We all now know that Timothy Geithner used TurboTax to complete his 2001 and 2002 tax returns. However, Geithner was not willing to put the blame on the TurboTax software program for his failure to pay his taxes.
Republican Senator from Iowa Chuck Grassley spent time questioning Geithner on how he prepared his taxes before going into the questions that proved more relevant to the confirmation.
Timothy Geithner, Secretary of the Treasury nominee, agreed that he would work to close the tax gap problem.
Senator Jeff Bingaman (D-NM ) headed into the TARP program head on. Bingaman asked Geithner how he would handle the financial crisis with Geithner replying that the problem had not been recognized early enough, nor was action taken quickly enough.
Geithner said more direct support is needed for small businesses and commercial credit flow, although he did not lay out any clear plan, stating that there is a need to review many proposed plans. About the bailout of the Big Three automakers, specifically the Chrysler/Fiat deal that is pending, the nominee commented that any assistance provided will by necessity have to leave the automakers able to stand alone without further government support.
Senator Hatch suggested that there is a need to approach entitlement reform. Geithner replied that the fiscal position of the United States required that Social Security and Medicare has to be put on a more streamlined financial position. As a follow-up Hatch suggested that corporate tax rates need to be significantly reduced. Geithner answered that the corporate tax rate is a key feature in developing jobs for America, indicating that there is a need to improve the overall corporate tax strategy.
Hatch suggested that most countries apply a territorial tax. Geithner responded that he would need to look at the problem in terms of global policies before making a determination.
Senator John Kerry (D-MA) reiterated that the financial system is broken, quoting Paul Volker. Kerry’s problem is that the House package as presently proposed will probably be wasted. Kerry believes that we do not have a crisis of confidence but rather a crisis of reality. Kerry says we are propping up insolvent institutions that need to clear their books of toxic assets, suggesting that we need a package that is large enough and sound enough to relieve the reality of the crisis. Kerry asked for a comprehensive plan. Geithner said that banks need to be more than strong enough to lend.
Senator Olympia Snowe (R-Maine) asked about Geithner’s role in the derivative crisis. She asked what actions Geithner specifically took and what he would have done differently. Geithner worked with financial institutions around the world since 2004. He added that he had worked for reform. About Lehman, Geithner said it did not cause the financial crisis, but made it worse. Neither the Department of Treasury nor the Fed had the authority to support Lehman or the failure, but according the Geithner there was no authority given by Congress at that time.
Senator Ron Wyder (D-OR) asked that Geithner, if confirmed, get tough and dig into the depths of the financial crisis, asking banks to come clean about their liabilities. Wyder went on to say that in 2007 someone should have seen Citigroup’s pending downturn. Geithner said there must be substantial reform. Wyder said that alarm bells were going off and he believes that something should have been done. Geithner said that his part of the supervision should have been better.
Wyder took the position of the American public, saying that small businesses were being unfairly treated during the bailout. Geithner said that small businesses need more credit, adding that the present administration has plans to aid small banks across the country.
The questions and answers continue, as of this writing. However, Geithner will be confirmed as Secretary of the Treasury.
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