The Treasury has started handing out bailout money again

It seems the Treasury has taken a lesson from some payday advance loans companies. Just as PersonalMoneyStore.com lets you know upfront what the fees, limits and regulations are on payday advance loans, the Treasury seems to be making good on its promise of transparency.

Today the Treasury Department shared with the public the amount of bailout money it distributed and how many financial institutions received financial aid. The Treasury distributed $386 million to 23 banks.

Times, they are a-changin’

The awards are the first that the Treasury has given since Congress allowed President Barack Obama access to the funds. Many lawmakers on both sides of the political aisle were disgruntled by the Bush administration’s handling of the funds. There were widespread complaints that there wasn’t enough accountability from the Treasury and leaders, let alone taxpayers, couldn’t figure out where the money had gone.

The Treasury appears to have changed its tune. It reported today that it gave $111 million to 1st Source Corp. in South Bend, Indiana. Also, it spent $194.2 million on buying bank stock in order to encourage banks to resume normal lending patterns. It’s too bad they can’t just give the money directly to taxpayers instead of having the banks lend it to them. But don’t despair, at least you can get payday advance loans when you need a bailout.

Shaking things up from Day One

Timothy Geithner

Today was Treasury Secretary Timothy Geithner’s first day in office, and he has already put rules in place to prohibit lobbyists from influencing the bailout. He is also requiring officials operating the rescue fund to report the process they went through to make their decisions. For instance, officials will have to write up how they came to the conclusion that 1st Source should get $111 million.

Here at your payday advance loans source, I’ll keep my eye out for more news on how the bailout money is being spent.

President Barack Obama recently nominated Geithner for the position. The Obama team is defending Geithner, saying the tax discrepancies were “an honest mistake.”

The errors

Because the IMF is an international organization, it does not withhold employees’ wages for Social Security and Medicare. But those employees are responsible for paying those taxes on their own. Just as payday loan recipients are responsible for paying their loans back.

The Senate Finance Committee’s official statement says he “failed to pay self-employment taxes for money he received while he working for the International Monetary Fund.” The IRS found errors in 2006 when they audited Geithner for 2003 and 2004, for which he owed $16, 732 in taxes and interest.

Geithner’s response

After the 2006 audit, Geithner promptly paid the amount owed in full. After Obama nominated him for the Treasury Secretary position, he voluntarily amended his 2001 and 2002 taxes. He found that he owed $25,970 in taxes and interest and paid that amount in full.

Obama spokesman Robert Gibbs says that Geithner’s errors are a common mistake. Geithner discussed his tax mistakes with the Senate finance committee, and he said the errors were unintentional. He also emphasized the fact that he repaid the full amount of taxes and interest that he owed.

Support and dissent

Democrats are fully supporting Obama’s nomination of Geithner.

“He’s the right person to help lead our economic recovery during these challenging times,” Gibbs said.

Republicans have not specifically said that they believe his tax errors should prevent Geithner from being appointed. However, at least one Republican Senator objected to holding the nomination hearing on its originally scheduled date, Friday. The hearing is currently scheduled for Jan. 21.

The numbers game

The consensus among both parties seems to be that Geithner made an honest mistake. He’s human, after all. Messing up on his tax forms doesn’t make him a bad person or a dishonest person. I’m sure most of us have done the same thing.

So if average Americans can mess up on their taxes and then simply be forgiven if they pay it back, should Geithner receive the same courtesy? Well, I just have one thing to point out. The average American is not in charge of the entire nation’s money. I’d be lying if I didn’t say I was concerned that the would-be Treasury Secretary doesn’t know the nation’s tax laws.

Room for growth

In his defense, the errors happened several years ago. He was intelligent enough recently to re-do his own taxes and discover the amount he owed on his own. To me, that shows he is good with numbers. It also shows that he believes in doing the right thing. He could have saved 25 grand, but instead he basically turned himself in.

It is disconcerting that the possible future Treasury Secretary has had problems with money and numbers. However, it is possible that he has learned from his mistakes and grown as a politician and an itellectual since then.

What about that other thing?

Those of you who have already read the news reports about Geithner know there is another issue being discussed. For a short time, Geithner’s housekeeper, an immigrant, worked for him after her work eligibility had expired.

To me, this is a non-issue as far as Geithner’s appointment is concerned. The woman he employed was married to an American citizen, and thus should have been considered a citizen herself. I don’t think this is an issue of whether Geithner made a mistake, it’s an issue of flaws in immigration policy. And that is all I have to say about that.

You decide

What do you think? Should Geithner be appointed? You can leave your comments here on your payday loan source’s Money Blog.