Timothy Geithner

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Timothy F. Geithner


Incumbent
Assumed office 
January 26, 2009
President Barack Obama
Preceded by Henry Paulson

In office
November 17, 2003 – January 26, 2009
Preceded by William McDonough
Succeeded by William Dudley

Born August 18, 1961 (1961-08-18) (age 48)
Brooklyn, New York, USA
Nationality American
Political party Democratic
Spouse(s) Carole M. Sonnenfeld
Children Elise and Benjamin Geithner
Alma mater Johns Hopkins University (M.A.)
Dartmouth College (A.B.)
Occupation Civil Servant
Signature
Website Secretary of Treasury

Timothy Franz Geithner (pronounced /ˈɡaɪtnər/; born August 18, 1961), is the 75th and current United States Secretary of the Treasury, serving under President Barack Obama. He was previously the president of the Federal Reserve Bank of New York.

Geithner's position includes a large role in directing the Federal Government's economic response to the financial crisis which began after December 2007. Specific tasks include directing the allocation of $350 billion of Wall Street bailout funds. He is currently dealing with multiple high visibility issues, including the survival of the automobile industry, the restructuring of banks, financial institutions and insurance companies, recovery of the mortgage market, demands for protectionism, President Obama's tax changes, and relations with foreign governments that are dealing with similar crises.[1]

Contents

[edit] Biography

[edit] Early life and education

Geithner was born in Brooklyn, New York.[2] He spent most of his childhood living outside the United States, including present-day Zimbabwe, Zambia, India, and Thailand where he completed high school at International School Bangkok in Bangkok, Thailand.[3] He attended Camp Becket-in-the-Berkshires-for-boys, a summer camp located in western Massachusetts. He then attended Dartmouth College, graduating with an A.B. in government and Asian studies in 1983.[4] In the process he studied Mandarin at Peking University in 1981 and at Beijing Normal University in 1982.[5] He earned an M.A. in international economics and East Asian studies from Johns Hopkins University's School of Advanced International Studies in 1985.[4][6] He has studied Chinese[4] and Japanese.[7]

Geithner's paternal grandfather, Paul Herman Geithner (1902–1972), emigrated with his parents from the German town of Zeulenroda to Philadelphia, Pennsylvania in 1908.[8] His father, Peter F. Geithner, is the director of the Asia program at the Ford Foundation in New York. During the early 1980s, Peter Geithner oversaw the Ford Foundation's microfinance programs in Indonesia being developed by S. Ann Dunham-Soetoro, President Barack Obama's mother, and they met in person at least once.[9] Timothy Geithner's mother, Deborah Moore Geithner, is a pianist and piano teacher in Larchmont, New York where his parents currently reside. Geithner's maternal grandfather, Charles F. Moore, was an adviser to President Dwight D. Eisenhower and served as Vice President of Public Relations from 1952-1964 for Ford Motor Company.[10]

[edit] Early career

After completing his studies, Geithner worked for Kissinger and Associates in Washington, D.C., for three years and then joined the International Affairs division of the U.S. Treasury Department in 1988. He went on to serve as an attaché at the US Embassy in Tokyo. He was deputy assistant secretary for international monetary and financial policy (1995–1996), senior deputy assistant secretary for international affairs (1996-1997), assistant secretary for international affairs (1997–1998).[6]

He was Under Secretary of the Treasury for International Affairs (1998–2001) under Treasury Secretaries Robert Rubin and Lawrence Summers.[6] Summers was his mentor,[11][12] but other sources call him a Rubin protégé.[12][13][14]

Treasury Secretary designee Geithner meets Finance Committee Chairman Max Baucus on November 25, 2008

In 2002 he left the Treasury to join the Council on Foreign Relations as a Senior Fellow in the International Economics department.[15] He was director of the Policy Development and Review Department (2001-2003) at the International Monetary Fund.[6]

In October 2003 at age 42,[16] he was named president of the Federal Reserve Bank of New York.[17] His salary in 2007 was $398,200.[18] Once at the New York Fed, he became Vice Chairman of the Federal Open Market Committee component. In 2006, he also became a member of the Washington-based financial advisory body, the Group of Thirty.[19] In May 2007 he worked to reduce the capital required to run a bank.[16] In November he rejected Sanford Weill's offer to take over as Citigroup's chief executive.[16]

In March 2008, he arranged the rescue and sale of Bear Stearns;[11][20] in the same year, he played a pivotal role in both the decision to bail out AIG as well as the government decision not to save Lehman Brothers from bankruptcy, though claims were made after Geithner's nomination that distanced him from both AIG and Lehman Brothers.[21] As a Treasury official, he helped manage multiple international crises of the 1990s[13] in Brazil, Mexico, Indonesia, South Korea and Thailand.[14]

