Washington Matters


Geithner To Get Frosty Welcome Back



The bloom of inaugural celebrations will wear out quickly for Treasury Secretary-nominee Timothy Geithner when he faces the Senate Finance Committee on Wednesday. With Congress still furious over how the first half of the $700 billion bailout plan was spent, the confirmation hearing will no doubt be testy. Complicating matters even more is a mess over his failure to pay some taxes, a mistake he only recently corrected. Geithner will have a lot of explaining to do and he better have some answers.

Geithner's personal financial dilemmas will be an embarassing speed bump towards confirmation. Obama and his aides went on a public relations offense over the weekend citing their support for the Treasury secretary nominee. Alhough the Treasury department overseas the Internal Revenue Service, Senators will cut Geithner slack because of the economic crisis. It just underscores how much is at stake in the job that will dole out the remaining TARP funds granted to the administration last week.
 
The good news for Geithner is that he knows all about the rescue fund. The bad news is that he got that knowledge by being one of its architects. As president of the New York Federal Reserve, he's been heavily involved in the effort to keep financial institutions afloat and unfreeze the credit markets.
 

Though Geithner will get a lot of tough questions, but his ultimate confirmation isn't in doubt. He'll be prepared for the onslaught. At 47, he may look young, but he's no fresh-faced

 

Senators will use the hearings as a forum to grill Geithner on where the first $350 billion went and why the plan hasn't worked. They'll demand more details around the vague plan that Obama revealed last week. Geithner will be forced to answer specific questions on how the new administration will limit executive compensation and dividends paid by assisted companies, structure foreclosure relief and extend the program beyond the financial sector to automobiles, consumers, small businesses and cities. Senators will also try to pin down his thoughts on regulatory overhaul. 

 

Geithner will have to walk a fine line between defending his role in the Treasury plan, while calling for an overhaul of it. He'll be able to lay the blame for its problems on his predecessor, Paulson. And look for him to describe how to change the plan to make it work better. He will demand more oversight and more regulation around groups that receive funds. He is already talking about creating a new department within Treasury to monitor the plan's spending. 

 




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