By Glenn Somerville and David Lawder
WASHINGTON, Jan 26 (Reuters) - U.S. senators were expected to set aside their misgivings about Timothy Geithner's past income tax errors and confirm the 47-year-old New York Federal Reserve Bank chief as Treasury secretary on Monday night.
With the U.S. economy in full-blown crisis, Geithner's experience in dealing with the past year's rapid-fire rescue efforts of key financial firms will trump the taint from his late payment of $34,000 in self-employment taxes to the Internal Revenue Service that he will command.
Geithner will be President Barack Obama's top economic official for a crisis-management team that is already deeply involved in pushing a big package of spending and tax-cuts through Congress to lift the recession-mired economy.
He also will immediately face the question of whether the new administration should go back to Congress to seek money beyond the Treasury-run $700 billion financial rescue package to sop up bad assets sitting on bank balance sheets, perhaps in a government-run "bad bank."
"On the challenges, they are monumental and extraordinary. But this is going to be more than a one-man show, this is going to be a whole team effort by Treasury and by the administration," said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities.
At a congressional hearing on his nomination last week, Geithner pledged an overhaul of the government's crisis response that would aim to ease the housing crisis, aid consumer credit markets and shore up the banking system.
He also vowed a greater effort to track what banks are doing with the taxpayer-supplied funds that are being bundled out by Treasury. Many lawmakers have complained that banks have not used the funds to increase their lending.
HOLES TO FILL
Geithner's route to Treasury secretary initially appeared all smooth sailing until revelations that he had underpaid taxes for several years while he worked for the International Monetary Fund earlier in the decade.
He apologized for the errors, calling them "careless" but taking some stripes for it from some lawmakers. In the end, the Senate Finance Committee voted 18-5 to recommend the full Senate approve his nomination. A vote is scheduled for 6 p.m. (2300 GMT).
As late as Monday morning, at least some Republican lawmakers were still signaling reserve about Geithner. But even his critics said they were rooting for him to come up with answers to keep recession from spiraling into something worse.
"I am rooting like the devil for him but I don't think he's the right person for the job," Republican Sen. Jim Bunning of Kentucky said on CNBC television.
Geithner has a long-standing familiarity with Treasury. His service there dates back to 1988 when he began a climb upward to under secretary for international affairs from 1998 to 2001 under former Treasury Secretaries Robert Rubin and Lawrence Summers during the Clinton administration.
After stints at the Council on Foreign Relations and the International Monetary Fund, Geithner was named president of the New York Fed in November 2003.
As the head of the New York Fed, Geithner served as vice chairman and a permanent voting member of the U.S. central bank's policy-setting committee. He also had his hand in a series of emergency actions by the Treasury and Fed to rescue failing financial firms. (Editing by Andrea Ricci)