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Unfortunately I believe that we are limited in what we can focus on. I think that if we proceed with the partisan sideshow of prosecuting Bush admin. officials, healthcare will get lost in the brouhaha.
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Geithner Offered Early Notice on Tax Troubles

POSTED: 03:04 PM ET, 01/15/2009 by Derek Kravitz

Tax problems have plagued presidential cabinet picks before.

Jocelyn Elder's confirmation as President Bill Clinton's U.S. Surgeon General was held up in 1993 after questions were raised about her finances, including her husband's failure to pay Social Security or income taxes for a nurse that cared for his mother.

A decade later, former Treasury Secretary John W. Snow was criticized for a whole host of tax and benefit issues that his former employees alleged at Jacksonville, Fla.-based railroad company, CSX.

Both Elders and Snow were confirmed, albeit after somewhat-contentious confirmation hearings.

Timothy F. Geithner

But revelations that Timothy Geithner, President-elect Barack Obama's pick to run the Treasury Department, failed to pay parts of his income taxes -- a sizable problem for the incoming secretary of the nation's chief financial body -- has not drawn much ire from lawmakers or the public in the midst of an economic downturn.

The Treasury Secretary nominee failed to pay self-employment taxes on his International Monetary Fund income from 2001 to 2004. Geithner has paid $34,023 in back taxes along with $8,679 in interest for the mistakes -- uncovered in part during a 2006 audit and in more fully in recent vetting by Obama's transition team.

Appearing before the Senate Finance Committee on Tuesday, Geithner told lawmakers that he had failed to pay Social Security and Medicare taxes because he mistakenly thought that his old employer was deducting those taxes from his paycheck.

A summary of Geithner's tax troubles:

More Investigations Documents

Geithner's confirmation hearing has been delayed until next Wednesday, after Obama's swearing-in ceremony. Stuart Levey, Treasury's undersecretary for terrorism and financial intelligence, has been tapped to run the department pending Geithner's confirmation.

For the most part, lawmakers across the aisle have indicated Geithner will be confirmed despite the tax troubles.

"I don't think I see enough in there to cause a problem," said Sen. John Ensign (D-Nev.). Senate Majority Leader Harry Reid (D-Nev.) also dismissed Geithner's tax troubles as "a few little hiccups."

Sen. Orrin Hatch (R-Utah) said Republicans interested in derailing Geithner should think again. "They're not going to get anybody better than him from this administration for treasury secretary," he said.

"In the scandal-obsessed capital, the latest public peccadillo has been met by uncharacteristic indifference," The Post's Dana Milbank wrote.

So what happened?

Obama's transition team made note of Geithner's errors to members of the Senate Finance Committee on Dec. 5, well before the confirmation process. Two weeks later, Geithner met with committee aides "to answer questions about the employment tax issue and other issues identified during the course of the document review," according to documents released by the committee.

That early notice may have helped Geithner avoid further trouble.

By Derek Kravitz |  January 15, 2009; 3:04 PM ET Hot Documents
Previous: White House E-Mails Lost and Found, Charges Filed Against 'Daredevil' Pilot, FBI's Blago Watch | Next: Hurricane Katrina and Bush's Legacy


Please email us to report offensive comments.

I disagree with the statement that his problems "has not drawn much ire from lawmakers or the public". Objections and reactions from the taxpaying public have been vehement and heated. This man tried to avoid paying his fair share of taxes. He was caught once and paid that amount but failed to pay the same taxes again until he was vetted.

Posted by: Ethicist | January 15, 2009 8:36 PM

How is it possible that so many in the "bureaucratic class" seem to thumb their noses at the IRS and avoid jail? If the "average American taxpayer" owed $43,000 to the IRS, they'd be paying interest and penalties for the rest of their lives, even if they managed to avoid incarceration.

And what does this further say about the IRS? They've been criticized for the billions in inappropriate refunds they've sent out as well as the billions in taxes (chiefly corporate) they've failed to collect. The agency should be the first on the list for scrutiny for efficiency and waste, and serious consideration should be given to major management turnover.

Posted by: srpinpgh | January 16, 2009 9:47 AM

Geithner is the true poster boy of Obama's clarion call for personal responsibilty-- for us, not for them. When will the contradictions come to life.

Posted by: Donschott | January 21, 2009 10:29 AM

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