Thursday, January 15, 2009

Alert: Fox To Guard Henhouse

And few of our elected representatives on Capitol Hill care.

From this article in the Washington Post:
The senators were in a state of low dudgeon.

They had just learned that Treasury Secretary-designate Timothy Geithner hadn't paid all his taxes, and, truth be told, nobody really cared.

"The man is qualified, competent, one of the best choices the president has made," one member of the tax-writing Finance Committee said yesterday.

"I think he's a good man," another one said with a shrug.

"I don't believe there's any doubt about his qualifications," said a third.

And those were the Republicans.

In the scandal-obsessed capital, the latest public peccadillo has been met by uncharacteristic indifference. Geithner, the man who would oversee the IRS, paid the government $42,702 because of mistakes he had made on his tax returns, and he disclosed to lawmakers that he briefly had a housekeeper without proper immigration papers. It's the sort of embarrassment that usually fires up the opposition -- but this time, as one senior GOP official put it, "CNN is talking about it more than we are."

Nobody called a news conference to rail about the nominee. Nobody mentioned it on the floor. Even Sen. David Vitter, a Louisiana Republican who rarely meets a Democratic appointment he likes, was shy. "I don't know enough about the details of that to comment on that," he begged off when asked about Geithner at an unrelated news conference.

There seems to be no chance that Geithner will suffer the nannygate fate of Zoe Baird, Kimba Wood or Linda Chavez; Finance Committee Chairman Max Baucus (D-Mont) said his confirmation is "a given."...
Another article in the Washington Post covers the story as follows:
Was he cheating on his taxes or just sloppy with his finances? Lawmakers vetting the nomination of Timothy F. Geithner to serve as Treasury secretary say they may never be sure. But leading Republicans nonetheless joined Democrats in leaping to his defense yesterday, calling Geithner's tax gaffes small potatoes compared with his qualifications for saving the global economy.

Sen. Orrin G. Hatch (Utah), the second-most senior Republican on the Senate Finance Committee, which is charged with reviewing Geithner's nomination, called him "brilliant" and "honest" and said that, despite his tax errors, "I don't think we can get a better person for this position. . . . He has the kind of background that should be very helpful to us at this time."

Sen. Robert F. Bennett (R-Utah), a close associate of Senate Minority Leader Mitch McConnell (R-Ky.), said: "If I was a traffic officer, I'd say he may have exceeded the speed limit, but he wasn't weaving out of lanes, he wasn't drunk and he wasn't endangering anybody. He may have some explaining to do, but in the end, I think he's going to be just fine."

The chorus of support from key Republicans suggests that Geithner, president of the New York Federal Reserve Bank, is unlikely to encounter serious turbulence on his path to the Treasury Department, where he would serve as President-elect Barack Obama's top adviser on the worldwide credit crisis and manage a $700 billion financial rescue program as well as the Internal Revenue Service....
At least Geithner paid in full when he learned that he was under consideration as The One's, Barack Hussein Obama's, Secretary of the United States Treasury:
...Geithner failed to pay a total of $34,023 in taxes from 2001 to 2004. He paid some of it in 2006 after he was audited by the Internal Revenue Service, which he would oversee as Treasury secretary. He paid the rest after Obama expressed his intent to nominate him....
Geithner got into this bind because
Geithner worked for the International Monetary Fund from 2001 to 2003. Under federal law, international organizations like the IMF are exempted from paying the employer share of Social Security taxes. Also, they don't withhold the worker's share from paychecks, like other employers do.

U.S. workers at such organizations are instead required to pay self-employment taxes. Geithner failed to pay self-employment taxes during his entire tenure at the IMF...

The IMF provides employees with several documents throughout the year to help them understand and meet their tax obligations. The documents included an employee tax manual, quarterly wage statements and year-end wage statements. Geithner acknowledged receiving all these documents....
How such a finances-savvy fellow didn't know that certain taxes weren't being withheld from his paychecks remains a mystery. I'm no CPA, but when, some years ago, I worked for an employer who didn't withhold Social Security taxes, I filed quarterly-estimated vouchers. And I didn't even need Publication 17 to figure out my tax obligation.

(Crossposted to THE ASTUTE BLOGGERS)

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posted by Always On Watch @ 1/15/2009 06:48:00 AM