There are a lot of questions about the tax problems of Treasury Secretary-designate Timothy Geithner.
Did Geithner, a former high-ranking official in the Clinton Treasury Department, really not know he wasn’t paying Social Security and Medicare taxes after he moved to a new job at the International Monetary Fund in 2001?
What was he thinking when he signed papers pledging that he would pay those specific taxes? And what was he thinking when he accepted the IMF’s customary reimbursement for taxes he had not paid?
Those questions are why we have confirmation hearings. Geithner’s problems are serious, and they deserve a complete airing. But there is a bigger issue in the Geithner situation, and it is this: Should an offense that would have sunk a nomination in years past be considered acceptable today?
There’s no doubt that Geithner’s tax problems, even what we know about them before a full public hearing, would have killed a cabinet nomination in 1993, or 1997, or 2001, or 2005.
Bill Clinton’s choice of Zoe Baird to be Attorney General brought us the phrase “nanny problem” after we learned she had hired illegal immigrants to do household work and paid Social Security taxes on them only after she was nominated to head the Justice Department.
Baird’s nomination went down — in a Democratic Senate, no less. Does anyone believe that Geithner’s problems are somehow less serious?
Geithner’s tax issues are certainly far more troubling than those of Kimba Wood, who might have replaced Baird had she not had a (much less serious) nanny problem of her own.
Or Linda Chavez, who was George W. Bush’s choice to head the Labor Department until reports that she had allowed an illegal immigrant from Guatemala to live in her home and do some householdchores. (Chavez also helped the woman get to English classes and job
interviews.) After the news came out, Chavez was doomed.
It’s fair to say that under any application of the rules that governed the Baird, Wood, and Chavez cases, Geithner would be toast. But do those old rules still apply?
“These are huge times,” says Sen. Lindsey Graham, a Republican who supports Geithner. “Now is not the time to think in small political terms. I don’t see any desire by the Republican party to play gotcha on this.”
Graham represents an opinion held by a large number of Democrats and a significant group of Republicans. Sure, Geithner might have a problem, the thinking goes, but the current economic crisis has made the job of Treasury Secretary too important to be subject to “small” objections.
But Graham spoke before some of the details of Geithner’s situation became public. Did Graham know that Geithner had been informed repeatedly, like all IMF employees, of his tax obligations? That he signed a document saying he would pay the tax? That he accepted reimbursement for taxes he did not pay?
Maybe none of that will change Graham’s mind, but it’s safe to say that until now most senators, other than Finance Committee chairman Max Baucus and ranking Republican Charles Grassley, haven’t paid much attention to Geithner’s story.
First, they only learned about it on Tuesday afternoon. And three key Republicans on the Finance panel — Grassley, Orrin Hatch, and Jon Kyl — also sit on the Senate Judiciary Committee, which on Thursday and Friday was holding a very high-profile and
occasionally contentious confirmation hearing for Attorney General-designate
Eric Holder.
Given all that, they just haven’t been able to pay much attention to Geithner. When they do — hopefully before the confirmation hearing actually begins — they might find the story a little different from what they have read in the newspapers.
But let’s say they decide to give Geithner a bye. Even though senators fully realize what he did, they punch his ticket to the Treasury Department because the economic issues of the moment are just too important for any sort of delay.
Will that be a one-time thing, or have the rules changed for good?
Senators should think carefully before they decide. Yes, there have been cases of injustice in the past. But it’s a good idea to know the people who will play critical roles in our government. It’s not too much to ask them about themselves, particularly on issues that reflect on how they might do their jobs.
If you had a nominee for Secretary of Agriculture, would it make any difference if he had accepted farm subsidies when he wasn’t qualified to do so? Let’s say he explained that it was just a mistake, that he just slipped up.
But still, given that he would be supervising the farm subsidy program, you’d have to wonder, no?
And wouldn’t you have the same questions about a man with a history of tax problems in charge of the Internal Revenue Service?
Reasonable people disagree about this. “Our crisis is too strong, too big, and his is too much of an asset to deny him office over unpaid taxes, which in the end he refunded and repented,” the columnist Charles Krauthammer said on Fox News Thursday. “To sink his nomination over what I think is a triviality is simply unserious.”
But what is the definition of a triviality? If $42,000 in unpaid taxes and interest is trivial, is $100,000? $250,000? If unpaid Social Security and Medicare taxes are trivial, are unpaid income taxes trivial, too?
These are difficult questions, with long-ranging consequences, for the Senate to consider. Lawmakers need to think a lot — and, most importantly, to familiarize themselves with the facts of the case — before they pass judgment on Timothy Geithner.
Sunday Reflection contributor Byron York covers the White House for National Review.
