Senator Collins to Oppose Treasury Secretary Nominee's Confirmation

/PRNewswire-USNewswire/ -- U.S. Senator Susan Collins today announced that she will oppose the confirmation of Timothy Geithner, who was nominated to be U.S. Secretary of the Treasury. The Senate is expected to vote on the confirmation tonight circa 6:00 p.m.

Senator Collins placed this statement in the Senate Record:

Mr. President, I rise today to state my opposition to the confirmation of Timothy Geithner to be Treasury Secretary.

Our current economic crisis is, in part, a crisis of confidence. If we are to return to prosperity, the American people must have confidence in those who would chart our course. Mr. Gauthier's professional background and experience should inspire that confidence. They are overshadowed, however, by the personal issues regarding his own tax returns.

When these issues first arose, they were cited as examples of the baffling complexity of our tax code and of the need for reform. They were described by the nominee himself as "careless mistakes." As more details have emerged, it has become clear to me that this is not merely a matter of complexity leading to mistakes, but of inexcusable negligence.

Mr. Geithner failed to pay self-employment taxes while working for the International Monetary Fund. He failed to make these tax payments despite the fact that the IMF repeatedly reminded him of this obligation. He signed paperwork acknowledging this obligation. He received extra compensation that he acknowledged at the time was for the purpose of paying this obligation. Yet when he filed tax returns for the years he was employed at the IMF, he did not pay self-employment taxes.

After working for the IMF for three years, Mr. Geithner was audited by the Internal Revenue Service in 2006, which discovered that he had failed to pay his self employment taxes. Mr. Geithner was ordered to correct his tax returns for 2003 and 2004, and he paid the amount that he owed for those years.

But Mr. Geithner had made the same omission in 2001 and 2002, years that were outside the scope of the audit. Yet having been informed by the IRS of his omission for 2003 and 2004, Mr. Geithner took no action to correct the deficiency from 2001 and 2002 -- years for which the statute of limitations had already run. In fact, Mr. Geithner chose not to make the payments until he was being considered for this position at the end of 2008.

A similar failure to correct omissions when informed of them occurred when the accountant who prepared Mr. Geithner's tax returns in 2006 informed him that certain deductions Mr. Geithner had taken for three earlier years were not allowed. These deductions involved writing-off overnight camps as child care expenses. Mr. Geithner did not attempt to claim the deduction for 2006, but did not correct his returns for the previous years. And again, this deficiency was not addressed until late last year, when Mr. Geithner was being considered for this Cabinet position.

Mr. President, throughout the State of Maine and indeed throughout the nation, millions of hard-working Americans pay their taxes on time and in full. Our taxation system is essentially an honor system that depends on self-assessment and honesty. When taxpayers make mistakes, they are expected to correct them promptly and completely. How can we tell the taxpayers that they are expected to comply fully with our tax laws, when these laws have been treated so cavalierly by the person who would lead the Treasury Department and, ultimately, the Internal Revenue Service, when he was applying them to himself?

Therefore, Mr. President, I must oppose this nomination.

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Obama Must Withdraw Geithner Nomination

/PRNewswire-USNewswire/ -- Peter Flaherty, President of the National Legal and Policy Center (NLPC), today made the following statement:

President-elect Obama should withdraw Timothy Geithner's nomination for Treasury Secretary. Obama says that middle-class families with incomes of $250,000 are wealthy and their taxes should be raised, but he wants a Wall Streeter who didn't pay his taxes to be his point man on the economy.

The amount of unpaid taxes -- $42,000 -- may sound like pocket change to Geithner and his Wall Street buddies, but it is a lot of money on Main Street.

Geithner's claim that he didn't know he was supposed to pay taxes doesn't pass the laugh test. It is true that American citizens who work for the IMF are responsible for the employer's share of the payroll tax, but IMF employment includes generous pay and a host of other perks. Anyone who has ever worked there is well versed on the details because it is such great deal.

Henry Paulson and Timothy Geithner are the architects of our bailout policies, where ordinary taxpayers are forced to subsidize the wealthy, who are not allowed to go broke, no matter how spectacular their failures. Geithner was a poor choice, and his failure to pay his taxes proves it.

Charles Rangel, Chairman of the House Ways and Means Committee, did not report or disclose years of rental income on a Dominican Republic beach house and claims he did nothing wrong. His committee writes the tax laws. Now we have a Treasury nominee who for years failed to pay his payroll taxes and we are again told that he did nothing wrong. Will the same officials who plan to raise our taxes ever take responsibility for paying theirs?

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