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Obama's man missed tax payments

Source: Agencies | January 15, 2009, Thursday | Print Edition

TIMOTHY Geithner, United States President-elect Barack Obama's pick to head the Treasury Department and try to fix the economy, will probably face tough questioning at his confirmation hearing after public revelations he failed to pay US$34,000 in taxes several years ago.

Senate Democrats are pressing to schedule a quick confirmation hearing for Geithner tomorrow, hoping to tee up swift approval of his nomination on Inauguration Day next Tuesday.

But newly released information about the tax goofs by Geithner, regarded as a brilliant financial markets specialist well-positioned to deal with the nation's considerable economic problems, could complicate the process.

And an aide close to the confirmation process says that Senator Jon S. Kyl, the No. 2 Republican on the committee, has objected to a fast track for Geithner.

If the Republican refuses to drop his objection, Geithner will not be confirmed until after Obama is sworn in as president next Tuesday.

The disclosures virtually guarantee a tough hearing for Geithner before the Senate Finance Committee, which is considering his nomination.

Geithner 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 on Tuesday.

He paid some of the taxes in 2006, after an IRS audit discovered the discrepancy for taxes paid in 2003 and 2004. But it was not until much later ?? days before Obama tapped him to head Treasury late last year ?? that Geithner paid back most of the taxes, incurred in 2001 and 2002.

He did so after Obama's transition team found that Geithner had made the same tax mistake in his first two years at the IMF as the one the IRS found he made during his last two years there.

The panel's report also noted that Geithner briefly employed a housekeeper in 2005 whose legal immigrant work status had lapsed.

Taken together, the disclosures cast a cloud over what otherwise had appeared to be a smooth road to confirmation for Geithner.

Obama's transition team told Finance Committee Chairman Max Baucus of Montana and senior Republican Charles E. Grassley of Iowa of the tax problems in early December, but most rank-and-file members only learned of them recently.

Some heard about them for the first time at a closed-door committee meeting on Capitol Hill on Tuesday afternoon.

Later, Geithner joined the huddle to defend himself and address questions about what he and Obama's team called a mistake.
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