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Tax problems derail fast Senate OK for Geithner
By JULIE HIRSCHFELD DAVIS
Associated Press
January 14, 2009

WASHINGTON (AP) -- Revelations about Timothy Geithner's tax problems derailed Senate Democrats' plans Wednesday to speed him to confirmation as treasury secretary, but senators in both parties said the disclosures were unlikely to torpedo his chances to take a key post on President-elect Barack Obama's economic team.

Obama had hoped for approval by Tuesday, the day the new president is inaugurated, so Geithner could join other officials in urgent efforts to revive the failing national economy. Now, Geithner's confirmation hearing isn't scheduled until next Wednesday, with Senate debate and a vote sometime after that.

A top Republican objected to scheduling a confirmation hearing this Friday at the Senate Finance Committee after the panel disclosed Geithner had failed to pay $34,000 in taxes several years ago. Democrats were working to clear away the obstacle, holding out hope that he could still be confirmed the day Obama is sworn in.

Democrats and Republicans on the Finance Committee voiced strong support for Geithner, who was phoning senators individually in an effort to persuade them his tax problems were the result of innocent mistakes, not deliberate attempts to avoid paying the Internal Revenue Service.

Senators' comments suggested that Geithner's tax troubles are being viewed on Capitol Hill more as embarrassing mistakes than as disqualifying misdeeds. That's despite the fact that tax problems have sunk other government nominees, including Zoe Baird, Bill Clinton's choice for attorney general, who stepped aside when word leaked that she had hired illegal immigrants as household workers and failed to pay their Social Security taxes.

"It's an honest mistake," said Sen. Max Baucus, the Montana Democrat who chairs the committee, adding that Geithner's confirmation was "a given."

Baucus said he still hoped for a Friday hearing. Geithner is "very, very competent, and add to that the country needs to have an economic team in place immediately to address the dire economic problems," he said.

Sen. Jon S. Kyl of Arizona, the No. 2 Republican, is blocking the hearing by insisting on rules that require a full week's notice for scheduling such a session, according to an aide close to the confirmation process. Kyl's objection was disclosed on condition of anonymity because the aide was not authorized to announce it.

Sen. Charles E. Grassley, the senior Finance Republican, said he was not inclined to oppose a quick hearing. He planned to meet individually with other GOP members of the panel to see whether they could agree on the Friday session.

"I'm going to see what collective judgment we have," Grassley said.

Whenever he goes before the Finance panel, Geithner -- whose myriad responsibilities in his new post would include authority over the IRS -- is likely to face a grilling about his tax errors.

He failed to pay self-employment taxes for money he earned from 2001 to 2004 while working for the International Monetary Fund, according to materials released by the committee Tuesday.

>> Continued -- Page 1 2

Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

 

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