithner pick:
“I would say the market is going to like it,” said James Awad, managing director of Zephyr Capital. “[Former Clinton Treasury Secretary Larry] Summers was more controversial. People will view it as a safe choice, an experienced guy. There’s a little bit of a question because he’s associated with the bailout, and that’s still a work in progress and not totally successful.”
UPDATE III: Here’s some more on Geithner from the American Prospect’s Robert Kuttner:
Unlike many senior Treasury and Fed officials, Geithner is not a high roller from a big bank or investment house but a public-minded civil servant. He has neither a doctorate in economics nor an M.B.A. After receiving a master’s degree in international economics from Johns Hopkins University, he worked as a research assistant to Henry Kissinger and then joined the Treasury, where he was posted as an assistant attaché in Japan. He came to the attention of both Larry Summers and Robert Rubin and quickly moved up the ladder. He was a key player in the containment of the Asian financial crisis of 1997-1998 and later went to the International Monetary Fund as a top official. Despite being a Democrat, he was named president of the New York Fed after two stronger and more conservative candidates withdrew.
Geithner’s admirers span the spectrum from Republican financial mogul Pete Peterson to liberal Democrat Barney Frank. One can infer from his broad fan base three possible conclusions: Wall Street is so clubby and politically powerful that permissible policy differences just aren’t that great; or maybe Geithner is all things to all people; or perhaps, in a deep crisis, truly talented and effective people can earn broad respect.