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Senate confirms Geithner as treasury secretary
2009-01-26
WASHINGTON - New York Federal Reserve Bank President Timothy Geithner won confirmation Monday as President Barack Obama's treasury secretary despite personal tax lapses that turned more than a third of the Senate against him. "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," Obama told the audience before Geithner was sworn into office by Vice President Joe Biden. The Senate voted 60-34 to put Geithner in charge of the administration's economic team as it races to halt the worst financial slide in generations. The swearing-in followed less than an hour later, the administration seeking to emphasize that it was wasting no time in trying to address the financial crisis. Obama said there had been a "devastating loss of trust and confidence" and that the financial system was in "serious jeopardy." In his remarks, Geithner said the new administration would work first to stabilize the financial system and get the economy growing again and then would move to reform the system. "We are at a point of maximum challenge for our economy and our country," Geithner said to a standing-room only audience in Treasury Department's ornate Cash Room. On hand were Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Lawrence Summers, now director of Obama's National Economic Council. Referring to Geithner's tax problems, White House spokesman Robert Gibbs said Geithner had made amends -- he has paid the taxes and penalties -- and possessed the talent needed to steer the nation out of the crisis. Geithner, 47, served as undersecretary of the treasury for international affairs during the Clinton administration. As president of the New York Federal Reserve Bank, he's been a key player in the government's response to collapsing financial institutions and the housing and credit markets since last summer. The ambivalence dogging lawmakers was reflected in the fact that a third of the chamber voted against Geithner, in large part because of his failure to pay all his taxes on income received from the International Monetary Fund in 2001 and in three subsequent years. Ten Republicans overlooked that matter and voted for confirmation. One Republican, Sen. Arlen Specter of Pennsylvania, told reporters earlier in the day that he would vote yes, only to change his mind and vote no. Three Democrats and one independent voted against Geithner's confirmation, including Sen. Robert C. Byrd, D-W.Va., the longest-serving senator in history. "Had he not been nominated for treasury secretary, it's doubtful that he would have ever paid these taxes," Byrd said in a statement. For the prevailing majority, the real reason for Geithner's likely confirmation appears to be less a matter of bipartisan cooperation than political survival. Lawmakers of all stripes are eager to set the economy in the right direction long before voters judge their progress in the 2010 midterm elections. "People make mistakes and commit oversights," said Sen. Orrin Hatch, R-Utah. "Even the most intelligent and gifted -- two adjectives that certainly apply to Mr. Geithner -- make errors in their financial dealings." Even so, not everyone was convinced that the need for a speedy confirmation should trump concerns about the candidate. Sen. Susan Collins, R-Maine, didn't buy Geithner's contention that he skipped paying some taxes because he was confused by the complexities of the tax code. "They were described by the nominee himself as 'careless mistakes,'" Collins said in prepared remarks. "It has become clear to me that this is not merely a matter of complexity leading to mistakes, but of inexcusable negligence." Sen. Mike Enzi, R-Wyo., agreed and noted that his is one of the few voices of dissent. "Nominees for positions that do not oversee tax reporting and collection have been forced to withdraw their nomination for more minor offenses. They have been ridden out of town on a verbal rail," Enzi told the Senate. "The fact that we're in a global economic crisis is not a reason to overlook these errors." "The Senate," he scolded, "is not supposed to be a group of 'yes' men." It wasn't. Democratic Sen. Tom Harkin of Iowa lined up against the nominee, asking how someone of Geithner's "financial sophistication" could innocently not pay the taxes and then head up the agency that oversees the IRS. "How can Mr. Geithner speak with any credibility or authority?" Harkin said. Specter earlier in the day had told WHP radio in Harrisburg, Pa., that he planned to vote for confirmation, only to change his mind and vote no later in the evening. "I'm prepared to back Obama on this issue," Specter had said in the interview. "The economic situation is so tense right now and I don't want see us go back to square one and wait several weeks or longer for the process to bring in a new treasury secretary." The 10 Republicans who voted yes were Sens. Bob Corker of Tennessee, John Cornyn of Texas, Mike Crapo of Idaho, John Ensign of Nevada, Lindsey Graham of South Carolina, Judd Gregg of New Hampshire, Hatch of Utah, Richard Shelby of Alabama, Olympia Snowe of Maine and George Voinovich of Ohio. The Democrats voting no were Sens. Byrd, Russell Feingold of Wisconsin and Harkin of Iowa. Also voting no was Sen. Bernie Sanders, I-Vt., who caucuses with Democrats. Sens. Kit Bond, R-Mo., Sherrod Brown, D-Ohio, Edward M. Kennedy, D-Mass. and Ron Wyden, D-Ore., were absent. Senate seats representing Minnesota and New York are vacant. The Senate Finance Committee approved Geithner's confirmation in an 18-5 vote last week. However ambivalent, some Senate Republicans were supporting him. Specter, for example, said he's not happy that Geithner didn't pay up all of the $42,702 in back taxes and interest until after he was nominated to become treasury secretary. As such, Geithner will be directing the nation's economic recovery from the worst financial crisis in three generations, a task that could define the first two years of Obama's term. Specific duties include directing how $350 billion of already existing Wall Street bailout money is to be spent, then making the case to Congress and the public if more is needed. In addition, Congress is working on an $825 billion economic recovery package that dedicates about two-thirds to new government spending and the rest to tax cuts. Geithner will be playing a big role in disbursing that money, too.
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