- The Washington Times - Tuesday, January 27, 2009

UPDATED:

The Senate confirmed the nomination of New York Federal Reserve Bank head Timothy F. Geithner on Monday to be secretary of the Treasury, giving President Obama a key member of his team at a time when the administration faces a mounting list of financial and economic crises.

The 60-34 vote came despite concerns expressed by lawmakers of both parties over irregularities in Mr. Geithner’s tax returns when he worked for the International Monetary Fund earlier this decade. Some Republicans say those irregularities would have sunk a nominee from the Bush administration. Secretary of State Hillary Rodham Clinton, the only other Obama nominee to face a roll-call vote, was confirmed by a 94-2 vote.

Wasting no time, Mr. Obama swore in his new Treasury secretary just over an hour after the Senate vote was taken Monday evening.

“Tim’s work and the work of the entire Treasury Department must begin at once. We cannot lose a day, because every day the economic picture is darkening, here and across the globe,” Mr. Obama said before Mr. Geithner was sworn into office at the Treasury Department’s Cash Room.

After he was sworn in, Mr. Geithner said the Obama administration would act quickly to stabilize the financial system and get the economy growing again.

“We are at a point of maximum challenge for our economy and our country,” he said.

Mr. Geithner, 47, was a key behind-the-scenes architect of the Bush administration’s policy on the Wall Street bailout and the string of crises that battered the financial markets over the past year. He worked closely with outgoing Treasury Secretary Henry M. Paulson Jr. and Federal Reserve Board Chairman Ben S. Bernanke. The New York regional Federal Reserve Bank headed by Mr. Geithner is considered the most influential in the central bank system, with broad oversight of some of the country’s biggest financial firms.

But the mostly Republican critics of the nominee zeroed in both on his record and on revelations he failed to pay tens of thousands of dollars in income taxes when he worked at the IMF.

Among those opposing Mr. Geithner were Senate Minority Leader Mitch McConnell and Republican presidential nominee Sen. John McCain of Arizona, along with Democratic Sens. Robert C. Byrd of West Virginia, Russell D. Feingold of Wisconsin, and Tom Harkin of Iowa, plus Vermont independent Bernard Sanders.

Ten Republicans who joined the majority Democrats in supporting Mr. Geithner’s nomination were: Sens. Bob Corker of Tennessee; John Cornyn of Texas; Michael D. Crapo of Idaho; John Ensign of Nevada; Lindsey Graham of South Carolina; Judd Gregg of New Hampshire; Orrin G. Hatch of Utah; Richard C. Shelby of Alabama; Olympia J. Snowe of Maine; and George V. Voinovich of Ohio.

At his confirmation hearing last week, Mr. Geithner apologized repeatedly for the tax oversights, saying they were “careless and avoidable,” but also “unintentional.”

Supporters lauded Mr. Geithner’s expertise on financial matters during his career at the Treasury Department, the IMF and the Federal Reserve.

Senate Banking, Housing and Urban Affairs Committee Chairman Christopher J. Dodd, Connecticut Democrat, said he did not minimize Mr. Geithner’s tax failings, but insisted, “This is one of the most talented people I have ever met in the area of financial services.

“Rather than decrying or lambasting this nominee, we ought to be thanking him,” Mr. Dodd said.

But Sen. Susan M. Collins, Maine Republican, called Mr. Geithner’s failure to pay self-employment taxes “inexcusable negligence.” She was one of a number of Republicans who noted Mr. Geithner as Treasury secretary would oversee the Internal Revenue Service.

“How can we tell the taxpayers that they are expected to comply fully with our tax laws, when these laws have been treated so cavalierly by the person who would lead the Treasury Department and, ultimately, the Internal Revenue Service, when he was applying them to himself?” she asked.

Iowa’s Mr. Harkin was one Democrat who came out against the nomination, citing both Mr. Geithner’s tax problems and what Mr. Harkin said was Mr. Geithner’s failure to regulate the big banks and Wall Street brokerages at the center of the financial meltdown.

Sen. Michael B. Enzi, Wyoming Republican, noted that a number of presidential nominations in the past have been torpedoed for ethical and financial lapses far less serious than those admitted by Mr. Geithner.

“Are we saying there is only one person in the whole world qualified to handle this job today?” he asked.

But both Republicans and Democrat supporters said Mr. Geithner was qualified for the post and that, with the economic numbers growing grimmer by the day, a long delay in filling the Treasury job was too risky. The new Treasury chief will immediately face questions of massive proportions about the shape of Mr. Obama’s $825 billion economic stimulus bill as well as whether and how to use the second $350 billion available to the Treasury under the Wall Street bailout plan.

Mr. Hatch complained of a double standard in the press and among liberal critics of Republican nominees. Some of former President George W. Bush’s choices were rejected without even a confirmation hearing for far less serious charges, he said.

But Mr. Hatch said in the end he decided to support Mr. Obama’s choice.

“I do not believe we have the luxury of leaving this position unfilled for another day,” he said.


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