[Congressional Record Volume 155, Number 15 (Monday, January 26, 2009)]
[Senate]
[Pages S800-S801]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          GEITHNER NOMINATION

  Mr. BUNNING. Mr. President, I rise to speak in opposition to the 
nomination of Timothy Geithner to be Secretary of the Treasury. Of the 
many positions in the Federal Government about to be filled, the 
Treasury Secretary is among the most critical today. We are confronted 
by several financial panics and disasters, and one false move by the 
Secretary of the Treasury could result in years of stagnation and high 
unemployment.
  Even before the disclosure of Mr. Geithner's tax problems, I had 
serious reservations about his nomination. Mr. Geithner has been 
involved in about every flawed bailout action of the previous 
administration. He was the front-line regulator in New York when all 
the so-called financial innovations that have recently brought our 
markets to their knees became widespread. He went along with all the 
flawed monetary policy decisions of Alan Greenspan and Ben Bernanke, 
and he stretched the law beyond recognition to bail out Bear Stearns 
and later AIG. All those actions, or failures to act, raise questions 
about the nominee's judgment, but his failure to pay his own Social 
Security and Medicare taxes, despite clear evidence he knew he owed the 
taxes, reflects negligence or worse toward the law he will be 
responsible for enforcing.
  The financial crisis we are in the middle of today did not happen 
overnight and it could have been prevented. Easy monetary policy under 
former Federal Reserve Chairman Alan Greenspan provided the fuel for a 
speculative asset bubble that burst. Finally, it popped. Mr. Geithner 
helped Chairman Greenspan keep pouring that fuel on the fire from the 
day he got to the New York Fed.
  More careful regulation by Mr. Greenspan, his successor Ben Bernanke, 
and other regulators could have better contained the damage from the 
bubble. Mr. Geithner sat at their side from 2003 until now. Yet he 
raised not one objection to their flawed regulations.
  Even worse than supporting the flawed Greenspan and Bernanke 
policies, Mr. Geithner failed himself as a regulator. One of Mr. 
Geithner's most important jobs was to prevent the collapse of the 
largest and most important banks. One look at Citigroup today shows how 
he failed in that job. Although he talked about the great threat or the 
systemic risk, Mr. Geithner sat idly by as risk became more and more 
concentrated in the hands of a few large financial institutions and the 
pricing of risk became detached from reality. Trillions of dollars in 
savings held by Americans are being destroyed as a result.
  When the crisis worsened last fall, Mr. Geithner helped craft the 
$700 billion bailout presented to Congress. The Geithner-Paulson-
Bernanke plan, as sold to Congress, was to buy toxic assets to bail out 
their Wall Street buddies--no strings attached. But soon, Treasury 
changed course, choosing to take equity in banks--an option explicitly 
rejected before Congress. Sadly, Mr. Geithner went along with all these 
decisions.
  Finally, we have learned that Mr. Geithner is comfortable with giving 
tax dollars away, but not so much with paying them himself. Documents 
show he repeatedly acknowledged his tax obligation and then ignored 
clear instructions to pay. I find Mr. Geithner's explanation that this 
was a careless mistake unconvincing and unsupported by the facts.
  His failure to pay what he owed cost Social Security and Medicare 
more than $34,000, part of which would never have been repaid if Mr. 
Geithner was not nominated to be Secretary of the Treasury, a position 
which oversees tax enforcement. And he was able to convince the IRS to 
refund the penalties they initially charged. I hope Mr. Geithner will 
remember this experience when considering the tax issues of ordinary 
Americans.
  This is all the more unfortunate because America needs a strong and 
credible Secretary of the Treasury now more than ever. The most recent 
Secretary treated Congress with borderline contempt and hostility. He 
was not forthcoming with information or explanations, only marching 
orders. I do believe Mr. Geithner understands the important role 
Congress has to play in our economic policies, and until his evasive 
and unsatisfactory answers about his tax problems, I thought he would 
at least do a better job than Secretary Paulson at working with 
Congress. When Mr. Geithner is indeed confirmed--and I know he will be 
by this body--I hope he will follow through on his promises to be a 
responsive and respectful Secretary of Treasury to Congress.
  Mr. President, for all these reasons I have discussed, I cannot, in 
good conscience, support this nomination.
  I yield the floor, and I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.

[[Page S801]]

  Mr. ENZI. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered. The Senator from Wyoming is recognized.
  Mr. ENZI. Mr. President, I rise today to comment on Mr. Geithner's 
nomination to be the Secretary of the U.S. Department of the Treasury. 
Although I became a member of the Senate Finance Committee only 
Thursday, 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 of course 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 U.S. 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. They have been ridden out of town on a verbal 
rail. They have been forced to withdraw. 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 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. We are 
charged with the advice and consent of nominees under the Constitution. 
Are we saying there is only one person in the whole world qualified to 
handle the situation as it is today? 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 is 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 U.S. 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.
  I yield the floor and suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. KYL. I ask unanimous consent that the order for the quorum call 
be rescinded.
  The PRESIDING OFFICER (Mrs. Hagan). Without objection, it is so 
ordered.

                          ____________________