Executive Session

Floor Speech

BREAK IN TRANSCRIPT

Mr. FEINGOLD. Madam President, I will vote against the nomination of Timothy Geithner to be the next Secretary of the Treasury. I do so with some reluctance. President Obama, like any other President, is entitled to have the Cabinet he wants, barring a serious disqualifying issue. And Mr. Geithner is a very able nominee in many ways. Mr. Geithner is clearly a smart, capable individual, with the qualifications to be Treasury Secretary, and he has a host of distinguished individuals attesting to those facts.

While I am troubled by Mr. Geithner's track record on the issues that have contributed to the credit market crisis, I do not base my vote on what is, to a certain extent, a matter of policy disagreement. During the last year of the Clinton administration, Mr. Geithner reportedly participated in the Treasury Department's support for the elimination of the Glass-Steagall Act protections which had served to keep our banking system stable since the Great Depression, as well as the Department's opposition to the regulation of derivatives, the explosive financial instruments that helped trigger the financial market contagion. It those reports are accurate, Mr. Geithner's actions were not singular by any means. Indeed, while I opposed both moves, they each had broad bipartisan support in the House and Senate.

His more recent work as President of the New York Federal Reserve Bank also raises serious questions. At a minimum, he was one of the primary regulators of some of the largest financial institutions in the country at a time when their activities greatly contributed to the eventual meltdown of the credit markets.

As I have noted in the past, I give any President great deference with respect to his executive branch nominees, and the greatest deference regarding Cabinet appointments, even when I may have significant policy differences with the nominee. The matters surrounding the credit crisis largely fall into this category.

Mr. Geithner's tax liability is a different matter, however. I am deeply troubled by his failure to pay the payroll taxes he owed, despite repeated alerts from his employer at the time, the International Monetary Fund, that he was responsible for paying those taxes. It is especially troubling because Mr. Geithner signed documents at the IMF promising to pay taxes, including the payroll taxes, in exchange for a special ``gross-up'' of his income intended to offset the cost of those taxes. Moreover, his earlier interactions with the Internal Revenue Service over his failure to pay sufficient payroll taxes for his household employees make Mr. Geithner's explanations of his failure to pay his own payroll taxes even less satisfactory.

The failure to comply with our Nation's tax laws would be problematic for any Cabinet nominee, but it is especially disturbing when it involves the individual who will be charged with overseeing the enforcement of our tax laws. Mr. President, surely that individual must meet a higher standard than a failure to establish they deliberately evaded their tax liability.

With the condition the economy is in today, and the state of our country's financial institutions, the stakes could not be greater for the next Treasury Secretary. And despite his failure to comply with the tax laws, the seriousness of our economic challenges may be the reason Mr. Geithner is confirmed. Indeed, that seems to be likely.

If he is confirmed, Mr. Geithner will be asked to oversee not only a faltering economy but also the rehabilitation of our financial markets. No Treasury Secretary has faced bigger challenges. I hope that if he becomes our next Secretary of the Treasury Mr. Geithner will be a bit humbled by his missteps, policy, and otherwise, and will revisit the positions he took when he was in the Clinton Treasury Department in light of the subsequent damage they did to our financial markets, as well as his actions or lack of action as President of the Federal Reserve.

Given the enormous challenges he will face and the great talent he appears to have Timothy Geithner has the ability to be a truly great public servant. I hope he will live up to that potential.

BREAK IN TRANSCRIPT

Source