Geithner believes, along with Henry Paulson, that the United States Department of the Treasury needs new authority to experiment with responses to the financial crisis of 2008.[11] Paulson has described Geithner as "[a] very unusually talented young man...[who] understands government and understands markets."[20]

[edit] Secretary of the Treasury nomination

On November 24, 2008, then-President-elect Barack Obama announced his intention to nominate Geithner to be Treasury Secretary.[22][23]

[edit] China

Geithner, and the Obama administration, appeared to adopt a somewhat confrontational stance towards China's economic policies during the campaign and the nominal period.[citation needed] Geithner, in written comments to the Senate Finance Committee, states that the new administration believes Beijing is "manipulating" its currency and that the Obama administration will act "aggressively" using "all the diplomatic avenues" to change China's currency practices.[24] The Obama administration would pressure China diplomatically to change this practice,[24] more strongly than the George W. Bush Administration did.[25] The United States maintains that China's actions hurt American businesses and contributed to the financial crisis.[26] In the early months of the Obama administration, Geithner continued to have a rocky relationship with the Chinese. During one of his trips in June of 2009, students at Peking University laughed at him for claiming China's US assets are safe.[27]

[edit] Tax problems

At the Senate confirmation hearings, it was revealed that Geithner had not paid $35,000 in self-employment taxes for several years,[28] even though he had acknowledged his obligation to do so, and had filed a request for, and received, a payment for half the taxes owed. The failure to pay self-employment taxes, in part due to the way his employer reported his wages which was not in accordance with tax law, was noted during a 2006 audit by the Internal Revenue Service (IRS), in which Geithner was assessed additional taxes of $14,847 for the 2003 and 2004 tax years. Geithner also failed to pay the self-employment taxes for the 2001 and 2002 tax years (for which the statute of limitations had expired) until after Obama expressed his intent to nominate Geithner to be Secretary of Treasury.[29] He also deducted the cost of his children's sleep-away camp as a dependent care expense, when only expenses for day care are eligible for the deduction.[30] Geithner subsequently paid the IRS the additional taxes owed,[31] and was charged $15,000 interest, but was not fined for late payment.[32] As President of the Federal Reserve Bank of New York, Geithner annually completed an ethics statement noting any taxes due or unpaid, along with any other obligations. Geithner's completed statement did not surface during confirmation hearings.

In a statement to the Senate panel considering his nomination, Geithner called the tax issues "careless," "avoidable" and "unintentional" errors, and he said he wanted to "apologize to the committee for putting you in the position of having to spend so much time on these issues."[31] Geithner testified that he used TurboTax to prepare his own return and that the tax errors are his own responsibility.[33] This statement is in conflict with statements by the Obama campaign that Geithner was advised by his accountant that he did not owe the taxes.[34] The Washington Post quoted a tax expert who said that TurboTax has not been programmed to handle self-employment taxes when the user identifies himself as being employed.[35] Geithner said at the hearing that he was always under the impression that he was an employee, not a self-employed contractor,[35] while he served as director of the Policy Development and Review Department of the IMF.[6] Geithner comments are contradicted by the Senate report that showed he was not only informed of his status, but that he actively applied for the allowance.[36]

[edit] Confirmation

Geithner is sworn in as Treasury Secretary

On January 26, 2009, the U.S. Senate confirmed Geithner's appointment by a vote of 60–34.[37][38] Geithner was sworn in as Treasury Secretary by Vice President Joe Biden and witnessed by President Barack Obama.[39]

[edit] Secretary of the Treasury

[edit] Bank bailout

Geithner has the authority to decide what to do with the second tranche of $350 billion from the $700 billion banking bailout bill passed by Congress in October 2008. He does not need Congressional approval, but went to Congress on February 10-11 to explain his plans. He proposes to create one or more "bad banks" to buy and hold toxic assets, using a mix of taxpayer and private money. He also proposes to expand a lending program that would spend as much as $1 trillion to cover the decline in the issuance of securities backed by consumer loans. He further proposes to give banks new infusions of capital with which to lend. In exchange, banks would have to cut the salaries and perks of their executives and sharply limit dividends and corporate acquisitions.[40][41] The plan has been criticized by Nobel-prize winning economist Paul Krugman[42] as well as fellow Nobel laureate and former World Bank Chief Economist Joseph Stiglitz[43]

June 17, 2009:

Geithner speaking at the United States Department of Treasury.

