Senate hearing for Obama's treasury choice postponed

PRESIDENT-ELECT Barack Obama’s hopes of a swift confirmation for his key cabinet figures received a setback with the postponement…

PRESIDENT-ELECT Barack Obama’s hopes of a swift confirmation for his key cabinet figures received a setback with the postponement until next week of the Senate hearing for Tim Geithner as treasury secretary.

The decision to put off the hearing until after next Tuesday’s inauguration followed the disclosure this week that Mr Geithner failed to pay $34,000 (€25,880) in taxes and employed a housekeeper without proper immigration papers.

Mr Geithner, who is currently chairman of the New York Federal Reserve, failed to pay appropriate Social Security and Medicare taxes when he worked for the International Monetary Fund (IMF) between 2001 and 2003. He repaid much of the sum owed when he received a bill from the Internal Revenue Service (IRS) in 2006 and the remainder last year.

A housekeeper Mr Geithner employed in 2004 and 2005 had proper immigration documentation when she started working for him but her permission to work in the US expired three months before she left his employment.

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Democrats on the Senate finance committee said the revelations should not disqualify Mr Geithner from becoming treasury secretary and Mr Obama’s team said the nominee should not be tarnished by “honest mistakes”.

The president-elect’s advisers point out that tax arrangements for American employees of the IMF are unusually complex and that it is not uncommon for US taxpayers to make mistakes in their tax returns. Massachusetts senator John Kerry acknowledged yesterday that the tax issue was an embarrassment in view of the treasury secretary’s responsibility for overseeing the IRS but he expressed confidence that it would not derail Mr Geithner’s confirmation.

“One wishes that it wasn’t there,” Mr Kerry said. “But I don’t think it’s going to stop his moving forward. We need a treasury secretary. We need somebody with the skills that he brings. The economy is the number one issue for the moment.”

Mr Kerry, who chairs the Senate foreign relations committee, predicted that the Senate would approve Hillary Clinton’s appointment as secretary of state later this week despite some misgivings over potential conflicts of interest surrounding former president Bill Clinton’s international philanthropic work.

The revelations about Mr Geithner represent the latest in a series of hiccups that have undermined the image of calm efficiency cultivated by Mr Obama’s transition team. Two weeks ago, New Mexico governor Bill Richardson withdrew his name as commerce secretary after it emerged that the FBI was investigating his involvement in an alleged “pay to play” deal.

Mr Obama annoyed Senate intelligence committee chairwoman Dianne Feinstein by failing to inform her of his choice of Leon Panetta as CIA director before leaking it to the media.

The president-elect was also outmanoeuvred by Illinois governor Rod Blagojevich over the appointment of veteran African-American politician Roland Burris to Mr Obama’s vacant Senate seat.

Mr Obama initially endorsed a hard line taken by Senate Democratic leaders, who said they would refuse to seat Mr Burris because of the corruption charges faced by the governor. The president-elect reversed course when Mr Burris refused to back down and black congressional leaders expressed outrage at the idea of an all-white Senate turning away a black senator who had been lawfully appointed.

In an internet message yesterday, Mr Obama said he wanted next week’s inauguration to be a day for all Americans rather than an event focused on him.  “This inauguration isn’t about me. It’s about all of us,” he said.