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Given the centrality, both domestically and internationally, of financial/economic issues, the Treasury job is the one where Obama should make his first decision. White House chief of staff Jack Lew is campaigning avidly for the Treasury job. Erskine Bowles, of Simpson-Bowles renown, is another possibility. As is former Deputy Treasury Secretary Roger Altman, who supported Obama's reelection strongly.
Personally, I would have far greater confidence in either Bowles or Altman than Lew, who is regarded by many as a partisan operator rather than a larger-minded policymaker who could command international, financial-community, and bipartisan congressional respect. But, as of now, Lew is rated the frontrunner. After all, he knows and has worked with Obama as the others have not.
Senate Foreign Relations Chairman John Kerry would be a logical choice as Clinton's successor at State. But he is a former presidential candidate in his own right and might also be loathe to give up his Senate position, seniority and independence. U.N. Ambassador Susan Rice is the favorite among Obama insiders. She has loyally followed the White House talking line — even when it has led her to assignments such as blaming the Libyan terrorist attacks on an obscure U.S.-made video — and meets politically correct race and gender criteria. National Security Advisor Tom Donilon is also lobbying for the job, but he is overmatched substantively in his present assignment. He mainly is a political operative and the person thought responsible for a series of recent national-security leaks to media. Kerry would be the best choice but, as of now, I'd bet on Rice at State.
It would be a disappointment to see Panetta depart so soon at Defense. A number of candidates from within Defense or CIA are available, including Ash Carter, Panetta's present deputy. But Carter is seen as a manager and technocrat unlikely to fare well in dealing with Congress or the outside world. Former Republican Sen. Chuck Hagel is also being floated as a possiblity. He would lend bipartisanship to the national-security team, as former Secretary Bob Gates did in Obama's first term. He is well liked by the media and by many of his former congressional colleagues. I do not think, however, that he has the depth or brainpower to be both a policymaker and manager of the enormous Pentagon enterprise. I am hoping that Panetta stays on well into 2013. He has been publicly sour about the arbitrary Defense cuts within the Dec. 31 fiscal-cliff package and, if they can be averted, he might be prevailed upon to stick around awhile.
It's expected that just about every member of the present Obama Cabinet will be gone early in 2013. The most speculation surrounds Attorney General Eric Holder, who has been a lightning-rod for congressional and media criticism. Yet, somewhat like U.N. Ambassador Rice, he has shown a willingness to defend all administration policies and actions. (He did the same, by the way, as Deputy AG in the Clinton Administration, pushing through last-minute pardons and commutations unquestioningly). If Holder departs, the present favorite to replace him is Massachusetts Gov. Deval Patrick, also African American, who has been an Obama ally.
Other names are certain to emerge before Obama makes final decisions about his new Cabinet. In general, though, he appears more likely to settle on those he knows and feels loyalty from than those he does not know and whose independence might unsettle him.
Once into the new year, Obama and the new Congress are likely to take up again immigration-reform legislation that neither the president nor Republicans were willing to address in 2011 0r 2012. Republicans, scorched by the strong Latino vote for Obama in the presidential election, know they must disassociate themselves from the Arizona immigration law, and similar restrictive measures, and get back toward the bipartisan partial-amnesty approach previously on the table. For one thing, they see Latinos — strongly Catholic and strongly for "family values" — as natural GOP allies if the immigration-law controversy could be removed.
Once the uproar abates over the murder of our U.S. ambassador and staff in Libya, there will be consensus between the White House and Congress on most international issues. There will be disagreements — especially if tensions continue to increase between Iran and Israel, as Iran nears a nuclear capability — but none at this moment likely to poison overall executive-legislative cooperation.
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