January 13, 2009

Treasury Nominee Geither’s Persistent Tax Problems Getting the Glossover Treatment; AP Coverage ‘Forgets’ at Least Chavez, Baird

Geithner0109.jpgTimothy Geithner, pictured at right in an AP photo, is Barack Obama’s nominee for Treasury Secretary.

Mr. Geithner will, among many other duties, oversee the Internal Revenue Service.

How odd, to say the least, that Mr. Geithner has had persistent tax filing and payment problems going back over 15 years involving self-employment taxes for both himself and his paid help, as well as with the employment of someone who for a time did not have proper legal status to remain in the country.

You would think that such things might place a cabinet nominee, especially to head Treasury, in jeopardy, and to cause the president who nominated him to have second thoughts. After all, in 2001, Linda Chavez’s nomination as Labor Secretary went down in flames over matters relating to an illegal immigrant whom Chavez had sheltered in her home a decade earlier. Also, in 1993, Zoe Baird withdrew as Bill Clinton’s nominee for Attorney General over the employment of illegal-immigrant domestic help and her failure to pay the related employment taxes on a timely basis.

But Geithner’s nomination is apparently getting the all clear, with pliant Republicans giving the okey-dokey, and press outlets like the Associated Press giving his problems the relatively no-big-deal treatment.

Here are some excerpts from tonight’s AP story by Brett J. Blackledge (stored here for future reference when there are subsequent updates; 5 AM Update: The link did indeed change; an alternate link that seems to match what AP had up at its own site at the time of this post’s appearance is here):

Geithner failed to pay self-employment taxes

WASHINGTON (AP) — President-elect Barack Obama’s choice to run the Treasury Department and lead the nation’s economic rescue failed to pay $34,000 in taxes from 2001 to 2004, but the last-minute disclosure didn’t stop Senate Democrats from moving forward with his nomination.

Timothy Geithner had paid some of the back taxes in 2006 after the IRS sent him a bill. When the Obama transition team discovered he owed even more back taxes, Geithner paid those additional taxes days before Obama announced his choice in November, according to materials released by the Senate Finance Committee considering his nomination.

….. Finance Committee Chairman Max Baucus, D-Mont., said he still hoped Geithner could be confirmed on Inauguration Day, asking senators for unanimous consent to skirt rules and schedule a hearing as early as Friday.

….. Utah Sen. Orrin Hatch, another committee member, said he continues to support the nominee.

….. After senators met with Geithner, the panel released 30 pages of documents detailing his tax errors – and also how he came to employ a housekeeper whose legal immigrant work status had briefly lapsed in 2005.

Senate Majority Leader Harry Reid, D-Nev., dismissed the events as “a few little hiccups,” and said he was “not concerned at all” about the impact.

….. Geithner also said he didn’t realize a housekeeper he paid in 2004 and 2005 did not have current employment documentation as an immigrant for the final three months she worked for him, the documents indicated.

One of his housekeepers’ legal authorization to work in the United States expired on July 15, 2005, and the person continued to work for Geithner until October of that year, the committee’s report states.

….. The committee’s materials said Geithner “has experience with Social Security tax issues.” He filed the taxes late for his household employees in 1996 for years 1993 to 1995; he incorrectly calculated Medicare taxes for his household employees in 1998 and received an IRS notice; and he received notices from the Social Security Administration and the IRS after not filing 2003 and 2004 forms for his household employees, the report states.

Would it be impolite to suggest that had Geithner not been nominated, the odds that he would have caught up on all of his tax obligations when he did are very, very low?

Giethner’s personal self-employment “mistakes” have to do with his obligation to pay Social Security taxes on his income when he worked at the International Monetary Fund. The IMF is exempt from paying the employer’s share, and apparently doesn’t withhold any amounts for Social Security on employees’ behalf. It’s easy to see how non-financial administrative employees might get tripped up here, but the idea that Giethner wasn’t aware of his obligations makes him either evasive, negligent, or incompetent. The same possible adjectives apply to the fact that he took as long as he did to catch up on his assessments. These are usually not qualities one looks for in a Treasury Secretary.

