Bloomberg News

Obama Considering Morgan Stanley’s Porat for Treasury Job

January 15, 2013

Morgan Stanley CFO Ruth Porat

Morgan Stanley Chief Financial Offiver Ruth Porat. Photographer: Jin Lee/Bloomberg

President Barack Obama is considering two women for senior economic positions, with Ruth Porat, chief financial officer at Morgan Stanley (MS:US), a leading candidate for deputy Treasury secretary and Wal-Mart Foundation President Sylvia Mathews Burwell a top contender for budget director, according to people familiar with the matter.

Porat has emerged as one of Obama’s top-tier choices for the No. 2 position at Treasury, according to one of the people. She would bring deeper market experience than Jack Lew, Obama’s choice for Treasury secretary, and provide gender balance on an economics team dominated by men, said the people, who requested anonymity to discuss personnel matters that haven’t been announced.

Burwell is in contention to lead the White House Office of Management and Budget, said another person, who also requested anonymity. Last month, Obama named Burwell, who served as a deputy OMB director in President Bill Clinton’s administration, to his global development council. The office is currently headed by interim director Jeff Zients, who replaced Lew in that job last year.

Obama, who won re-election with majority support from women and minorities, came in for criticism from some women’s groups after selecting men to fill his highest-profile Cabinet vacancies -- at Treasury, State and Defense.

He defended his record yesterday, saying critics should wait until all his Cabinet and White House positions are filled “before they rush to judgment.” He said a diverse staff helps create better policies.

Cabinet Diversity

“I’m very proud that in the first four years, we had as diverse, if not a more diverse, a White House and a Cabinet than any in history,” he said during a news conference. “And I intend to continue that.”

Among the 23 Cabinet and Cabinet-level positions, eight were held by women at the end of Obama’s first term. Secretary of State Hillary Clinton, Labor Secretary Hilda Solis and Environmental Protection Agency Administrator Lisa Jackson have said they are departing the administration.

Obama didn’t announce any personnel moves. A White House official, Amy Brundage, declined to comment on the possibility of the president picking Porat and Burwell. Jeanmarie McFadden, a Morgan Stanley spokeswoman, also declined to comment. David Tovar, a spokesman for Wal-Mart Stores Inc. (WMT:US), said the company had no comment.

The deputy Treasury secretary will be a point of contact between the administration and the financial-services industry as Obama presses Congress to raise the government’s $16.4 trillion debt ceiling in the coming weeks.

Debt Debate

The U.S. reached the statutory limit on Dec. 31, and the Treasury Department began using extraordinary measures to finance the government. Those measures will work only until mid- February to early March, Treasury Secretary Timothy F. Geithner said in a letter yesterday to House Speaker John Boehner and other congressional leaders. Congressional Republicans are threatening to hold up raising the borrowing authority unless Obama agrees to cut spending.

At the request of White House officials, Neal Wolin, the current deputy secretary, is staying at the Treasury for a transition period.

Porat is no stranger to the Treasury department. In September 2008, during the financial crisis, then-Treasury Secretary Hank Paulson hired Morgan Stanley to review the finances of Fannie Mae and Freddie Mac, prior to the U.S. seizure of the government-sponsored enterprises that buy and back mortgages to provide liquidity in the market.

Morgan Stanley

Porat, then head of global financial institutions, working along with Robert Scully, an adviser to then-Morgan Stanley Chief Executive Officer and Chairman John Mack, led a 39-person team at the investment bank that explored options for Fannie Mae and Freddie Mac.

Porat, with an undergraduate degree from Stanford University and graduate degrees from the London School of Economics and the Wharton School of the University of Pennsylvania, received $11.3 million in compensation in 2011.

She has called for more work visas for students with engineering and high-technology degrees as a way to spur innovation.

‘Staple’ Visa

“We should staple a visa to every post-graduate degree,” she said at a Lincoln Center forum on Nov. 16, 2011.

Burwell, who graduated from Harvard College in 1987 and then won a Rhodes Scholarship to Oxford, also serves on the board of Metlife Insurance, for which she received $259,000 in 2011.

The next OMB director would have to manage federal agencies if $110 billion in automatic spending cuts take effect as scheduled on March 1.

Burwell worked for Robert Rubin in Clinton’s National Economic Council and was at Treasury when a budget standoff in 1995 led to a government shutdown. After the Clinton administration, she worked at the Bill and Melinda Gates Foundation. In January 2012, she moved to the Wal-Mart foundation to serve as president.

To contact the reporter on this story: Hans Nichols in Washington at hnichols2@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net


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Companies Mentioned

  • MS
    (Morgan Stanley)
    • $35.76 USD
    • -0.37
    • -1.03%
  • WMT
    (Wal-Mart Stores Inc)
    • $76.84 USD
    • 0.62
    • 0.81%
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