Senate Confirms Geithner As Treasury Secretary

New York Federal Reserve Bank President Timothy Geithner won confirmation Monday as President Barack Obama's Treasury secretary despite personal tax lapses that turned more than a third of the Senate against him.

"Tim's work and the work of the entire Treasury Department must begin at once. We cannot lose a day, because every day the economic picture is darkening, here and across the globe," Obama said before Geithner was sworn into office by Vice President Joe Biden.

The Senate voted 60-34 to put Geithner in charge of the administration's economic team as it races to halt the worst financial slide in generations. The swearing-in followed less than an hour later, the administration seeking to emphasize that it was wasting no time in trying to address the financial crisis.

Obama said there had been a "devastating loss of trust and confidence" and that the financial system was in "serious jeopardy."

In his remarks, Geithner said the new administration would work first to stabilize the financial system and get the economy growing again and then would move to reform the system.

"We are at a point of maximum challenge for our economy and our country," Geithner said to a standing-room only audience in the Treasury Department's ornate Cash Room. On hand were Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Lawrence Summers, now director of Obama's National Economic Council.

Referring to Geithner's tax problems, White House spokesman Robert Gibbs said Geithner had made amends — he has paid the taxes and penalties — and possessed the talent needed to steer the nation out of the crisis.

Geithner, 47, served as undersecretary of the Treasury for international affairs during the Clinton administration. As president of the New York Federal Reserve Bank, he's been a key player in the government's response to collapsing financial institutions and the housing and credit markets since last summer.

The ambivalence dogging lawmakers was reflected in the fact that a third of the chamber voted against Geithner, in large part because of his failure to pay all his taxes on income received from the International Monetary Fund in 2001 and in three subsequent years.

Ten Republicans overlooked that matter and voted for confirmation. One Republican, Sen. Arlen Specter of Pennsylvania, told reporters earlier in the day that he would vote yes, only to change his mind and vote no.

Three Democrats and one independent voted against Geithner's confirmation, including Sen. Robert C. Byrd (D-WV), the longest-serving senator in history.

"Had he not been nominated for Treasury secretary, it's doubtful that he would have ever paid these taxes," Byrd said in a statement.

For the prevailing majority, the real reason for Geithner's likely confirmation appears to be less a matter of bipartisan cooperation than political survival. Lawmakers of all stripes are eager to set the economy in the right direction long before voters judge their progress in the 2010 midterm elections.

"People make mistakes and commit oversights," said Sen. Orrin Hatch (R-UT). "Even the most intelligent and gifted — two adjectives that certainly apply to Mr. Geithner — make errors in their financial dealings."

Even so, not everyone was convinced that the need for a speedy confirmation should trump concerns about the candidate. Sen. Susan Collins (R-ME) didn't buy Geithner's contention that he skipped paying some taxes because he was confused by the complexities of the tax code.

"They were described by the nominee himself as 'careless mistakes,' " Collins said in prepared remarks. "It has become clear to me that this is not merely a matter of complexity leading to mistakes, but of inexcusable negligence."

Democratic Sen. Tom Harkin of Iowa also lined up against the nominee, asking how someone of Geithner's "financial sophistication" could innocently not pay the taxes and then head up the agency that oversees the IRS.

"How can Mr. Geithner speak with any credibility or authority?" Harkin said.

As Treasury secretary, Geithner will be directing the nation's economic recovery from the worst financial crisis in three generations, a task that could define the first two years of Obama's term.

Specific duties include directing how $350 billion of already existing Wall Street bailout money is to be spent, then making the case to Congress and the public if more is needed.

In addition, Congress is working on an $825 billion economic recovery package that dedicates about two-thirds to new government spending and the rest to tax cuts. Geithner will be playing a big role in disbursing that money, too.

From the Associated Press

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