While the problem with the legal status of his housekeeper might seem minor, it should not be forgotten and Chavez and Baird withdrew their nominations in somewhat related circumstances. The AP’s Blackledge should have at least noted the past problems of other nominees and their results.

So why does Geithner deserve a Senatorial and journalistic pass, let alone an assumed instant, rule-skirting nomination on Inauguration Day? No one has even begun to explore the issue of how aware he should have been of some of the serious troubles at the Wall Street money center banks that just so happen to be headquartered in the Fed district he has overseen, and what he could have or should have done to prevent some of the implosions that occured there.

Cross-posted at NewsBusters.org.

At Least $2.5 Trillion — and Counting, Counting, Counting …..

Filed under: Economy,Taxes & Government — Tom @ 3:47 pm

This was going to be an “I told you so” post.

After all, in my December 28 reaction to Ted Strickland’s wish list for himself and his fellow governors, I said that:

By the time they’re done spending us into oblivion in Washington, don’t be surprised if the grand total (of the stimulus) is more like $2 trillion.

When I saw James Pethokoukis’s latest post at US News’s Capital Commerce Blog, I was ready with the “told ya”:

Liberals: We Need $2 Trillion in Stimulus Spending

Economic analyst Robert Kuttner voices the liberal dream of using the recession to justify spending  trillions of dollars on loads of liberal policy wishes, all to the tune of $2 trillion over the next two years.

Kuttner’s list, per Pethokoukis:

1) Aid to state and local governments [so they can avoid layoffs or cuts in services]. Cost: $200 billion.

2) Emergency revenue sharing to states and cities by picking up half of the state share of Medicaid. Cost: $100 billion.

3) Have government temporarily pay most of the cost of COBRA coverage for laid off people who lose their health insurance, and allow people over age 55 to buy into Medicare. Cost: $100 billion.

4) Expand Unemployment Insurance to cover part time workers, extend eligibility period, and increase benefit levels. Cost: $50 billion.

5) Roll back tuitions at state universities and community colleges, and increase Pell Grants–contingent on universities not increasing costs to students. Cost: $100 billion.

6) Declare a temporary holiday on the worker share of the Social Security tax, and have government make up the loss to the trust fund, contingent on employers not cutting wages. Cost: $450 billion.

7) Continue many of the [previously mentioned] relief programs into a second year, as economic conditions warrant. Cost: $500 billion.

8) Use direct federal lending to refinance distressed mortgages, and as necessary reduce the outstanding principal amount. This can begin by mid-2009. Cost: $200 billion of subsidy; most additional debt is eventually repaid.

9) Begin planning immediately for a broad range of infrastructure programs, from traditional outlay on roads, bridges and mass transit to spending on 21st century infrastructure such as retrofitting homes, green energy, universal broadband, and smart-grid electricity systems. Spend money on worker training as necessary. Cost: $300 billion.

There’s only one “tiny” problem: Kuttner’s list isn’t the only one out there. There are at least the lists of Ted Strickland’s gubernatorial grabbers and Barack Obama’s current list to contend with. There are also others, but merely comparing Kuttner and Strickland moves me from a proud “told ya” posture to a penitent “I was wrong, I am sorry.”

Combining Kuttner with Strickland clearly moves the number way past $2 trillion, because Strickland covets quite a few additional items:

First, he (Strickland) is angling for a $250 billion increase in federal payments for food stamps and Medicaid, the government health program for impoverished Americans and, increasingly, the working poor. Second, he favors a $250 billion national investment in infrastructure projects. Ohio has a list of “shovel-ready” projects, including roads, water and sewer improvements and “green economy” investments.

Third, in search of a palatable pitch to a Congress and nation numbed by the parade of rescue packages, Strickland is teaming with a handful of other Democratic governors to seek a $250 billion infusion for education.

Comparing the two, Kuttner doesn’t mention food stamps at all. Strickland’s infrastructure list appears to contain items (at least “water and sewer improvements”) not in Kuttner’s. Finally, Strickland’s education number is a whopping $150 billion more than Kuttner’s ($250 bil vs. $100 bil).

In sum, there’s easily $200 billion, and possibly $300 billion, in what Strickland wants that isn’t in what Kuttner wants.

