By Steve Holland
WASHINGTON (Reuters) - President-elect Barack Obama on Tuesday fought new doubts over the nomination of his Treasury secretary pick, Timothy Geithner, amid anguished congressional negotiations over a $350 billion (£241 billion) financial bailout.
The twin troubles emerged for Obama as he attempted to hit the ground running before his inauguration in a week by laying the foundation for an economic stimulus plan that his team says could create as many as 4 million jobs for the struggling U.S. economy.
Geithner ran into problems over a housekeeper who worked briefly for him without proper immigration papers and several years when Geithner did not pay Social Security and Medicare taxes for himself.
The Wall Street Journal said Iowa Sen. Charles Grassley, ranking Republican on the Senate Finance Committee, raised questions about the issue, prompting the normally drama-free Obama team to go into a rare episode of damage control.
Obama's White House spokesman, Robert Gibbs, said in a statement that Geithner had committed honest mistakes that he quickly addressed upon learning of them.
"He 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. We hope that the Senate will confirm him with strong bipartisan support so that he can begin the important work of the country," Gibbs said.
At the same time, Obama used a closed-door lunch with Democratic senators on Capitol Hill to lobby for the second half of a $700 billion financial bailout.
Democrats say they want greater detail and assurances about how the money will be used, after the first half of the package was faulted for an absence of details and for being used to buy stakes in financial lenders and bailing out automakers instead of helping homeowners with mortgage problems.
Connecticut Sen. Joe Lieberman was quoted as saying after the hearing that Obama vowed to veto any attempt to block his own administration's use of the money.
At the same time, Obama's White House budget director-nominee, Peter Orszag, faced some tough questioning at his Senate confirmation hearing about Obama's plans for the $350 billion bailout.
"I think in this era of freshness and transparency, that the new administration would want to come forth with detail instead of this mumbo jumbo that is going on," said Florida Democratic Sen. Bill Nelson.
(additional reporting by Jeremy Pelofsky; editing by David Wiessler)
