Timothy Geithner ’83 was sworn in as secretary of the Treasury after being confirmed by the Senate on Monday night, almost a week after President Barack Obama took office. Geithner has been heavily criticized throughout the confirmation process for his role in the federal economic bailout and the disclosure that he had neglected to pay over $34,000 in federal taxes.
The 60-34 confirmation vote largely followed party lines, with all but three Democrats voting in favor of Geithner’s confirmation and all but nine Republicans voting against.
Senators opposing Geithner’s confirmation drew attention to his past failure to pay federal taxes for Medicare and Social Security between 2001 and 2004, while he was working as a senior official at the International Monetary Fund.
Geithner voluntarily paid the taxes for 2003 and 2004 after an IRS tax audit revealed the error in 2006. Although he was not legally required to pay his 2001 and 2002 back taxes, he did so in November after the Obama transition team drew attention to the issue.
Geithner has said previously that his failure to pay the $34,000 was a “completely unintentional” error.
Sen. Chuck Grassley, R-Iowa, who grilled Geithner during his Jan. 21 confirmation hearing before the Senate Finance Committee, said shortly before the vote that he did not want to confirm Geithner because he believed the head of the Treasury Department ought to comply with the law.
“I must uphold the Finance Committee’s vetting process,” Grassley said. “I must vote for the character and integrity of those who work in government.”
Sen. Jeff Sessions, R-Ala., pointed to a six-foot tall poster of the International Monetary Funds’ tax policy as he questioned how Geithner could have failed to pay the taxes.
“I am not taken in by the idea that this tax problem is a minor matter,” Sessions said.
Other senators — including Sen. Tom Harkin, D-Iowa, who voted against Geithner’s confirmation — criticized Geithner for his actions during the financial crisis as president of the Federal Reserve Bank of New York. Harkin said Geithner blamed the Federal Reserve for the crisis without admitting his own culpability as head of the institution. He also said Geithner had not been completely forthright in describing how he intends to correct these perceived policy failures.
Harkin said he hoped he was wrong about Geithner’s qualifications.
“Nothing would make me happier than for Mr. Geithner to prove me wrong by serving with distinction as Treasury Secretary and cracking down on the casino capitalism that has derailed this country,” Harkin said.
Sen. Jim Inhofe, R-Okla., said his vote against Geithner was a repudiation of the government’s $700-billion bailout of financial institutions. He called on other senators to show their disapproval of the expansion of federal power by voting against the confirmation.
“You can be redeemed by voting against Geithner,” Inhofe said.
Sen. Chris Dodd, D-Conn, spoke in Geithner’s favor, arguing that the president should have some latitude in choosing the members of his cabinet.
“[Geithner is] one of the most talented people I’ve met in the area of financial services,” he said.
Sen. Dick Durbin, D-Ill., said the severity of the economic downturn was a major reason to support Geithner’s confirmation and emphasized the need for the Treasury Department to take swift action to deal with the crisis. Durbin read a list of companies that together had cut over 47,000 jobs as evidence of the growing crisis.
“It’s abundantly clear that our economy is in a tailspin,” Durbin said. “It’s clear to me as well that we will need leadership in the Department of the Treasury.”
Fowler pointed to the weak economy as the primary factor in Geithner’s confirmation. She said Republicans could have used Geithner’s confirmation vote to show their disapproval of the bailout, but likely chose not to filibuster because doing so would have been counterproductive and politically difficult.
“This has gone on just about long enough for the Republicans to be the issue rather than Geithner,” she said.