Geithner Apologizes, Lays Out Economic Plan

At his Senate confirmation hearings this morning, Tim Geithner, Barack Obama's pick to become Treasury secretary, apologized to Congress to his failure to pay tens of thousands of dollars in taxes, characterizing his actions as "careless mistakes."

Though the failure to pay taxes was "unintentional," Geithner said he "should have been more careful.'' Here's a primer on Geithner's tax problems.

In his opening statement before at the hearing, Geithner, who will play a central role in rehabilitating the U.S. economy if confirmed, told Senate committee members that "markets alone cannot solve all problems."

"Well-designed financial regulations with strong enforcement are absolutely critical to protecting the integrity of our economy," he said.

The treasury secretary-designee called for quick action to get credit flowing, arguing that "the tragic history of financial crises is a history of failures by governments to act with the speed and force commensurate with the severity of the crisis."

"If our policy response is tentative and incrementalist, if we do not
demonstrate by our actions a clear and consistent commitment to do what is necessary to solve the problem, then we risk greater damage to living standards, to the economy’s productive potential, and to the fabric of our financial system," he said. "Senators, the ultimate costs of this crisis will be greater, if we do not act with sufficient strength now."

Geithner, the head of the New York Federal Reserve, also said investments must be made to "lay the foundation for a stronger economic future."

"The strength of the recovery will depend critically on the investments and reforms we initiate now to expand access to health care and reduce its cost, to move toward energy independence, to sharpen and deepen the skills of American workers and to modernize our infrastructure."

Still, he said, it was important to accompany that investment with "a clear strategy to get us back as quickly as possible to a sustainable fiscal position and to unwind the extraordinary interventions taken to stabilize the financial sector."

"We need to demonstrate with clear and compelling commitments now, that when we have effectively resolved the crisis and recovery is firmly established, that as a nation, we will return to living within our means," said Geithner.

He also called for immediate comprehensive financial reform "so that the U.S. economy and the global economy never again face a crisis of this severity."

In his opening remarks, Finance Committee Chair Max Baucus said that while Geithner's tax mistakes were "disappointing," they were "innocent." He called for Geithner to be confirmed.

"I have confidence that he will address the important obligations that he will inherit, with honesty and honor," Baucus said. "And I have confidence that, with the help of his unselfish performance, America will overcome these troubled times, and emerge with renewed strength."