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Senate Confirms Geithner

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Timothy Geithner was sworn in as the nation’s 75th Treasury secretary Monday, immediately after winning Senate confirmation of his nomination.

Members of the Senate ended up voting 60-34 to confirm Geithner.

Confirmation of Geithner, former president of the New York Federal Reserve Bank, was delayed several weeks after it was disclosed that Geithner had failed to pay self-employment taxes on his earnings while he was a top official at the International Monetary Fund from 2001 to 2004.

Earlier, during the Clinton administration, Geithner, 47, served as undersecretary of the Treasury for international affairs.

As president of the New York Fed, Geithner has been a key player in government efforts to respond to the collapse of financial institutions and the turmoil in the housing and credit markets.

In September 2008, Geithner was involved in making the decision to bail out American International Group Inc., New York; in setting the terms for the bailout; and in bringing in Edward Liddy, the former chief executive of Allstate Corp., Northbrook, Ill., to be AIG’s chairman.

The New York Fed also is overseeing the government’s 79.9% ownership of AIG, and it recently designated a 3-member team of U.S. business leaders to manage the nation’s investment in AIG while AIG sells assets to pay back the government. At one point, AIG owed the government about $160 billion.

Frank Keating, president of the American Council of Life Insurers, Washington, sent Geithner congratulations.

“In his new role, Geithner will face great challenges,” Keating says in a statement. “We offer him our very best in helping to bring an economic and financial recovery to our nation. We also look forward to working with him as he leads initiatives to stabilize the financial markets and participates in financial services reform efforts. The ACLI will be seeking to enlist him in efforts to modernize the nation’s financial services system, including an enhanced federal presence in insurance regulation.”

Geithner received support from 10 Republicans during the confirmation vote, but 3 Democrats and 1 independent voted against him.

The Obama administration found while vetting Geithner that Geithner had paid federal Medicare and Social Security taxes for 2003 and 2004 only after the Internal Revenue Service audited him in 2006.

The statute of limitations for the 2001 and 2002 taxes had run out.

Geithner paid the 2001 and 2002 taxes in November 2008, after the Obama team vetters raised questions about those obligations.

Geithner said that he had made a stupid but innocent mistake, and that he had been advised in 2004 by an accountant that he did not owe the self-employment taxes.

Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, managed the confirmation process for Geithner and later gave Geithner strong support.

“President Obama’s economic team has the right mix of talent and experience to protect taxpayer dollars and quickly and safely guide the economy back on course,” Baucus said.


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