Treasury nominee Geithner cleared for full Senate vote

WASHINGTON -- Treasury secretary nominee Timothy Geithner cleared a key hurdle Thursday when a Senate panel voted 18-5 for his confirmation despite concerns about his tax troubles.

Geithner is expected to be confirmed by the full Senate when it votes Monday, said Jim Manley, a spokesman for Senate Majority Leader Harry Reid, D-Nev. Finance Committee Chairman Max Baucus, D-Mont., said he hoped Congress will act quickly.

The five who voted against Geithner's nomination were all Republicans, including the highest-ranking Republican on the committee, Sen. Charles Grassley of Iowa.

Grassley and others said they could not support Geithner after it was revealed last week that he underpaid self-employment taxes obligation while working at the International Monetary Fund from 2001 to 2004. Grassley and others said Geithner, who as Treasury secretary would be in charge of the IRS, in his testimony Wednesday did not fully answer their questions on the issue.

"In previous years, nominees who have made less serious errors in their taxes were forced to withdraw," Republican Sen. Mike Enzi, an accountant from Wyoming, said before casting a "nay" vote. "This is the man who's going to be in charge of tax reporting and collection."

But a number of Democrats and Republicans said they took Geithner at his word that he had made honest mistakes and said that he was best qualified for the job. Geithner has paid $34,023 in back taxes and $8,679 interest.

"He's a person of great integrity," Sen. Orrin Hatch, R-Utah, said. "There are very few people in this country who have the qualifications he does."

Geithner is president of the Federal Reserve Bank of New York and previously worked for years at the Treasury Department. At the New York Fed he has been a key player in supporting the troubled financial industry.

But Geithner's tax issues dogged him Thursday. Sen. Jim Bunning, R-Ky., released an e-mail to Geithner from his accountant in March 2004 flagging issues with his returns. Geithner paid back taxes and interest for 2003 and 2004 after an IRS audit found an error in 2006. Geithner did not pay for 2001 and 2002 until the Obama team discovered during the vetting process last year that he had made similar errors in those years. Geithner's returns for 2001 and 2002 would not have been part of the audit because of the statute of limitations.