Senate panel backs Geithner
The Senate Finance Committee voted 18-5 to approve his confirmation as Treasury secretary despite tax snafu; vote now moves to full Senate.
NEW YORK (CNNMoney.com) -- A Senate panel recommended that the full Senate confirm Tim Geithner as the next Treasury secretary.
The Senate Finance Committee voted 18-5 to recommend President Obama's nomination of Geithner, a former Treasury official who is currently president of the Federal Reserve Bank of New York.
The nomination will now move to the Senate, where Democratic leadership has been emphasizing the need to quickly confirm Geithner's nomination. A vote on the Senate floor hasn't yet been scheduled.
"This is a historically critical time for Americans to have sound and experienced leadership at the Treasury Department, and Tim Geithner is exactly the man for the job," Senate Majority Leader Harry Reid of Nevada said in a statement Wednesday evening.
The Senate Finance Committee's vote comes a day after a four-hour-long hearing that focused largely on the financial and regulatory issues confronting the nation -- including how the new administration will deploy the funds remaining under the Troubled Asset Relief Plan passed in October.
The Senate last week gave the administration access to the remaining $350 billion in TARP funds. Many legislators have criticized how the first half of the funds were spent by the Bush administration, specifically that there were no safeguards to protect the interests of taxpayers.
"The American people deserve accountability and transparency," said Sen. Olympia Snowe, R-Maine Thursday morning before the panel's vote. Speaking of banks that have received TARP funding, she said, "We have a right to know whether they're making those loans or not."
Geithner said in his testimony Wednesday that the administration is working on a comprehensive set of policies intended to stabilize the financial system. He said Obama would address the nation on that subject in coming weeks.
Geithner's confirmation hearing had been set for last week but was delayed by the disclosure of Geithner's failure earlier this decade to pay self-employment taxes on some income when he was working for the International Monetary Fund.
Two Republican senators, Jon Kyl of Arizona and Jim Bunning of Kentucky, focused many of their questions to Geithner Wednesday on the tax issue. Kyl called Geithner's explanation of his mistakes as "implausible."
But most legislators indicated the tax problems didn't undermine their confidence in Geithner, who if confirmed will take office at a time when unemployment has risen 12 straight months and analysts are questioning whether the government will need to take over giant financial firms such as Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500).
Before Thursday's vote, Senate Finance Committee Chairman Max Baucus, D-Mont., noted the "grave issues" facing the economy and lauded Geithner's experience, which includes his leadership at the New York Fed and several years in the late 1990s as the chief of the Treasury's international affairs division.
"What he's going to be handling is very serious stuff," added Sen. Orrin Hatch, R-Utah. Hatch said he believes Geithner is a man of "great integrity" and that he believes his experience and nonideological bent will be assets to the government. "It's very important to have someone who puts aside politics at a time like this," Hatch said.
All thirteen of the Democratic senators on the committee voted in favor of Geithner as did five Republicans, including Hatch and Snowe.
The five Republican senators who opposed the motion to forward Geithner's nomination to the full Senate were the committee's ranking member, Chuck Grassley of Iowa; Kyl; Bunning; Pat Roberts of Kansas; and Mike Enzi of Wyoming.