Geithner ‘83 testifies, confirmation likely
By Anya Perret, The Dartmouth Staff
Published on Thursday, January 22, 2009
Treasury Secretary nominee Timothy Geithner '83 faced tough questions about his role in the federal bailout plan and his previous failure to pay $34,000 in taxes during his confirmation hearing before the U.S. Senate Finance Committee on Wednesday. No committee member publicly expressed opposition to Geithner's nomination, likely paving the way for his confirmation as early as next week.
Geithner's confirmation hearing became heated at times, as he faced criticism from members of both parties. Several senators asked pointed questions about his role in planning the government bailout of financial institutions when he was president of the New York Federal Reserve. Geithner was also questioned about his failure to pay more than $34,000 in Medicare and Social Security taxes from 2001 to 2004, which coincided with his employment at the International Monetary Fund from 2001 to 2003.
The consensus among various senators and congressional aides, though, was that Geithner would pass the committee and his confirmation would be brought before the full Senate, according to public statements released after the hearing.
Geithner sought to preempt some of these concerns during his remarks, saying that he thought the $700-billion bailout had not been implemented in an ideal manner.
He also took full responsibility for the "completely unintentional" errors involved in his failure to pay the $34,000 in taxes.
The financial system did not function as it should have during the economic crisis, Geithner said, explaining that he plans to reform the bailout plan, according to a transcript of his prepared remarks provided by C-SPAN.
"In this crisis, our financial system failed to meet its most basic obligations," he said. "We have to fundamentally reform this program to ensure that there is enough credit available to support recovery. We will do this with tough conditions to protect the taxpayer and the necessary transparency to allow the American people to see how and where their money is being spent and the results those investments are delivering."
Geithner added that President Barack Obama will take significant steps in the coming weeks to help banks, homeowners and local governments, regardless of Geithner's confirmation status.
"He's going to lay out a comprehensive plan for addressing the housing crisis in this country, which has been so central to the recession and its basic causes," Geithner said during the hearing.
Several senators will submit further questions for the record before the Finance Committee votes, according to Jill Kozeny, communications director for committee member Sen. Chuck Grassley, R-Iowa.
Grassley, in the hearing, asked Geithner whether he believes the government was adequately transparent in its use of taxpayers' money for the bailout plans. He also questioned Geithner about Maiden Lane, the entity created to take over Bear Stearns' troubled assets.
Grassley did not say he would vote against Geithner.
Geithner will likely be confirmed by the Senate, government professor Dean Lacy said in an e-mail to The Dartmouth.
"A prolonged hearing may cause the stock market to wobble, and neither party wants that right now," Lacy said.
Lacy added that the committee hearings may seem dramatic now, but their tone is irrelevant as long as Geithner receives enough votes. Even a narrow confirmation vote will not affect his performance in office, Lacy said.
Although Lacy said there is no doubt Geithner will be confirmed, he explained that a narrow vote might occur if Republicans want to show party solidarity and remind observers they have enough votes to filibuster.
"The vote on Geithner will be forgotten the day after it's taken," Lacy added in an interview.
William Lynn '76, deputy Defense secretary nominee, also faces opposition in his confirmation process. A former undersecretary of defense in the Clinton administration and more recently senior vice president of government operations and strategy at the defense firm Raytheon, Lynn appeared before the Senate Armed Services Committee two weeks ago for his confirmation hearing, and was asked about his recent work lobbying for Raytheon.
Obama had pledged during his campaign not to nominate candidates who had served as registered lobbyists within the past two years.
Eight of Obama's appointees have already been confirmed, including former Sen. Hillary Clinton,. D-N.Y., as secretary of State.