Posted on 01/19/2009 7:43:05 AM PST by kellynla
What was he thinking? That is without doubt the question asked most often by nearly everyone looking into Treasury Secretary–designate Timothy Geithner’s failure to pay Social Security and Medicare taxes in 2001, 2002, and 2003. It’s certainly the question that will be asked at Geithner’s confirmation hearing on Wednesday. But it is also the question perhaps least likely to be answered to anyone’s satisfaction, because according to sources close to the confirmation process, Geithner doesn’t have an answer to that most basic question about his behavior.
“His explanation was kind of, ‘I don’t know—it was stupid, obviously it was a mistake, and I don’t know why I did it,’” recalls a senator who was present during Geithner’s surprise appearance before a members-only meeting of the Senate Finance Committee last week. “What do you say to that?”
The meeting was the first time that members other than chairman Max Baucus and ranking Republican Charles Grassley heard of Geithner’s tax problem. Baucus and Grassley had known about the issue since early December, but last Tuesday’s meeting was part of a carefully planned roll-out for the other members of the committee. First, committee investigators explained the problem to the senators. Then, Geithner himself came in and responded to their questions. And while that was happening, Obama transition officials began to distribute a set of talking points defending the nominee. “They put out their release before our meeting with Geithner even ended,” says the senator. “We did not know about any of it until we walked into the meeting.”
What senators learned at the gathering was not only that Geithner had failed to pay self-employment taxes during his time at the International Monetary Fund. They learned that the IMF had repeatedly informed Geithner, as it had all its employees, of his obligation to pay that tax. They learned that Geithner signed documents saying he would pay the tax. And they learned that Geithner accepted IMF reimbursement for Social Security and Medicare taxes that he had not, in fact, paid. Geithner paid part of his obligation after a 2006 Internal Revenue Service audit, and the rest of it after he was nominated to become treasury secretary. In all, he paid $42,702 in back taxes and interest. In addition to his payment of the unpaid self-employment taxes, Geithner also had to pay $5,566 to cover other shortfalls in his tax payments, for a total of $48,268 in back taxes and interest.
Since their meeting with Geithner was the first time that most senators had heard of the problem, their questions were not terribly detailed; several of the queries were along the lines of “What were you thinking?” And Geithner’s answers were not terribly satisfying. “He can’t offer a specific reason,” says another source familiar with what went on at the meeting. “He doesn’t really have an answer. He just didn’t know.”
So why did Geithner not pay the taxes in question? There is no obvious answer. It could have been pure oversight—a “common mistake,” as the Obama transition team has called it. But there are questions about how common the mistake actually was; an IMF official, while not commenting on Geithner’s case in particular, has said that instances of non-payment of taxes by IMF staffers are relatively rare. If Geithner’s problem was not common, then some senators will want to know whether there was anything about Geithner’s particular circumstances in 2001, 2002, and 2003 that might have contributed to his actions. Was he distracted? Was he short of money? Was there anything else going on that might have affected his decision-making concerning his taxes?
In the end, senators will be looking for any reason to explain why a man of Geithner’s financial sophistication—he came to the IMF after a stint as a high-ranking official in the Treasury Department and left the IMF to become head of the Federal Reserve Bank of New York—could have made such mistakes on his taxes. If he were confirmed as treasury secretary, Geithner would, among other things, oversee the IRS, something that makes his tax problem all the more relevant to his confirmation. “This is the guy who heads up the IRS,” says the senator who is baffled by Geithner’s situation. “All the taxpayers look to him, and when he says, ‘Gee, I don’t know why’—does that become a defense?”
He cheated on his taxes ‘because he could’
Now where did we hear that excuse before???????
Oh, this liberal crook know exactly WHY — he is a liar, cheat and a crook. Guess that normally just comes under the title of “LIBERAL DEMOCRAT”.
What’s so difficult to explain?
He just wanted the money.
Duh!
If you're a democrat, sure.
Hillary was vetted and things were ignored.
Repeat as necessary....
“Trying this defense” calls to mind one BJ Clinton who as POTUS said that it depends on what the meaning of “is” is, and got away with it.
This is beyond sad. I'm flabbergasted, gobsmacked, floored.. yet I'm not surprised.
Didn't Willie Nelson, and countless others, make similar mistakes?
As Bob Dole would say “Where is the outrage?” Seriously, I am really upset about this and my party is standing around shuffling their feet.
All we hear is “well, he is so smart, blah, blah, blah...”
Yea, this guy is so smart he figured out how to get out of paying his taxes.
People are so stupid.
“Geithner Can’t Explain His Failure to Pay Taxes “
I can. Leona Helms complex.
Just like Kalifornia's plan to send IOUs instead of refund checks. Can you imagine a citizen sending an IOU and claiming "tough times"?
Signs of things to come and the signs suck.
Heck, this should be the new economic stimulus package - call it the Geithner Plan. The US goverment will mail us all checks that are equal to our estimated federal tax liability for 2009. And we can spend them AND not pay our federal taxes as well. Think what wonders that would do for the dirtboy household economy.
If it's good enough for the head of the New York Fed and our incoming Treasury Secretary, it should be good enough for us. If it's not good enough for us, then why should Geithner become the Treasury Secretary?
One rule for them, and another rule for us. That is the key problem with DC and why they are oblivious to what the rest of the country is going through. And nothing will change as long as jerks like Geithner are just spun back into positions of power.
“So why did Geithner not pay the taxes in question? There is no obvious answer. It could have been pure oversight—a “common mistake,” as the Obama transition team has called it.”
I’m gonna use this the next time the IRS comes knocking on my door and see how it works.
Come on Byron. He thought he could get AWAY with it!!!!!! If he hadn’t been nominated he NEVER would have paid.
That's true. A list should be made of all the Rats who have done things that would get a Republican immediately impeached (or never elected in the first place): William Clinton, William Jefferson, Rod Blagojevich, Ted Kennedy, Robert Byrd, Harry Reid, Charles Rangel, Rahm Emanuel, Barney Frank, Ray Nagin, Hillary Clinton, John Kerry, Eliot Spitzer, Tim Mahoney, Bill Richardson ... and I know this only scratches the surface!
“He was vetted and it was ignored.
Hillary was vetted and things were ignored.
Repeat as necessary....”
That’s what I’m thinking. Conservative writers have been stating all week that Hillary should have been grilled re: so many issues regarding her husband’s contacts, yet she got a pass. Sounds like this guy is on the same path.
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