Lack of fame aids Geithner over tax mistake

ATLANTA Thu Jan 15, 2009 7:30pm EST

US Treasury Secretary-designate, New York Federal Reserve Bank President Timothy Geithner, looks on as US President-elect Barack Obama announces the members of his economic policy team during a news conference in Chicago, November 24, 2008. REUTERS/John Gress

US Treasury Secretary-designate, New York Federal Reserve Bank President Timothy Geithner, looks on as US President-elect Barack Obama announces the members of his economic policy team during a news conference in Chicago, November 24, 2008.

Credit: Reuters/John Gress

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ATLANTA (Reuters) - Timothy who?

Wall Street knows all about him, but among ordinary Americans on Main Street, the hiccup to a smooth nomination for Timothy Geithner as the next U.S. Treasury secretary seems barely to have registered.

President-elect Barack Obama's pick appears to have avoided sustained criticism over his admission that he did not pay all of his taxes -- partly because he is so little known.

"I don't know anything about it (the controversy). Did it just come up in the last couple days?" asked Bill Reynolds, 48, a printer in Cincinnati, Ohio, when asked about the issue. His response was echoed by others in U.S. cities on Thursday.

Geithner's confirmation for the job by the U.S. Senate looked straightforward until Geithner -- who is president of the New York Federal Reserve -- told a Senate panel this week he had made mistakes over taxes while working for the International Monetary Fund in 2001-2003.

Geithner also said there had been a lapse in a housekeeper's work papers during her employment by his family.

Geithner is a familiar face on Wall Street but only 1 percent of people interviewed for a survey published on Thursday by the Pew Research Center could name Geithner as one of Obama's cabinet picks. Obama, a Democrat, takes office next Tuesday.

By contrast, 56 percent could name former first lady and former presidential candidate Hillary Clinton, Obama's choice for secretary of State.

"He is not a household name by any stretch. This is a fairly low visibility appointment, not that the economy is unimportant," said Michael Dimock, associate director at Pew.

Obama aides have called the errors honest mistakes. Geithner has amended his tax returns to repay about $42,700 in back taxes and interest and several Republicans say they do not expect the issue to derail his nomination.

Even so, taxes are a sensitive issue in the United States, where many people see taxes as an infringement on their financial rights. Some people who were aware of Geithner's tax problem were not happy about it.

"I don't understand why they would even entertain the idea of appointing someone like that to that position. I mean, if he's avoiding taxes or evading taxes, that's a basic American responsibility that we all have," said Francis Charfauros, a manager of a coffee shop in Scottsdale, Arizona.

Others echoed disapproval of Geithner, including Trinette McCrary, 39, who works in a dental office in Chicago.

"I don't think it's fair. He's supposed to be a leader on the economy and he didn't pay his taxes? That's just weird," McCrary said.

The little-loved Internal Revenue Service is an agency of the Treasury Department.

"TAINTED"?

Obama is taking office basking in wide public approval and with a Democratic majority in both the U.S. Senate and House of Representatives.

The New York Times said that despite the urgency of nominating a Treasury secretary at a time when the United States is facing its worst recession since World War Two, the tax issue should not be overlooked.

"In a time of economic peril, the nation cannot afford a Treasury secretary with a tainted ability to command respect and instill confidence," the paper said in an editorial.

Geithner's confirmation hearing is set for next Wednesday, which could work against Geithner if it gives time for the story to grow.

Conservative talk show hosts Rush Limbaugh and Neal Boortz said the flap over Geithner's taxes was not more prominent because some news outlets had played it down to boost Obama.

"The word in Washington is that this was an innocent mistake. Since when does the IRS (Internal Revenue Service) acknowledge the concept of an innocent mistake," Boortz said on his website.

(Additional reporting by Tim Gaynor in Phoenix, Andrew Stern in Chicago and Andrea Hopkins in Cincinnati; Editing by Frances Kerry)

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