Monday, January 26, 2009

Tim Geithner Confirmed By The Senate-- Kind Of Messy Though


Yesterday evening the Senate finally voted to confirm Tim Geithner as Secretary of the Treasury. While he's not my idea of a champion of American working families, he's President Obama's choice to carry out President Obama's policies. Unless you feel Obama isn't a legitimate president, he's entitled to his cabinet selections. He was sworn in immediately after the vote, as if to avoid more senators changing their minds and switching their votes.
What had been widely expected to be a quick and overwhelming Senate vote of confidence was complicated earlier this month by the disclosure that for the years 2001 to 2004, when he was a senior official at the International Monetary Fund, Mr. Geithner failed to pay federal taxes for Social Security and Medicare. He paid the taxes for 2003 and for some compensation in 2004 after the Internal Revenue Service audited him in 2006, but the statute of limitations had run out on the 2001 and 2002 liabilities.

Mr. Geithner paid those in November after Obama officials vetting his potential nomination raised the matter. He insisted he had made a stupid but innocent mistake, and had been advised in 2004 by an accountant that he did not owe the self-employment taxes. The I.M.F., as an international organization, does not withhold federal taxes for its American employees but does provide detailed statements of their liabilities and provides partial payment, in the expectation that the American employees will use the money to pay the I.R.S.

Geithner was corfirmed 60-34. Voting against confirmation were the usual rogues gallery of obstructionists like DeMint, Chambliss, Grassley, McCain, Coburn, Isakson, Kyl, McConnell, Thune and, of course, David Diapers Vitter. Of more concern is that 4 trustworthy progressives joined them: Robert Byrd, Tom Harkin, Russ Feingold and Bernie Sanders. Here's Russ Feingold's statement about why he voted against the confirmation:
"I voted against the nomination of Timothy Geithner to be the next Secretary of the Treasury with some reluctance. President Obama, like any other President, is entitled to have the Cabinet he wants, barring a serious disqualifying issue, and Mr. Geithner is a very able nominee in many ways. And while I am troubled by Mr. Geithner's track record on some of the issues that have contributed to the credit market crisis, I do not base my vote on what is, to a certain extent, a matter of policy disagreement.

"Mr. Geithner's tax liability is a different matter, however. I am deeply troubled by his failure to pay the payroll taxes he owed, despite repeated alerts from his employer at the time, the International Monetary Fund, that he was responsible for paying those taxes. Moreover, his earlier interactions with the Internal Revenue Service over his failure to pay sufficient payroll taxes for his household employees make Mr. Geithner's explanations of his failure to pay his own payroll taxes even less satisfactory. The failure to comply with our nation's tax laws would be problematic for any Cabinet nominee, but it is especially disturbing when it involves the individual who will be charged with overseeing the enforcement of our tax laws.

"With the condition the economy is in, and the state of our country's financial institutions, the stakes could not be greater for the next Treasury Secretary. While I could not support his nomination, I respect Mr. Geithner's abilities and I look forward to working with him to address the serious problems facing our country."


If money is the root of all evil, lobbyists, and the corrupting, corrosive influence they have on our grubby public officials, are the worst thing that's happened to American democracy. If this isn't just another press release filled with exceptions and "elasticity," like Obama's last anti-lobbyist foray, Geithner's decision to keep lobbyists away from the financial bailout makes him worth his first week's salary. We'll have to watch and see what happens in teh real world.
The Treasury Department on Tuesday unveiled restrictions to curb lobbying by firms receiving help from the $700 billion financial bailout.

Banks and other institutions receiving federal bailout money spent heavily to lobby last year as the financial crisis spread through the economy. The new restrictions are meant to “prevent lobbyist influence” and “restrict contacts with lobbyists” as the bailout funds are allocated.

...The new lobbying restrictions also aim to establish a more transparent process to award TARP funds to banks and other financial institutions. Treasury will publish a description of how each institution was awarded money.

I bet Feingold is as happy about this one as I am!

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At 9:21 PM, Blogger Jimmy the Saint said...

Feingold and Sanders were right to vote against Geithner. What did he do to help ward off the crisis? He sat by and did nothing, just like Bernanke sat by during the last years of Greenspan's rule of the Fed. So, while the tax issue was a problem, it wasn't even the biggest one. The other problem is that Krugman, Roubini, Stiglitz and Warren Buffett didn't want the job.

At 10:38 AM, Anonymous Anonymous said...

The bigger issue to me is that The Fed got FOI'ed in Dec and again in Jan... and Geithner was running the show - as President of Fed NY.

for example -

He could've easily disclosed all documents. Instead he pretended The Fed is some sort of cloak'n'daggers show where no one is allowed to know what's happening because everything is top secret.

And now Geithner is heading Treasury which also got FOIed in December on the bailout funds.

Geithner thinks he's smarter than us. I'm glad Feingold opposed Geithner... even though the taxes were IMHO less of a problem than opposing transparency.

What is Obama thinking with this guy?

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