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Obama says would not accept Geithner resignation

(Agencies)
Updated: 2009-03-22 12:41

WASHINGTON -- US President Barack Obama on Saturday stepped up his weeklong defense of much-criticized Treasury Secretary Timothy Geithner, saying he would not accept his resignation even if it was tendered. 

US President Barack Obama (R) stands with Treasury Secretary Timothy Geithner (L) as he makes remarks about AIG and his economic recovery package before departing for a trip to California from the White House in Washington, March 18, 2009. [Agencies]

It came ahead of a critical week for Geithner, who is expected to unveil his much-anticipated bank bailout plan and outline broad financial regulatory reforms to better police Wall Street within days.

Related readings:  Geithner tells AIG: It's payback time  Geithner rescue plan may be doomed

Obama said in an interview with CBS television network's "60 Minutes" program that if Geithner tried to quit, he would tell him, "Sorry buddy, you've still got the job."

Geithner has been under fire over his failure to block at least $165 million, and possibly as much as $218 million, in bonuses paid out to employees of insurer American International Group, which has received billions in government aid.

With public outrage over the AIG bonus scandal mounting and several lawmakers calling for Geithner's resignation, Obama was forced this week to repeatedly defend his treasury secretary, saying he had his complete confidence.

While Obama has said Geithner's job is safe, some Washington pundits have noted it is not a good sign that the president has had to say it, and so often.

The odds on whether Geithner will leave by the end of June increased over the last week in the Intrade political prediction market, although traders still gave it only a small chance of happening.

Obama stressed in the "60 Minutes" interview, which will be broadcast on Sunday, that neither he nor Geithner had discussed the possibility of his quitting, CBS said in a statement on Saturday.

Geithner said this week he took full responsibility for the controversy surrounding the AIG bonuses and dismissed calls for his resignation, saying it "just comes with the job."

Geithner, who has been in his job less than two months, has also faced criticism over his slow roll-out of plans to save the banking sector, which Obama said this week was key to staving off further financial calamity.

Toxic Assets

A source familiar with the bank bailout plan said on Saturday the Treasury Department would unveil a program next week aimed at cleansing toxic assets from bank balance sheets that have frozen up lending and fueled the recession.

The keenly awaited plan proposes setting up an entity the Federal Deposit Insurance Corp will use to offer low-interest loans to private interests for buying up banks' soured assets, many of which are tied to mortgages and have tumbled in value.

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