greased path to confirmation as treasury secretary is a sign of the severity of the recession and congressional willingness to give President Barack Obama the benefit of the doubt and look the other way. The Senate vote, which could take place as early as Monday, comes amid lingering questions over the failure by the future Internal Revenue Service boss to pay all his taxes on income received from the International Monetary Fund in 2001 and then repeating the same error in three subsequent years. “In more quiescent times, he would have been thrown over the side,” said Ross Baker, a Rutgers University political scientist. He suggested Geithner's nomination was helped by the deepening financial crisis, initial good will toward Obama and Geithner's reputation as a financial wizard. Baker cites historical precedent from the American Civil War in the 1860s: “Abraham Lincoln was willing to overlook Ulysses S. Grant's excessive drinking because he was a brilliant war commander.” Given the severity of the present crisis, the administration and lawmakers of both parties appear willing to give Geithner a pass. They cite his vast financial experience as head of the New York Fed and work at the Treasury Department under three presidents. He is the designated point man for the administration's economic rescue effort. Obama has offered his full support for Geithner, saying he is confident the Senate will confirm him despite his “innocent mistake.” Geithner's mandate is to lift the economy out of a deep ditch, negotiate through the intricacies of arcane financial relationships and help sell Obama's evolving $825 billion stimulus package. He helped craft the government's $700 billion Troubled Asset Relief Program and knows it inside out. “These are not normal times,” said Sen. Kent Conrad, a North Dakota Democrat. Picking a new nominee for the post could cause a delay of weeks at a time when Obama most needs a treasury chief in place. “I think everybody's holding their nose and pushing him through so they can deal with the markets, which are really flapping about right now, and also have somebody home at Treasury to defend this stimulus package,” said Paul Light, professor of public service at New York University. “He's seen as too smart to fail.” For skeptical senators, it may require a leap of faith. Despite his resume and reputation for meticulous analysis, Geithner by his own account was careless about preparing his taxes, even as his star was rising in the financial world. He was flummoxed by TurboTax, a popular income tax preparation computer program used by millions of people. He neglected to closely read IMF yearly statements warning him of his personal liabilities for the Medicare and Social Security taxes in question, even though he signed the statements saying he understood that. After giving up on TurboTax, he hired a tax preparer, who, he claimed, also failed to catch the errors. Geithner also incorrectly claimed summer camp for his children as a dependent-care deduction. He paid the back taxes plus interest for the years 2003 and 2004 only after being audited by the IRS. But he did not pay taxes he owed for 2001 and 2002, even though he had made the same mistakes for those years – until last fall, shortly before he was nominated by Obama to be treasury secretary. It's the kind of behavior that raised a lot of eyebrows among ordinary taxpayers. “My phone lines lit up,” said Sen. Pat Roberts, a Kansas Republican. He said people were asking, “Why we are considering a nominee for treasury secretary who would not pay the taxes that he owed?” “I made a series of mistakes, but they were not intentional mistakes,” Geithner told the Senate Finance Committee. “I've corrected them. But they're my responsibility.” The show of humility seemed to work. Geithner's nomination was endorsed by the committee 15-8 last Thursday and sent on to the full Senate. The IMF, which has a complicated tax system for its workers, considered Geithner a private contractor rather than a regular employee. He was subject to self-employment taxes, which include what is ordinarily the employer's share of Social Security and Medicare taxes. Geithner failed to pay $34,000 in such taxes, although now has paid it all. These words may be ringing in Geithner's ears: “Those of us who manage the public's dollars will be held to account, to spend wisely, reform bad habits, and do our business in the light of day, because only then can we restore the vital trust between a people and their government.” From a Republican critic? No, from Obama's inaugural address. And the president followed it up the next day by imposing strict new ethics and transparency rules on his administration.