More than likely, there are items in Barack Obama’s $775 billion agenda that are over and above what either Kuttner or Strickland envision. Beyond all of that, there are surely additional items in municipal wish lists from places like the City of Detroit ($10 billion), Cleveland ($730 million), and others.

You can start with Kuttner’s $2 trillion and raise to at least $2.5 trillion with other items on others’ lists without breaking much of a sweat. And they certainly aren’t done dreaming.

As I said, I was wrong, and I am sorry. Because of that, I’m not going to speculate on what the upper limit of all this nonsense could possibly be by the time it’s all done.

Even more troubling, if that’s possible, Kuttner’s list includes items that would be advertised as temporary, but if enacted, will more than likely remain permanent. Does anyone believe that lowering Medicare eligibility to age 55 could be stopped once it started? Does anyone think that socializing COBRA could be undone? Would Uncle Sam’s increased share of Medicaid costs ever be cut back?

Thus, Kuttner is advocating “stimulus” items that are really major and permanent structural increases in the size and scope of Washington’s control over the economy, and our lives.

Given the quantity and quality of the opposition in Washington, we are in a world of hurt.

Do I hear $3 trillion? $4 trillion?

Couldn’t Help But Comment (011309, Morning)

The New York Times wouldn’t be in serious financial trouble if, instead of inventing stories to hurt people it didn’t like, it had employed more on-the-scene reporting like this (HT Taranto at Best of the Web) over the past seven years (bolds are mine):

A car arrived (at Shifa Hospital in Gaza) with more patients. One was a 21-year-old man with shrapnel in his left leg who demanded quick treatment. He turned out to be a militant with Islamic Jihad. He was smiling a big smile.

“Hurry, I must get back so I can keep fighting,” he told the doctors.

He was told that there were more serious cases than his, that he needed to wait. But he insisted. “We are fighting the Israelis,” he said. “When we fire we run, but they hit back so fast. We run into the houses to get away.” He continued smiling.

“Why are you so happy?” this reporter asked. “Look around you.”

A girl who looked about 18 screamed as a surgeon removed shrapnel from her leg. An elderly man was soaked in blood. A baby a few weeks old and slightly wounded looked around helplessly. A man lay with parts of his brain coming out. His family wailed at his side.

“Don’t you see that these people are hurting?” the militant was asked.

“But I am from the people, too,” he said, his smile incandescent. “They lost their loved ones as martyrs. They should be happy. I want to be a martyr, too.”

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John Dendahl at Family Security Matters has a portrayal of Bill Richardson that makes you wonder how Barack Obama could have nominated New Mexico’s governor as Commerce Secretary:

Richardson’s combination of pay-to-play and ruthless retaliation have dragged too many citizens who should be principled civic leaders to the level of prostitute or whipped dog.

…..  That Barack Obama selected Richardson for a Cabinet position is clear evidence that either 1) pay-to-play is fine so long as you don’t get busted, or 2) his vetting operation, having missed something so obvious in Richardson’s M.O., is utterly incompetent.

….. Organized Labor represents practically no one in the private sector in New Mexico, and lost its legal right to represent public employees when the relevant statute “sunsetted” during the term of Richardson’s predecessor, Gary Johnson. The Legislature didn’t have the votes to override Johnson’s veto of its bill to extend. With direct contributions and indirect expenditures, Labor lavishly supported Richardson’s 2002 campaign for governor. One of its most aggressive bosses, Brian Condit, was soon the Richardson transition organization’s apparent gatekeeper for appointive positions.

Labor got its big reward by immediate restoration of its collective bargaining statute without a sunset, then card-check recognition (that is, no secret ballot elections) of two unions for bargaining units spread around the state …..

In addition to the corruption problems, it appears that promoting commerce would not have been high on Richardson’s agenda.

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IBDeditorials.com lays down a marker. Come back to this 20 years from now:

Leadership: George W. Bush was pegged as a hate figure even before being sworn in. Yet he resisted bitterness, stuck to principle and became what history will judge to be one of our better presidents.

….. when the establishments of both parties in Washington insisted on throwing in the towel in Iraq, rather than accepting the status quo because the party might end up not doing well in the elections, Bush “decided to do something about it — and sent 30,000 troops in as opposed to withdrawing.”

