Geithner Offered Early Notice on Tax Troubles
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.
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:
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
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