Delayed hearing means more criticism for Geitner
By BRETT J. BLACKLEDGE – 6 minutes ago
WASHINGTON (AP) — President-elect Barack Obama's choice for Treasury secretary is becoming a national punchline for late-night comics, a clear sign that not paying your taxes is a growing problem in the public's eyes if you're the guy tapped to oversee the IRS.
Obama and many of the senators involved in confirming Timothy Geithner maintain that concerns about his failure to pay $34,000 in taxes isn't enough to cost him the Treasury job, which includes oversight of the IRS and, perhaps more significantly, Obama's economic recovery plan.
But the delay in Geithner's confirmation hearing — now scheduled for Wednesday — means more time for the public's unease with Geithner's problems to build, a fact he seemed to appreciate Thursday. He continued his courtesy visits to Senate offices to personally answer any questions senators might have about his nomination.
The Senate Finance Committee scheduled Geithner's confirmation hearing Wednesday, a setback for Obama and Senate Democrats who wanted a quick hearing this week in time for Geithner to be confirmed on Inauguration Day.
Some senators began receiving calls this week from constituents angry about Geithner, who has acknowledged he didn't pay his self-employment taxes from 2001 to 2004. Newspaper editorials are stacking up. Television and talk radio shows are keeping the topic alive. And comics are making fun of Geithner's revelation.
"Hey, I don't pay my taxes. Why can't I be Treasury secretary?" asked Steve Colbert on Wednesday night's The Colbert Report.
It may be funny to some, but the question is serious, and part of the continuing back-and-forth messages exchanged on Twitter, a free messaging service that allows users to send brief comments about issues of the day from their phones or computers.
"I'm still trying to get my mind around Tim Geithner wanting to collect taxes, but he doesn't believe in paying taxes," wrote Ken Barnes of New York in a message Wednesday evening.
Barnes, 38 and self employed, said in an interview Thursday it wasn't the fact that Geithner didn't pay his taxes that troubles him most. It's the fact that he waited until November, days before Obama announced his nomination, to fix a problem the IRS pointed out in 2006.
"He shows a willful disregard for the tax system," Barnes said. "If he was looking to be secretary of interior or some other Cabinet member, I wouldn't be as sensitive to it."
Transition aides have said Geithner paid the 2001 and 2002 taxes in November, even though legally he was not obligated to so many years later, after Obama's team discovered they were not paid.
Obama has offered his full, continued support for Geithner, saying he is confident the Senate will confirm him despite his "innocent mistake."
The Senate committee considering Geithner's nomination released 30 pages of records detailing the tax problems and other issues discovered after he was nominated. The materials show that the IRS audited Geithner in 2006 for tax years 2003 and 2004, noting then that he failed to pay self-employment taxes while working for the International Monetary Fund.
Geithner also received IMF pay in 2001 and 2002, and he handled his quarterly tax payments those years in the same improper way flagged by the IRS. But it wasn't until his nomination by Obama that he paid those taxes, a fact that's puzzling in light of arguments that Geithner's actions were simply "honest mistakes."
"Even in the best of economic times, it would be hard to accept a Treasury secretary who, after all, is in charge of the Internal Revenue Service with a cavalier attitude toward paying his taxes," The New York Times wrote in an editorial. "Today, in a time of economic peril, the nation cannot afford a Treasury secretary with a tainted ability to command respect and instill confidence."
Late-night comics made Geithner their latest joke.
"You ever notice that whenever a politician doesn't pay their taxes, 'Oh, it's an honest mistake?" Jay Leno said Wednesday night during his opening monologue on The Tonight Show. "You know what they call it when you and I don't pay our taxes? Exhibit A for the prosecution."
Geithner and others have pointed out that tax confusion abounds for employees at IMF and other international organizations who are required to handle all of their own taxes as if they were self-employed. The IRS offered a broad settlement in 2006 to those taxpayers, offering to waive most of the penalties because of the unique problems they experienced.
Most IMF employees who run into trouble with their taxes have problems because they have never filed as a self-employed worker, said one IMF official who requested anonymity because he was not authorized to speak publicly.
But Geithner had experience filing as a self-employed worker, handling taxes for a consulting business and for his wife's work, according to a report by the Senate committee.
The real issue is whether the American public sees a problem in all of this, said Linda Chavez, who withdrew her name in January 2001 as President George W. Bush's labor secretary. Chavez came under fire after questions surfaced about room, board and money she gave a Guatemalan woman over two years, a woman she knew was an illegal immigrant.
Chavez said she's struck by how her controversy attracted a swarm of media attention, as compared to moderate interest so far in Geithner's case. But she said the problem is not in Geithner's situation; it's the overreaction in 2001 to her case by reporters and a hyper-partisan Democratic Party still angry about Bush's contested victory over Al Gore.
In Geithner's case, senators shouldn't rush to judgment, but they also shouldn't dismiss his actions as insignificant without asking tough questions, Chavez said. If they do gloss over the issue, they run the risk of leaving the public's questions unanswered about Geithner, Chavez said, who added:
"Is the public going to accept his explanation?"