January 22, 2009 / 1:52 AM / 9 years ago

Panel clears Geithner for full Senate vote

<p>New York Federal Reserve Bank President Timothy Geithner, President Barack Obama's nominee for Treasury Secretary, during his confirmation hearing before the Senate Finance Committee on Capitol Hill, January 21, 2009. REUTERS/Brian Snyder</p>

WASHINGTON (Reuters) - President Barack Obama’s pick to head the Treasury, Timothy Geithner, won Senate Finance Committee backing on Thursday, putting him a key step closer to starting a job directing the new administration’s efforts to stabilize the economy.

With an 18-5 vote, the panel largely overlooked Geithner’s underpayment of $34,000 in taxes, clearing the way for a full Senate confirmation vote that Senate Majority Leader Harry Reid said he hoped to hold at around 6 p.m. EST on Monday.

Finance Committee Chairman Max Baucus, a Montana Democrat who has been shepherding Geithner’s nomination through controversy, had earlier pushed for floor vote on Thursday, but Republicans objected, asking for more time.

“The president needs his team. I‘m trying to help him get his team in place,” Baucus told reporters.

Obama’s top economic cabinet member needs full confirmation to start work tackling a financial crisis that is threatening to worsen a year-long recession as job losses mount.

Geithner told the committee on Wednesday that the Obama administration in coming weeks will unveil a multi-pronged

effort to stabilize the housing market, strengthen core banks and support consumer credit to help foster economic recovery.

Worries over potential delays in Obama’s economic stimulus efforts have helped pushed stocks lower in recent days as mounting corporate job cuts and weak housing data feed worries about a worsening economy.

Comments from White House spokesman Robert Gibbs that the new president was working to ensure that stimulus and financial stability plans are “implemented quickly” helped limit some damage, but major stock indexes still lost more than 1 percent on Thursday.

Gibbs added that Obama was pleased with the committee’s “strong, bipartisan” vote.

Geithner, who currently heads the New York Federal Reserve Bank, was considered by many to be an ideal candidate for the job because he has already been deeply involved in government efforts to prop up financial institutions and markets amid the worst financial crisis since the 1930s.

TAX PROBLEMS COST VOTES

Geithner’s nomination appeared without controversy until revelations last week that he underpaid self-employment tax for several years when he worked for the International Monetary Fund earlier in this decade.

<p>New York Federal Reserve Bank President Timothy Geithner, President Barack Obama's nominee for Treasury Secretary, during his opening statement for his confirmation hearing on Capitol Hill, January 21, 2009. REUTERS/Jonathan Ernst</p>

Although Geithner corrected what he called “careless” and “unintentional” mistakes, the tax errors cost him some votes on the committee.

“I don’t believe that the requisite candor exists for me to indicate my support for him with an affirmative vote,” Republican Sen. Jon Kyl of Arizona said before voting “no.”

Democrats and some Republicans on the panel said Geithner was well qualified and needed on the job as soon as possible.

Sen. Kent Conrad, a North Dakota Democrat, said he wouldn’t vote for Geithner in “normal times.”

“But these are not normal times. And I personally don’t think we can afford a further delay in the filling of this critically important position,” Conrad said. “I think we are not anywhere near out of the woods, that very serious days lie ahead of us, and that it is absolutely imperative that we get a secretary in place.”

STRONG DOLLAR MANTRA AFFIRMED

Geithner answered dozens more written questions from senators in a 102-page document released on Thursday, reaffirming the Treasury’s long-standing currency mantra.

“A strong dollar is in America’s national interest,” he wrote in the document.

Geithner also issued a stern warning to China, which has a huge trade surplus with the United States, saying that Obama believes Beijing was manipulating its yuan currency.

“President Obama -- backed by the conclusions of a broad range of economists -- believes that China is manipulating its currency,” Geithner wrote. “President Obama has pledged as president to use aggressively all the diplomatic avenues open to him to seek change in China’s currency practices.”

However, Geithner said due to the global economic crisis, the immediate focus of U.S.-China relations “needs to be on the broader issue of stabilizing domestic demand in China and the U.S.”

Geithner also said the Treasury had no current plans to request more bailout money beyond the existing $700 billion already authorized, but said the situation was “dynamic.”

“We have to be prepared to act flexibly and with speed if conditions worsen appreciably, to devote more resources if that is necessary to secure our objectives, and we have to make it clear that we will continue to act until we have restored the strength and vitality of the U.S. financial system,” he wrote.

Additional reporting by Jeremy Pelofsky, Rick Cowan, Tim Ahmann, Mark Felsenthal, Doug Palmer and Emily Kaiser; Editing by Dan Grebler and Jan Paschal

Our Standards:The Thomson Reuters Trust Principles.
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