Asked about alleged damage to America’s international image, the president offered a challenge: “Ask Africans about America’s generosity and compassion; go to India . . . go to China and ask . . .. No question parts of Europe have said that we shouldn’t have gone to war in Iraq without a mandate, but those are a few countries.”

On Hurricane Katrina, he asked: “When I hear people say, ‘The federal response was slow,’ then what are they going to say to those chopper drivers, or the 30,000 that got pulled off the roofs?”

Fair enough, though I’m not clear on the China part. That said, there is no doubt that Michelle Malkin is right that the spending side of Bush’s legacy is in tatters, and that Bush’s version of “compassionate conservatism” (a term which, when applied properly, is redundant) ended up being a formula for state expansion that will haunt the nation for years, if not forever. Malkin also clearly deserves credit for being among the very few to predict Bush’s fiscal problems (read the linked post for plenty of her 2000 columns).

I gave Bush a pass on spending for the first couple of years after 9/11 because it was clear that if it seemed like domestic “needs” were being compromised, the opposition to a coherent War on Terror would have gained the upper hand, leaving us unconscionably vulnerable. Thus, overspending was a deliberate political calculation sadly necessary to our survival.

But, except for the single year preceding the Democratic takeover of the House, the spending restraint never arrived, gave the Pelosi-Reid Congress the political cover to ramp spending up much further, and made formerly unthinkable ideas like the Treasury Secretary’s SUCKUP (Seemingly Unlimited Cash Kitty Under Paulson) feasible.

So I’m not down with the “one of our better presidents” claim by IBD. Just in terms of post-WWII — Better than Nixon, Ford, Carter, LBJ, Kennedy, and DRIFT-POTUS (Demonstrated Rapist and Impeached Former Terror-enabling President Of The United States) Bill Clinton? Of course. Not as good as Truman, Ike, Reagan, and Bush 41? Definitely (but in Truman’s case, barely).

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Carol Marin at the Chicago Sun-Times (HT Warner Todd Huston at NewsBusters), on the Obama-pliant press (bold is mine):

As ferociously as we march like villagers with torches against Blagojevich, we have been, in the true spirit of the Bizarro universe, the polar opposite with the president-elect. Deferential, eager to please, prepared to keep a careful distance.

The Obama news conferences tell that story, making one yearn for the return of the always-irritating Sam Donaldson to awaken the slumbering press to the notion that decorum isn’t all it’s cracked up to be.

The press corps, most of us, don’t even bother raising our hands any more to ask questions because Obama always has before him a list of correspondents who’ve been advised they will be called upon that day.

Uh ….. where’s the outrage?

It makes you wonder if Obama has also told them what questions he’ll answer.

Prediction: Criticism from the so-called guardians of journalistic integrity will be non-existent.

Weblog Awards Balloting Ends at 5PM

Filed under: News from Other Sites — Tom @ 6:28 am

WLA2008logo.jpgI recommend one last vote for the following (links are to ballot pages):

Positivity: Nine-Year-Old Missing Girl Found By Police Using Google Street View

Filed under: Positivity — Tom @ 5:57 am

From Athol, Mississippi:

January 10, 2009 3:22 p.m. EST

A nine-year-old girl, who went missing as she was allegedly abducted by her grandmother, was tracked down by police using Google’s Street View on the internet and a mobile phone signal.

Natalie Maltais went missing on Saturday after her grandmother Rose M. Maltais, 52, did not return with her following a weekend away, the officials based in Athol, Massachusetts said.

A local police officer and a deputy chief in the town’s fire department found Rose with the use of GPS satellite technology in the girl’s mobile phone.

The GPS coordinates, which provide a rough location within 300 yards, were used by deputy fire chief Thomas Lozier, who then used Google Street View to spot a hotel where they were staying.

Google Street View application provides 360 degree panorama image of roads at eye-level.

Rose was arrested by Virginia State Police at the Budget Inn in Natural Bridge, Virginia, at around 4:15 p.m local time on Tuesday, the local reports said. …..

Go here for the rest of the story.