Timothy Geitner along with President Obama proposed a new bureaucratic committee to oversee operations by the FDIC, Federal reserve, and the SEC. The committee would serve to consolidate governmental control over financials. Geithner, states “with new laws in place government will be able to take control of troubled institutions before it’s too late.”[44]

[edit] AIG bonuses

Although President Obama expressed strong support for Geithner, the outrage over the AIG bonuses has undermined public support. AIG paid bonuses to executives in its Financial Services division after receiving more than $170 billion in federal bailout aid.[45] Even prior to the election, senior aides to Timothy Geithner have closely dealt with American International Group Inc. on compensation issues including bonuses, both from his time as president of the Federal Reserve Bank of New York and as Treasury secretary. In early November, 2008, a committee concluded that the bonuses, which were in contracts signed before the government takeover, couldn't be legally blocked. On March 3, 2009, appearing at a hearing of the House Ways and Means Committee Rep. Joseph Crowley, a New York Democrat, asked him about the bonuses that AIG would be paying to financial-products employees "in the coming weeks." On March 11, Geithner called Mr. Edward Liddy, AIG chief, to protest the bonus payouts. Mr. Geithner and Federal Reserve Chairman Ben Bernanke attended a hearing by Congress on March 24, 2009.[46]

[edit] China

Geithner with Secretary of State Hillary Rodham Clinton at the opening session of the first U.S.-China Strategic and Economic Dialogue on July 27, 2009.

Geithner met with Chinese Foreign Minister Yang Jiechi shortly after he assumed his role as Secretary of the Treasury. Geithner told Yang that the U.S. attaches great importance to its relations with China and that U.S.-China cooperation was essential in order for the world economy to fully recover.[47]

During Tim Geithner's trip to China on June 1, 2009, he was asked a question from a student about the safety of Chinese investments in U.S. Treasury debt. Geithner quickly reassured the student questioner they were "Very safe", as the audience laughed.[48][49]

Geithner co-chaired the high-profile U.S.-China Strategic and Economic Dialogue from July 27 to 28 in Washington, DC and led the Economic Track for the U.S. side.

[edit] Family

He married Carole Sonnenfeld Geithner on June 8, 1985 at his parents' summer home in East Orleans, Mass. The Rev., Thomas Keehn, a United Church of Christ minister, officiated. Ms. Sonnenfeld Geithner was working as a research associate for Common Cause at the time of her marriage to Mr Geithner. Her father, Albert Sonnenfeld, was a professor of French and comparative literature at Princeton University, and her mother, Portia Sonnenfeld, was the conductor of the Chamber Symphony of Princeton. [50]

Timothy and Carole Sonnenfeld Geithner have two children, Elise (b. 1991) who attends Stanford University, and Benjamin (b. 1994).

