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January 14, 2009—Treasury Secretary Nominee Timothy Geithner's failure to pay
four years’ worth of self-employment taxes for Social Security and Medicare is
absolutely astonishing. And as more details are released, Geithner's actions
seem even more disturbing. According to the New
York Times, Geithner still didn't correct the same type of error for some
years, even after the Internal Revenue Services flagged him for the failure to
pay the taxes in other years. To have him leading the department that manages
the IRS would be a slap in the face to the millions of self-employed Americans
who fulfill their responsibilities to correctly asses their tax burdens.
These disturbing details paint a picture of a nominee who hasn’t been fully
vetted. Unlike previous Treasury Secretary nominees, Geithner had not
distinguished himself as a corporate leader or as an academic economist. His
only significant policy accomplishment has been his role in the Bush-Paulson
bailouts. And disturbing details are emerging about his misjudgments in this
policy area as well. According to the Bloomberg wire service, Geithner pushed
for Citigroup to take over the operations of Wachovia Corp. at taxpayer
expense, even after Wells Fargo’s offer to purchase the firm without taxpayer
backing. Had Geithner prevailed, who knows how much more trouble the financial
system would be in given Citigroup’s current financial troubles.
President-Elect Barack Obama has nominated many well-qualified candidates to
serve in his administration, and, despite some policy disagreements, CEI
scholars have praised his choices for posts in the Securities and Exchange
Commission, the Federal Communications Commission, and the Department of
Housing and Urban Development. But in this choice for the Treasury Department,
the Obama transition team members clearly dropped the ball. In an effort to
please some on Wall Street and keep the bailouts going, they glossed over their
nominee’s credentials and judgment.
Geithner’s errors and/or misjudgments make him unfit to serve as Secretary of
the Treasury. His nomination should be withdrawn, and, if this does not happen,
he should be voted down by the Senate.
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