Geithner nominaton trouble?
Posted: Tuesday, January 13, 2009 3:19 PM by Domenico Montanaro
From NBC's Kelly O'Donnell
The Senate Finance Committee is currently holding what's being called an "emergency Senators only meeting."
The committee is discussing nominations.
Tim Geithner, Treasury Secretary nominee, is here with Obama transition officials to discuss a legal issue involving a personal household employee. The specifics have not been disclosed. We are checking on a report that Geithner may have an issue concerning a household worker and the withholding of social security taxes.
Geithner's confirmation hearing before this committee is scheduled for Thursday Jan 15.
That kind of issue unraveled past nominations like Zoe Baird (Clinton) and in a related way Kimba Wood (Clinton). The "emergency" meeting began at 2:30.
*** UPDATE *** From NBC's Chuck Todd and Domenico Montanaro
Sources close to the transition say Geithner did not pay some taxes when he worked for the International Monetary Fund. The error was discovered in November 2008, and the taxes have since been repaid.
With regard to the housekeeper, transition officials say Geithner verified legal status when she was hired, but that her papers expired while still employed.
Transition officials also say Geithner initiated the meeting with the committee in an effort to be forthright.
"The President-elect chose Tim Geithner to be his Treasury Secretary because he's the right person to help lead our economic recovery during these challenging times," Obama spokesman Robert Gibbs said in a statement. "He's dedicated his career to our country and served with honor, intelligence and distinction. That service should not be tarnished by honest mistakes, which, upon learning of them, he quickly addressed. He made a common mistake on his taxes, and was unaware that his part-time housekeeper's work authorization expired for the last three months of her employment. We hope that the Senate will confirm him with strong bipartisan support so that he can begin the important work of the country."
*** UPDATE 2 *** Reaction from the meeting
From NBC's Kelly O'Donnell
Sen. Debbie Stabenow (D-MI) says upon exiting the emergency meeting... "He's [Geithner] been very forthright in relating to us any mistakes...What we talked about has been fully disclosed to the Transition Office."
Stabenow indicates that, in her view, Democrats would be unlikely to withdraw support from Geithner. Republican Sen. Orrin Hatch also indicates he has not seen a reason that would disqualify Geithner.
*** UPDATE 3 *** From NBC's Chuck Todd and Domenico Montanaro
The transition contends Geithner paid all income taxes while working at the International Monetary Fund, but made a "common mistake" in relation to "self-employment" taxes in 2001 and 2002.
The transition team discovered the error during the vetting process. Geithner learned of the problem on Nov. 21, 2008 and repaid the back taxes with interest, transition officials said.
The amounts:
Total: $25,970
2001: $3,320 ($2,364 tax, $956 interest)
2002: $22,650 ($16,812 tax, $5,838 interest).
The transition team says there was no intention by Geithner to evade taxes.
Additionally, the IRS brought the issue of unpaid self-employment taxes to Geithner's attention in 2006 when it initiated an audit of Geithner's taxes for 2003 and 2004. As a result, Geithner had to pay more than $17,000 in taxes ($17,230 total -- $14,847 in tax; $2,383 interest).
With regard to the housekeeper, Geithner had one in 2004 and 2005; the family verified that she was employed to work in the United States at the time, per the transition. But while she was still working for them, her papers expired.
The transition says it didn't know the housekeeper's authorization had expired. Three months later, she left to have a baby and then later married a U.S. citizen. She was then granted a green card.
Per CNBC's John Harwood a Senate leadership source calls the situation "manageable." Max Baucus, the chair of the committee, called the developments "serious," while on CNBC, but added that they shouldn't derail his confirmation.
NBC's Ken Strickland reports that Baucus says Geithner made "honest mistakes" and that those mistakes should not disqualify him from being the next Secretary of the Treasury. Chuck Schumer and Debbie Stabenow, other committee Democrats, also support Geihtner and think he will utimately be confirmed.
Baucus added that the bipartisan Finance Committee leadership will release a report on Geithner matter (probably today). Baucus said Geithner made some "serious" errors, and corrected those errors, and errors do not rise to the level of disqualification.
The committee learned several weeks ago about these matters and used this time to investigate so a report could be written, Baucus said.
Schumer added that he supports Geithner and claims that some other Republicans on the committee will also. He didn't give names. The only Republican to comment after the meeting was Orin Hatch, who said he supports him.
Democratic committee members Cantwell, Wyden and Rockefeller said only "no comment" when they left the meeting. Republican member Jon Kyl was a "no comment" as well.