[edit] Memberships

[edit] References

  1. ^ "[1]". 60 Minutes. CBS. March 22, 2009.
  2. ^ America.gov
  3. ^ "Carole M. Sonnenfeld wed to T. F. Geithner". New York Times. 9 June 1985. http://query.nytimes.com/gst/fullpage.html?res=9402E3DA1539F93AA35755C0A963948260. Retrieved November 22, 2008. 
  4. ^ a b c Farley, Kate (3 October 2008). "Family describes Geithner ‘83’s youth". Hanover, NH: The Dartmouth. http://thedartmouth.com/2008/10/03/news/geithner/. Retrieved November 22, 2008. 
  5. ^ http://www.treas.gov/press/releases/tg152.htm
  6. ^ a b c d e f "Timothy F. Geithner". Who's Who (Marquis Who's Who): pp. K2017000959. 22 November 2008. http://www.marquiswhoswho.com/. Retrieved November 22, 2008. 
  7. ^ "Obama picks dynamic duo to rescue US". BusinessDay (The Sydney Morning Herald). 24 November 2008. http://www.businessday.com.au/business/world-business/obama-picks-dynamic-duo-to-rescue-us-20081124-6ezb.html?page=3. Retrieved November 25, 2008. 
  8. ^ http://freepages.genealogy.rootsweb.ancestry.com/~battle/celeb/geithner.htm
  9. ^ "Ford Foundation Links Parents of Obama and Treasury Secretary Nominee". Chronicle of Philanthropy. 2008-12-03. http://philanthropy.com/news/government/index.php?id=6453. Retrieved 2008-12-20. 
  10. ^ Milton, Susan (25 November 2008). "Treasury nominee has ties to Orleans". News (Cape Cod Times). http://www.capecodonline.com/apps/pbcs.dll/article?AID=/20081125/NEWS/811250313. Retrieved November 26, 2008. 
  11. ^ a b c Cho, David; Montgomery, Lori; Murray, Shailagh (22 November 2008). "Obama Picks N.Y. Fed President Geithner as Treasury Secretary". Business (The Washington Post): p. A1. http://www.washingtonpost.com/wp-dyn/content/article/2008/11/21/AR2008112102811.html?hpid=topnews. Retrieved November 23, 2008. 
  12. ^ a b Canova, Timothy (25 November 2008). "Obamanomics: Is this real change?". The Real News. p. 1'00s. http://therealnews.com/id/2852/November25,2008/Obamanomics%3A+Is+this+real+change%3F. Retrieved December 13, 2008. "He had been mentored by Lawrence Summers." 
  13. ^ a b Irwin, Neil (22 November 2008). "A Treasury Contender Schooled in Crisis". Business (The Washington Post=): p. A6. http://www.washingtonpost.com/wp-dyn/content/article/2008/11/21/AR2008112103939.html. Retrieved November 23, 2008. 
  14. ^ a b "Obama picks Geithner as treasury secretary". The Financial Express. Mumbai: Indian Express Newspapers. 23 November 2008. http://www.financialexpress.com/news/Obama-picks-Geithner-as-treasury-secretary/389429/. Retrieved November 23, 2008. "Geithner is a protege of Lawrence Summers and has been involved in the bailouts of Brazil, Mexico, Indonesia, South Korea and Thailand in the 1990s as the treasury undersecretary" 
  15. ^ a b "Timothy F. Geithner". About the Fed. New York, NY: Federal Reserve Bank of New York. July 2007. http://www.ny.frb.org/aboutthefed/orgchart/geithner.html. Retrieved November 22, 2008. 
  16. ^ a b c Becker, Jo and Morgenstern, Gretchen (April 26, 2009). "Geithner, as Member and Overseer, Forged Ties to Finance Club". The New York Times. http://www.nytimes.com/2009/04/27/business/27geithner.html. Retrieved 2009-04-26. 
  17. ^ Fuerbringer, Jonathan (16 October 2003). "I.M.F. Official Is Named President of New York Fed". Business (The New York Times). http://query.nytimes.com/gst/fullpage.html?res=9407E6DE173EF935A25753C1A9659C8B63. Retrieved November 24, 2008. 
  18. ^ Lanman, Scott (24 November 2008). "Geithner Nomination Takes Top Fed Wall Street Liaison". News. Bloomberg. http://www.bloomberg.com/apps/news?pid=20601070&sid=antGHYUBhUn4&refer=home. Retrieved November 24, 2008. 
  19. ^ "Timothy F. Geithner" (Bios). Current Members. Group of Thirty. 24 November 2008. http://www.group30.org/bios/members15.htm. Retrieved November 24, 2008. 
  20. ^ a b Tumulty, Karen; Calabresi, Massimo (25 September 2008). "Three Men And a Bailout". Time. http://www.time.com/time/magazine/article/0,9171,1844554,00.html. Retrieved November 22, 2008. 
  21. ^ Sorkin, Andrew (24 November 2008). "Where Was Geithner in Turmoil?". New York Times. http://www.nytimes.com/2008/11/25/business/25sorkin.html. Retrieved March 29, 2009. 
  22. ^ change.gov (24 November 2008). "Geithner, Summers among key economic team members announced today". Newsroom. Office of the President-elected. http://change.gov/newsroom/entry/geithner_summers_among_key_economic_team_members_announced_today/. Retrieved November 24, 2008. 
  23. ^ "Geithner to Be Nominated as Treasury Secretary". CNBC. 21 November 2008. http://www.cnbc.com/id/27844707. Retrieved November 21, 2008. 
  24. ^ a b Montgomery, Lori; Faiola, Anthony (January 23, 2009). "Geithner Says China Manipulates Its Currency". The Washington Post: p. A08. http://www.washingtonpost.com/wp-dyn/content/article/2009/01/22/AR2009012203796.html. 
