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Wag the Blog Redux: The Geithner Dilemma

Last week, revelations came that Tim Geithner, President-elect Obama's appointee to become treasury secretary, had not paid Social Security or Medicare taxes for years and consequently owed $43,000 in back taxes.

In the aftermath of the news, Geithner's Senate confirmation hearing was postponed, and he huddled with Senate leaders last week to explain his actions.

After a delay of less than a week, the Senate Finance Committee began grilling Geithner today and, seeking to pre-but any questions about his tax snafu, the Treasury Secretary designate called the errors "avoidable" but "unintentional.

That explanation seemed to satisfy the members of the committee who passed Geithner on to a full vote by a 18-5 margin today.

The Fix asked readers to weigh in on whether Geithner's failure to pay taxes is a fair issue to raise, given the possibility that the Senate confirms him to become one of the people tasked to lead the nation out of an economic disaster.

The most insightful comments as selected by politics producer Sarah Lovenheim are below.

"...He should be forced out, for several reasons. First of all, let's face it. The guy would be in charge of taxes and money, yet seems to not be able to keep track and manage his own. Second is the timing: he was audited and told to pay up for two years. He did. Now, surely he knew the same situation existed for two OTHER years, but he did nothing, until Obama's people came calling... Third: apparently he was warned MANY times that as a self-employed individual he was responsible for for the taxes he didn't pay. And apparently he signed acknowledgement of this responsibility. And fourth -- he also tried to inflate child-care expenses, according to the NYT..." --bethIllinois

"Geithner's expertise and work (past, present, and future) is NOT in personal finance and completion of individual tax returns -- so it's no special relevance here (compared to any other appointment). The fact that the IRS considers it a common problem and makes special allowances for it tells us something -- namely, that this doesn't really help us identify in Geithner any defect of character or ability. It's important to question -- but it's just as important to accept answers -- even when they don't yield as much drama or political traction as some might hope for." --jefft1225

"...Obama cannot begin his term with a tainted Secretary of the Treasury because of the enormity of our country's economic troubles -- and because of all the cheating, greed, corruption, and lack of oversight that enabled the mess to occur in the first place.
Confirming Geithner would be tacit affirmation that the 'anything goes' mentality of Wall Street and the financial sector of the past 8 years, will continue to one degree or another.
The Democrats who downplay Geithner's tax evasion as "a bump in the road" or a 'hiccup' or an 'honest mistake' look foolish and inept. PS I voted for Obama." --micheline1

"This is no time to play politics with the worst recession since the great depression. With respect to Clinton's AG nominees, we were not facing a global crisis that impacted the financial security of the U.S. and arguably the world. From nearly all accounts, Geithner is highly respected by both political parties as one of the most talented financial experts of our time. He has paid for his mistake and this gaffe simply highlights the confusion of our present tax system. Perhaps one the best defenses for Geithner is that now the self-employment payroll system may have an excellent chance of being revamped and simplified." billbolducinmaine

"The way the Obama team handled the Geithner issue is the most problematic piece of this controversy. Yes, Grassley and the Republicans played politics by making an issue out of the taxes and immigrant over a month after they learned of it all from the transition team. But the Obama team blew it when they tried to keep it quiet from all but the senior members of the finance committee." --parkerfl1

How Geithner Differs From Past Cabinet Picks

"The difference between Geitner and Baird/Chavez/Wood etc. is very simply politics. In the other cases these nominees were unpopular and the opposition was looking for a reason to sink the nomination, Geithner is a pick that Republicans are happy about, and they are worried about the alternative. As a taxpayer it concerns me. We are told that he is the only one who understands TARP." --myhojda

"...The tax code changes just about every year, so lots of people make mistakes (or have mistakes made on their behalf) all the time. You trust your accountant to do a good job, but it didn't happen in this case... the Geithner situation is different from Baird, et. al. because context matters. the depth of our economic problems was not such in the cases of Baird and others as it is today. Geithner, as a student of the architects of this mess, has a better position than most to be able to fix it..." --plathman

By Washington Post editors  |  January 22, 2009; 8:00 PM ET
Categories:  Wag The Blog  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati   Google Buzz   Previous: NY-Sen: Caroline's Out, Who's Next?
Next: White House Cheat Sheet: Obama's Best Friend in the Senate?


Poor Tiny Tim G. -- just trying to make ends meet - probably.

Posted by: newbeeboy | January 23, 2009 4:03 PM | Report abuse

DrainYou should be nationalized. You must be fun to play cards with...selecting what rules are imortant and which are not.

