Democratic and Republican senators say a full-court press by Barack Obama’s transition team is likely to keep ethical questions from sinking the nomination of Treasury Secretary-designee Timothy Geithner.
As Obama pressed senators on his economic recovery plan Tuesday, The Wall Street Journal reported that Geithner had failed to pay $42,000 in taxes and had employed a housekeeper whose work permit had expired.
But minutes after the news broke, the Obama transition team pushed back with talking points — distributed to Capitol Hill, K Street and congressional reporters — in which it portrayed the problems as simple mistakes or oversights.
The talking points noted that Geithner had paid off all of his back taxes — although nearly $26,000 of them weren’t paid until November, just before his nomination went to the Senate Finance Committee for official review.
The talking points also said that the legal status of Geithner’s former housekeeper didn’t lapse until the last three months of her employment.
Members of the Finance Committee gathered quickly for a closed-door meeting with Geithner, then released a 30-page report explaining the complexities of Geithner’s unusual employment arrangement with the International Monetary Fund and how it was that he could have mistakenly underpaid $42,000 in taxes.
Finance Committee Chairman Max Baucus (D-Mont.) said the revelations did not disqualify Geithner, and he said it was crucial for Obama to have a new Treasury secretary in place when he takes office next week. Sen. Charles Schumer (D-N.Y.) said the economic problems facing the country are too serious to allow Geithner’s nomination to go down.
Obama stood by his nominee.
“The president-elect chose Tim Geithner to be his treasury secretary because he’s the right person to help lead our economic recovery during these challenging times,” incoming White House Press Secretary Robert Gibbs said. “That service should not be tarnished by honest mistakes, which, upon learning of them, he quickly addressed. He made a common mistake on his taxes and was unaware that his part-time housekeeper’s work authorization expired for the last three months of her employment.”
The Senate Finance Committee had been aware of Geithner’s tax problems since Dec. 5, Senate aides said.
Sen. Orrin G. Hatch (R-Utah) said he still supports Geithner.
Iowa Sen. Charles Grassley (R-Iowa), the ranking member on the Finance Committee, has privately questioned whether Geithner’s problems should derail his nomination. But he has refused to comment publicly.
In a put-up-or-shut-up challenge late Tuesday, Baucus asked members of the committee to tell him by Wednesday morning whether they would object to holding Geithner’s confirmation hearing on Friday — earlier than the usual seven-day notice requirement would allow.
Majority Leader Harry Reid (D-Nev.) dismissed the Geithner issues as “a few minor hiccups” and said they would not derail his nomination. “I’m not concerned at all,” Reid said as he went into a bicameral Democratic leadership meeting in House Speaker Nancy Pelosi’s office on Tuesday afternoon.
“Tim came to the committee, admitted he had made some mistakes and was very contrite. In my opinion, these mistakes were not at all disqualifying,” added Schumer, a member of both the Democratic leadership and the Finance Committee. “I continue to strongly support his nomination and, given the tough economic conditions, hope we can confirm him as quickly as possible.”
The extraordinary effort to save Geithner stands in stark contrast to the Obama team’s handling of commerce secretary nominee Bill Richardson, who withdrew his nomination quickly at the first whiff of a scandal in New Mexico.
If Geithner survives, he will have avoided the fate of Washington insiders Zoe Baird and Kimba Wood, Clinton administration attorney general nominees who were undone by scandals involving taxes and illegal immigrants.