  25. ^ Drajem, Mark; Christie, Rebecca (January 23, 2009). "Geithner Warning on Yuan May Renew U.S.-China Tension". Bloomberg LP. http://www.bloomberg.com/apps/news?pid=20601087&sid=aRUmXlbmq7MU&refer=home. 
  26. ^ Moore, Malcolm (January 23, 2009). "Timothy Geithner currency 'manipulation' accusation angers China". The Daily Telegraph. http://www.telegraph.co.uk/finance/economics/4320979/Timothy-Geithner-currency-manipulation-accusation-angers-China.html. 
  27. ^ http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5423650/Geithner-insists-Chinese-dollar-assets-are-safe.html
  28. ^ Hirschfield Davis, Julie (January 14, 2009). "Tax problems may plague Obama's treasury pick". Associated Press (My Way News). http://apnews.myway.com/article/20090114/D95MTVI05.html. 
  29. ^ "Documents regarding Treasury nominee Geithner" (PDF). Senate Finance Committee (United States Senate). January 13, 2009. http://finance.senate.gov/press/Bpress/2009press/prb011309d.pdf. 
  30. ^ Gandel, Stephen (January 21, 2009). "Tax Tips for Geithner". Time. http://www.time.com/time/politics/article/0,8599,1872925,00.html. 
  31. ^ a b Felsenthal, Mark; Lawder, David (January 21, 2009). "Geithner urges bailout reforms, apologizes on taxes". Reuters. http://www.reuters.com/article/marketsNews/idUSN2130757020090121. 
  32. ^ Hallow, Ralph Z. (January 20, 2009). "Gingrich urges GOP to fight Geithner". The Washington Times. http://www.washingtontimes.com/news/2009/jan/20/gingrich-urges-gop-to-oppose-geithner/. 
  33. ^ "Geithner Links Woes to Tax Software Used by 18 Million Americans". Fox News. January 22, 2009. http://www.foxnews.com/politics/first100days/2009/01/22/geithner-want-double-check-taxes/. 
  34. ^ http://online.wsj.com/article/SB123187503629378119.html
  35. ^ a b Aherns, Frank (January 21, 2009). "Treasury Pick Misfiled Using Off-the-Shelf Tax Software". Washington Post: p. D1. http://www.washingtonpost.com/wp-dyn/content/article/2009/01/21/AR2009012103552.html?hpid=topnews. 
  36. ^ http://finance.senate.gov/press/Bpress/2009press/prb011309d.pdf
  37. ^ [2]
  38. ^ http://voices.washingtonpost.com/economy-watch/2009/01/geithner_by_senate.html?hpid=topnews
  39. ^ Jackie Calmes (2009-01-26). "Senate Confirms Geithner for Treasury". New York Times. http://www.nytimes.com/2009/01/27/us/politics/27geithner.html. Retrieved 2009-01-27. 
  40. ^ Brian Knowlton, "Geithner Is Pressed for Bailout Details," New York Times February 11, 2009
  41. ^ E. J. Dionne, "Centrism. Meh." The New Republic February 12, 2009
  42. ^ Daly, Corbett B. (2009-03-23). "Nobel laureate Krugman slams Geithner bailout plan". Reuters. http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52M4SS20090323. Retrieved 2009-03-24. 
  43. ^ "Obama’s Ersatz Capitalism". The New York Times. 2009-03-31. http://www.nytimes.com/2009/04/01/opinion/01stiglitz.html. Retrieved 2009-04-02. 
  44. ^ "/ Government Craves Power Over Finance Industry". Government Craves Power Over Finance Industry. 2009-06-18. http://stock-broker-security.com/government-banks-financials /. Retrieved 2009-06-18. 
  45. ^ http://www.washingtonpost.com/wp-dyn/content/article/2009/03/22/AR2009032201606.html
  46. ^ http://online.wsj.com/article/SB123777083390610069.html
  47. ^ "Yang Jiechi Meets with U.S. Secretary of Treasury Geithner". Chinese Ministry of Foreign Affairs. 2009-03-12. http://www.mfa.gov.cn/ce/celt/eng/xwdt/t542442.htm. Retrieved 2009-03-24. 
  48. ^ "Geithner backs strong dlr, says China's assets safe". Rueters. 2009-06-01. 
  49. ^ . Time. 2009-06-01. 
  50. ^ http://www.nytimes.com/1985/06/09/style/carole-m-sonnenfeld-wed-to-t-f-geithner.html
  51. ^ a b "Timothy F. Geithner". About CGD. Washington D.C.: Center for Global Development. 2008. http://www.cgdev.org/section/about/board/geithner. Retrieved November 24, 2008. 

[edit] Further reading

[edit] External links

Political offices
Preceded by
Henry Paulson
United States Secretary of the Treasury
Served Under: Barack Obama

2009 – present
Succeeded by
Incumbent
Civic offices
Preceded by
William McDonough
President of the Federal Reserve Bank of New York
2003 – 2009
Succeeded by
William Dudley
Order of Precedence of the United States of America
Preceded by
David Souter
Retired Associate Justice of the Supreme Court
United States order of precedence
Secretary of the Treasury
Succeeded by
Robert Gates
Secretary of Defense
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Preceded by
Hillary Rodham Clinton
Secretary of State
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Robert Gates
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