Tax Errors and Bailout Gaffes: Is Tim Geithner the Right Man to Run Treasury?

Geithner's "nanny gate" issues are seen as relatively minor, a technicality. The same cannot be said of his failure to pay self-employment taxes while employed at the IMF, which reportedly tells its U.S. employees emphatically that they need to cover Social Security and Medicare levies themselves.

In 2006, after the IRS raised the issue, Geithner paid over $17,000 to cover back taxes and associated fees for 2003-2004. However, Geithner did not pay back taxes and fees for 2001-2002 - of about $26,000 - until November 2008, after he was nominated by Obama to be Treasury Secretary.

At this juncture, Geithner reportedly retains the backing of both Obama and key Democrats on the Senate Finance Committee. The hearing has been postponed until Jan. 21 but Committee Chairman Max Baucus said Timothy Geithner “clearly” will be confirmed, Bloomberg reports.

"But the affair leaves three questions that Geithner must answer before Senators confirm his position," writes Rob Cox of Breakingviews.com:

• Why didn't he get his taxes right in the first place?
• Why he realized he screwed up in 2003 and 2004, why didn't he cotton to the relevance of his error for the previous two years.
• Why wait until you are about to be confirmed as Treasury secretary to raise a transgression that, albeit modest in financial scope, is certainly germane to the position as ultimate overseer of the tax authority?

The bigger question is whether Geithner really is the "right" man for the job. As President of the New York Fed he's been intimately involved in all the major bailout decision of the past year. And since the NY Fed is a private institution owned by its member banks and led by a board comprised of major corporate CEOs and financial luminaries, perhaps the real question is this: If Wall Street is so gung-ho about Geithner for Treasury, is that really so good for the rest of us?