Greetings from the Geithner hearings. The Treasury Secretary-designate’s tax problem was one of the first things mentioned today by Finance Committee Chairman Sen. Max Baucus in opening statements. “These are disappointing mistakes,” Baucus said of Geithner’s failure to pay Social Security and Medicare taxes in 2001, 2002, 2003, and 2004. “But after discussing them with Mr. Geithner, I believe them to be innocent mistakes. I believe that Mr. Geithner has sufficiently corrected the errors. And I know a man of Mr. Geithner’s talent and dedication will be meticulous on these points in the future.”
Ranking member Sen. Charles Grassley was much more blunt. Calling Geithner’s problems a “troubled tax history,” Grassley said Geithner has “offered many excuses” in response to questions about his non-payment of taxes. Particularly “troubling,” Grassley said, is the fact that Geithner, when his errors were discovered, paid only the taxes he owed for 2003 and 2004, not paying for 2001 and 2002 until after he was chosen as the Treasury Secretary nominee. Grassley also talked about the “tax gap” — that is, the difference between what Americans owe in taxes and what they actually pay. “The nominee has been found to be a tax gap participant,” Grassley said.
Geithner’s prepared opening statement didn’t mention the tax problem. But at the end of his remarks, he addressed the problem in a general way. “These were careless mistakes,” he said. “They were avoidable mistakes. But they were unintentional. I should have been more careful.” Geithner also apologized to the committee “for putting you into the position of having to spend so much time on these issues.”