Timothy Geithner, defined by financial crisis, departs
He became Treasury secretary on Jan. 26, 2009, after a 60-34 Senate confirmation vote that included opposition from Republicans and Democrats.
Supporters heralded Geithner as uniquely qualified because of his experience at the height of the financial crisis.Continue Reading
That experience came with some baggage as well.
The bailout law was highly unpopular, and Geithner, while at the New York Fed, along with Federal Reserve Chairman Ben Bernanke and then-Treasury Secretary Hank Paulson, designed how the bailout funds would be used, including the injection of billions of dollars into the largest U.S. banks.
Some lawmakers were also uneasy with his failure to pay about $34,000 in taxes from 2001-04 while at the International Monetary Fund.
Lawmakers also scrutinized Geithner for employing a housekeeper months after her work authorization expired.
During Geithner’s confirmation process, he apologized for “careless” but “unintentional” mistakes while Obama’s team portrayed the tax gaffes as common errors.
Less than a month into the job, Geithner’s first big policy unveiling fell flat.
During a Feb. 10, 2009, speech outlining a “Financial Stability Plan” to jumpstart lending and strengthen banks, the Dow Jones Industrial Average dropped nearly 200 points. Lawmakers were immediately critical, including then-House Financial Services Committee Chairman Barney Frank, because of a lack of detail about housing.
By the time Geithner took office, Congress was wary of anything to do with bailouts. In March 2009, House Republicans began calling for Geithner’s resignation in part because of outrage over bonuses paid to executives at AIG, which received one of the biggest taxpayer rescues in history.
Amid bipartisan grumbling over the new Treasury secretary, the White House went on the defensive.
“There has never been a secretary of the Treasury, except maybe Alexander Hamilton, right after the Revolutionary War, who’s had to deal with the multiplicity of issues that Secretary Geithner is having to deal with — all at the same time,” Obama said in March 2009. “Nobody is working harder than this guy. He is making all the right moves in terms of playing a bad hand.”
With the president’s backing, Geithner endured.
In June 2009, Geithner introduced reforms for the Troubled Asset Relief Program bailout law enacted by President George W. Bush. The administration appointed former Sept. 11 victim fund administrator Kenneth Feinberg as a “pay czar” with the power to reject compensation plans at banks that received government assistance.
“We are working to put TARP out of its misery, and no one will be happier than I am to see that program terminated,” Geithner said at a November 2009 Joint Economic Committee hearing.
With the financial system stabilized, Geithner and the administration turned to a regulatory overhaul, culminating with enactment of the 2010 Dodd-Frank financial oversight law.