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Statement of Senator Michael B. Enzi

“On the Nomination of Timothy Geithner to be Secretary of the United States Department of the Treasury”

January 26, 2009

 

Mr. President, I rise today to comment on Mr. Geithner’s nomination to be the Secretary of the United States Department of the Treasury.  Although I became a member of the Senate Finance Committee only recently, I have spent considerable time reviewing the nomination documents and testimony of Mr. Geithner.   I also brought to bear my expertise as an accountant and long-time member of the Senate Banking Committee to make a determination on Mr. Geithner’s qualifications.  After thoughtful deliberation, I voted against his nomination in the Senate Finance Committee.  I continue to oppose his nomination today, and urge my colleagues to do the same.  

The position of Secretary of the Treasury is one of the most important nominations this chamber considers.  The Treasury executes the domestic and international economic policy of the United States; our trade policy, the purchase and sale of public debt, regulation of national banks, and our tax policy.  All revenues of the federal government pass through the doors of the Treasury.  

This position is even more meaningful when we consider the economic condition of the United States today.  We are in the middle of a global financial crisis.  The U.S. economy is slowing and Americans are losing their jobs, homes, and retirement savings at an alarming rate.  The Secretary of the Treasury will be immediately tasked with turning our economy around.  This challenge can only be met by the most capable and qualified candidate.  Unfortunately, I do not believe that candidate is Mr. Geithner.  

As Chairman of the New York Federal Reserve, Mr. Geithner helped to orchestrate major bailouts for Bear Stearns, AIG, Citigroup, and others.  These bailouts have cost American taxpayers billions of dollars.  The AIG bailout alone cost $85 billion in September, 2008.  Many of the actions taken by the New York Federal Reserve, under Geithner’s leadership, were beyond the purview of the Emergency Economic Stabilization Act and taken without the explicit consent of Congress.  

The money used in these bailouts was spent without transparency or accountability.  They were also spent on corporate retreats and executive compensation instead of loans to thaw our frozen credit markets.  Mr. Geithner’s career at the New York Fed should be described more as a financier of Wall Street than as a steward of American monetary policy.  I am apprehensive about supporting the nomination of someone who puts shareholder interests above the needs of hardworking taxpayers.   

Mr. Geithner has also failed to provide specifics about his plans to use the remaining $350 billion in TARP funding. His testimony before the Senate Finance Committee last week displayed the same urgency and strong language as former Secretary Paulson’s testimony before the Senate Banking Committee in September.  Soon after however, we saw that money spent in ways unaccountable to and unintended by the United States Senate and the American taxpayer.  Measurable goals and clear direction are absolutely required if American taxpayers are to fully understand how and why their money is being spent to assist failing banks and companies.  So far, Mr. Geithner has provided neither.  I have not and will not support massive government intervention to rescue private industry.  

Finally, I believe Mr. Geithner’s failure to pay $34,000 in Social Security and Medicare taxes is inexcusable.  The Treasury Secretary is in charge of the Internal Revenue Service and the enforcement of our nation’s tax code.  As one of my colleagues already noted, “How do I explain to my constituents that I voted to confirm someone who will make them pay taxes, but sometimes does not pay his own taxes?”  This negligent behavior deserves more than a simple slap on the wrist or half-hearted apology before a Senate committee.   

In previous years, nominees for positions that do not oversee tax reporting and collection have been forced to withdraw their nomination for more minor offenses.  Many were ridden out of town on a verbal rail.  The fact that we are in a global economic crisis is not a reason to overlook these errors.  It should be a reason to more closely scrutinize Mr. Geithner’s record and his judgment.   

The Treasury Secretary makes policy decisions every day that impact the global financial markets and put America on a new economic path.  These decisions are often made without the explicit consent, or even knowledge, of those outside the Administration.  While the Senate cannot scrutinize and debate every decision the Secretary makes, it is our duty to ensure the President’s nominee has the character and judgment necessary to perform these duties successfully.  Mr. Geithner’s past negligence casts doubt on his qualifications in this regard.  Some say the President should get who he wants, so why then is the advice and consent and requirement in the Constitution?  Is there only one person who can save us?  

Some of my colleagues in the Senate have argued that, despite these concerns, President Obama should have his choice of economic counsel confirmed because he is the President.  I respectfully disagree.  With the broad authority granted to the Treasury Secretary and the enormous challenge facing the new Secretary to right our country’s economic ship, President Obama’s choice impacts every American in a very personal way.  The Senate would not be doing its duty if we simply confirmed this nominee without addressing these issues.   

Many of my constituents are asking, “Are you seriously considering putting someone who failed to pay their taxes in charge of the department which controls the IRS?  You couldn’t find anyone better?”  Yet that is exactly what we are doing.  Many of your constituents are asking the same thing, but my voice seems to be one of the few of dissent.  But that’s not why we have a Senate.  The Senate is not supposed to be a group of “yes men” rubber stamping everything the Executive Branch sends us.  We are supposed to stand out, stand up and reason during the rush.  We are supposed to think and then act based on understanding and knowledge.  We are not doing so today.  

Mr. President, I intend to vote against the nomination of Mr. Timothy Geithner as Secretary to the United States Department of the Treasury.  The Senate needs more time to fully address the problems I have identified and debate Mr. Geithner’s qualifications.  I respectfully urge my colleagues to vote no.  Thank you.