Posted by: leapin | January 23, 2009 1:34 PM | Report abuse

Geitner is insignificant compared to Eric Holder, the Attorney General nominee. If Holder were a Republican he would be crucified for being paid big bucks to keep what was being called the "death drug", OxyContin, on the market. A man or woman with integrity and a conscience would have said, NO, I won't help you keep that drug on the market. It's killing people and ruining lives!" Eventually Purdue Pharma, marketer of the drug, and its executives were fined $634 million by the Bush Justice Department for marketing fraud related to OxyContin.

Read the truth about Eric Holder from Mother Jones, one of our nation's most respected liberal publications. Published 1/14/09.

Why Eric Holder Represents What's Wrong with Washington.

Posted by: CaptainQ | January 23, 2009 11:47 AM | Report abuse

I have problems with a guy if you take him at his word, a honest mistake, being in charge with a record of such sloppiness. He sets a poor example, but I also believe a President should have the team he wants. So if Obama wants to stick with him, he should have him. Just be ready to assume the responsibilty if this gentleman proves he is not up to the job.

Posted by: vbhoomes | January 23, 2009 6:28 AM | Report abuse

The taxes Geithner didn't pay aren't that important. It's not like he made millions on deals and tried to hide them. That's the kind of tax fraud that matters to me. The amount of his slippage is really insignificant, and it's about social security and medicaid, not about income.

This guy is never going to need SS or medicaid anyway. It's ridiculous for him to get grilled on these insignificant tax issues.

My main fear about any of the economic team guys is that they won't have the guts to put in the Wall Street regulations that we need, the ones that the Bushie Republicans stripped out over the years. What needs to be nationalized should be nationalized. That's the worry. Not this petty tax stuff.

Posted by: DrainYou | January 22, 2009 11:18 PM | Report abuse

If he makes such simple mistakes, what's he doing as a nominee for Treasury Secretary? But that's Washington. Senator Hatch says you can break the law and have a Cabinet post if we think you're good enough. What else has he applied this logic to? Geithner's a finance wonk. This isn't a mistake. But the politicians think the American public are dumb enough to accept it. Just like Geithner figured the same with the IRS. Geithner is a cheat and a chintz, who thinks he's better and smarter than the system. And Obama picks another piece of candy from the Clinton Confectionary...

Posted by: disraeli_gearz | January 22, 2009 9:46 PM | Report abuse

Tim Geithner is the Fox who has been asked to guard the chicken house. To find out if waterboarding is really torture, can't we try it out on the bankers and stockbrockers and get our money back? Gitmo would be a nice hotel for them to stay and count their bonuses.

Posted by: quinnski | January 22, 2009 9:42 PM | Report abuse

I have mixed feelings on this one. Tim Geithner gets very high marks for his performance at the New York Fed, which supports his confirmation.

And yet... among Geithner's responsibilities at Treasury would be to oversee the IRS. The multiple years in which taxes were owing and Geithner's failure to pay amounts owed on a timely basis are very troubling. When one is an independent contractor, it is obvious that one is responsible for one's own taxes. On the other hand, calculating the amount owed can be tricky, as one is required to impute amounts due for Social Security as well as direct taxes owed. An issue here might be whether Geithner paid any tax during the disputed years, or whether he merely miscalculated the amount due. If the only issue was miscalculation, I would support his confirmation, albeit with some misgivings. If no tax was paid, I would not vote to confirm.

Also troubling is that Geithner didn't clear up all back taxes when this problem was first discovered-- that he did not pay amounts unpaid outside the limitations statute does not speak well to the issue of integrity for a top federal official. Again, I would give him the benefit of the doubt if tax was miscalculated-- but not if nothing was paid.

Finally, it doesn't speak well of the Obama team that the public was not informed about this for approximately a month.

Was this different than the Baird/Wood matter-- I think not. My sentiment is that we are all so scandal weary that we are no longer jolted by an impropriety of this kind. We were less jaded in 1992. The other possible explanation is gender-- were Baird and Wood treated more harshly because they were women? I favor the scandal overload explanation, but the gender interpretation is also a possible one.

Posted by: ANetliner | January 22, 2009 9:40 PM | Report abuse

So Jefftxx wrote, ""Geithner's expertise and work (past, present, and future) is NOT in personal finance and completion of individual tax returns"?

I'm going to try that explanation the next time I'm called on the carpet by the agency this man is to head.


Posted by: officermancuso | January 22, 2009 9:35 PM | Report abuse

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