All Blog Posts from Political Hotsheet

Treasury Secretary Timothy Geithner said at the The First Draft of History conference in Washington, D.C. Thursday that the goal is U.S. fiscal policy "should never be to save people from their mistakes."

He said it is important to "create a system that can withstand their failure, so you can let them fail" and then control the damage.

The treasury secretary told Chris Wallace of Fox News that it is important to preserve "the competitive market that allows for innovation" – but said that doing so "doesn't work so well, as we learned, if you don't put in strong standards to protect consumers."

He said the administration was seeking to establish "sensibly designed stronger standards, enforced across the country" as well as "constrain excess leverage in the financial system."

Though unemployment remains "appallingly high" and "we're nowhere close to declaring victory," Geithner said he sees "tentative signs of growth" in the economy.

"We’re only just beginning to see the signs of recovery," he said.

Geithner said the most important decision the administration has made so far on monetary policy "has been to come together early" with the rest of the world and "agree on a common strategy and execute it."

He said the "classic mistake" of waiting too long to act and then being tentative had thus been avoided.

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Treasury Secretary Timothy Geithner today said the U.S. government is "not proposing an ongoing government role in setting policy and compensation" – even as he and the Obama administration call for legislation allowing shareholders to apply (nonbinding) pressure over executive pay.

"We do not believe it's appropriate for the government to set caps on compensation," he said. "We are not going to prescribe detailed prescriptive rules for compensation. We think all those things would be ineffective, could be counterproductive in some ways."

Watch:

Treasury Secretary Timothy Geithner is not only struggling to right the reeling economy, he's also fighting for his political life.

Battered by controversy surrounding the $165 million in bonuses doled out by AIG and still reeling from tax problems that jeopardized his nomination last January, Geithner has been assailed this week by Republican leaders over his handling of the financial crisis.

Many speculate that Geithner may soon find himself a victim of the bailout bonus controversy. Odds that Geithner will be ousted by June 30th have doubled to 21 percent over the past two days according to predictions by intrade.com, The Business Insider reports.

A barrage of recent criticism lends credence to the Web site's assessment of the treasury secretary's withering prospects for survival. Here's what some of Geithner's Capital Hill critics are saying:

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The Obama administration today is announcing new rules for executive compensation at those firms that receive assistance from the Treasury as part of the financial bailout programs.

Highlighting the announcement today are rules that senior executives at the firms that receive bailout money will not be able to receive more than $500,000 in annual pay.

Click here for more CBSNews.com coverage of the announcement.

Click here for text of Mr. Obama's announcement.

Below is the text of the release from the White House with details on the new rules:

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Senate Finance Chairman Max Baucus has scheduled a confirmation hearing for President-elect Barack Obama's pick to be Treasury secretary, Timothy Geithner, for next Wednesday, January 21st.

Baucus wanted to hold the hearing this Friday, January 16th, but Republican Sens. Jon Kyl and Jim Bunning opposed holding the hearing on that date, according to the Washington Post. If they lift their objections, Baucus will try to hold the hearing Friday.

Democrats had hoped to have Geithner sworn in by January 20th, Inauguration day, so that he could immediately begin leading the effort to address the economic crisis under the new Obama administration.

Geithner's confirmation has come into question following revelations that he failed to pay tens of thousands of dollars in taxes and employed a housekeeper who lacked proper documents for the last three months of her employment.

The Obama team dismissed Geithner's errors as "honest mistakes," however, and pushed hard to keep the nomination on track. Their efforts appear to have been effective: Democrats and even some Republicans appear poised to back Geithner despite the revelations.

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Revelations that Timothy Geithner failed to pay $34,000 in taxes and employed a housekeeper whose permit to work in the United States had expired are "little hiccups" in the process of confirming President-elect Barack Obama's designee for Treasury Secretary, says Senate Majority Leader Harry Reid.

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*NOTE: This post has been rewritten as new information has come in.

This afternoon, President-elect Barack Obama's pick to be Treasury secretary, Timothy Geithner, met with members of the Senate Finance Committee to address questions about his payment of personal taxes and the immigration status of a housekeeper.

As reports about the meeting surfaced, the transition team released a statement standing behind Geithner but effectively confirming that questions were being raised.

Geithner "made a common mistake on his taxes, and was unaware that his part-time housekeeper's work authorization expired for the last three months of her employment," incoming White House press secretary Robert Gibbs said. "We hope that the Senate will confirm him with strong bipartisan support so that he can begin the important work of the country."

"The President-elect chose Tim Geithner to be his Treasury Secretary because he's the right person to help lead our economic recovery during these challenging times," added Gibbs. "He's dedicated his career to our country and served with honor, intelligence and distinction. That service should not be tarnished by honest mistakes, which, upon learning of them, he quickly addressed."

Back in 1993, Zoe Baird and Kimba Wood, both nominated to be attorney general by Bill Clinton, withdrew from consideration after revelations that they had hired undocumented immigrants.

After this afternoon's meeting, reports CBS News' John Nolen, Democrats suggested that Geithner had made an honest mistake, and while the issues were serious, they didn't rise to the level of disqualification. Republicans on the committee did not offer comment.

"I am disappointed in the errors found in Tim Geithner's tax returns and other information, but I am satisfied that Mr. Geithner has taken the steps necessary to fix these problems," Senate Finance Committee Chairman Max Baucus said in a statement released after the meeting. "That's why I intend to move forward as soon as possible with a hearing on his nomination. The President-Elect needs a Treasury Secretary on day one. We have to roll up our sleeves and get this economy moving again for the American people, and Tim Geithner has the right combination of experience and skill for these difficult economic times. For these reasons, I continue to support his nomination to be the next Secretary of the Treasury."

Senate Majority Leader Harry Reid, meanwhile, suggested that the issues amounted to just "a few little hiccups" and said he is "not concerned at all," reports CBS News' Jill Jackson.

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