According to The New York Times the debate inside the administration turned into a controversy between economic policymakers and political operatives:
In the end, Mr. Geithner largely prevailed in opposing tougher conditions on financial institutions that were sought by presidential aides, including David Axelrod, a senior adviser to the president, according to administration and Congressional officials.
Mr. Geithner, who will announce the broad outlines of the plan on Tuesday, successfully fought against more severe limits on executive pay for companies receiving government aid.
He resisted those who wanted to dictate how banks would spend their rescue money. And he prevailed over top administration aides who wanted to replace bank executives and wipe out shareholders at institutions receiving aid.
To start with the good news, this is the right way for a president to make a decision. The thing that matters most about the bank rescue plan is whether it works for the economy. It matters more than the short-term politics do for reasons of substance, but also for reasons of politics. People in 2010 and 2012 and 2016 will be looking for prosperity, not for gestures that felt good in February 2009. So on a matter like this, a smart president will listen more to his Treasury Secretary and his NEC Chair and his CEA Chair than he will to David Axelrod or Patrick Gaspard or anyone else on the politics side. The bad news is that precisely because this is the right way to make decisions, it seems that more progressive alternatives to Geithner’s plan will have never gotten a real hearing. The ideas that Axelrod was espousing in this controversy deserve to have a voice in administration deliberations. But that means a credible policy voice. There are plenty of well-credentialed economists in the world who I think would be more sympathetic to the Axelrod perspective. Axelrod just doesn’t happen to be one of those people.
David Sirota has observed previously and observes once again that there seem to be many more progressive voices on the political side of the administration than on the wonkier policy side. What the implications of that are would depend a lot on the character of the president. This president seems determined to listen to his policy aides on policy questions. Which is as it should be. But it means that the prevailing balance is very disadvantageous to progressives.