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Timothy Geithner was sworn in as U.S. Treasury secretary, putting him at the center of a global effort to arrest the financial crisis and end what is already the nation's longest recession in a quarter-century.

The Senate voted 60-34 in his favor, the closest post-World War II margin for a Treasury secretary, after two hours of debate. Geithner, 47, overcame opposition from Republicans who objected that he underpaid federal taxes in previous years. Four Democrats also voted against him.

Geithner, who had been president of the Federal Reserve Bank of New York since 2003, inherits the worst economy in decades, a record budget deficit and a financial system reeling from $1 trillion in writedowns and losses. William Dudley, the New York Fed's markets director, is the leading contender to succeed him, according to people familiar with the deliberations.

“His work and the work of the entire Treasury must begin at once,” President Barack Obama said yesterday at Geithner's swearing-in ceremony in Washington. “We cannot lose a day because every day the economic picture is darkening.”

Geithner assumed his post on a day when companies from Caterpillar Inc. and Sprint Nextel Corp. to Home Depot Inc. announced plans to cut at least 61,000 jobs as sales withered and construction slowed amid the global economic decline.

The confirmation opens the way for the New York Fed to name a new president of the central bank's main liaison with Wall Street. An announcement may come as soon as today. Dudley, 56, is a former Goldman Sachs Group Inc. economist who joined the Fed in 2007.

Crisis Agenda

Geithner's tasks include persuading Congress to pass an $825 billion fiscal stimulus proposal, managing the second half of a $700 billion bank rescue program and weighing a slate of proposals to stabilize the financial system and pull the economy out of a 13-month recession.

“We are at a moment of maximum challenge for our economy and our country,” Geithner said in a statement at yesterday's ceremony, held in the Treasury's Cash Room. “Our agenda is to move quickly to help you do what the country asked you to do,” he said, addressing Obama.

Yesterday's Senate vote was closer than anticipated; the tally last week in the Senate Finance Committee was 18 to 5. In his confirmation hearing before the finance panel, Geithner was grilled on his failure to pay almost $50,000 in taxes. He accepted responsibility, saying his errors were “careless” and unintentional.

'Difficult Issue'

“In another time and another place this probably would have been a far more difficult issue for him to get over,” said Kevin Petrasic, a former congressional staffer who is now an attorney at Paul, Hastings, Janofsky & Walker, a law firm in Washington. Lawmakers “had to really think hard before deciding that somebody with his credentials was not the type of person we needed” during a financial crisis.

Nevertheless, the tax errors that prompted at least some of the votes against him will reduce his effectiveness, said Peter Wallison, who was Treasury general counsel under President Ronald Reagan and is now a fellow at the American Enterprise Institute in Washington.

“He just won't carry the same moral authority,” said Wallison low fee payday loans.

Senate Majority Leader Harry Reid said during the debate before the vote that Geithner has “seen the crisis unfold” and is “uniquely suited to know the difference between what has worked and what has failed.”

Strategy Soon

Geithner will announce the administration's strategy for stabilizing financial firms “soon” after Senate confirmation, Lawrence Summers, director of the White House's National Economic Council, said two days ago.

“He will be laying out the plans and principles behind our approach,” Summers said on NBC's “Meet the Press” program.

Obama is pressing for speedy passage of a stimulus plan to cut taxes, spend more on public works and preserve or create as many as 4 million jobs.

The U.S. unemployment rate in December soared close to a 16- year high of 7.2 percent; the budget gap is forecast to exceed $1 trillion even without the stimulus; and the Dow Jones Industrial Average lost 33.8 percent in 2008, the steepest annual drop since 1931.

In his written responses to lawmakers last week, Geithner said there were “no current plans” to request more financial- bailout funds, and he played down any need to nationalize U.S. banks, without specifically ruling out the option.

'Arsenal of Tools'

“The Obama administration is committed to using the full arsenal of tools available to get credit flowing again to families and businesses,” Geithner said. “We will ensure that support under this program is directed at making credit available to support recovery.”

Geithner also has affirmed the U.S. “strong dollar” policy.

“A strong dollar is in America's national interest,” he said last week. “Maintaining confidence in the long-term strength of the United States economy and the stability of the U.S. financial system is good for America as well as our trading and investing partners.”

He said the Obama administration believes China is “manipulating” its currency, a harsher tone than the Bush administration took with the country that's the biggest foreign purchaser of U.S. Treasuries.

Shrinking Economy

Gross domestic product probably contracted at a 5.5 percent annual rate from October through December, the biggest drop since 1982, according to the median estimate in a Bloomberg News survey ahead of Commerce Department figures due Jan. 30.

“The challenges facing this new administration are formidable,” Finance Committee Chairman Max Baucus, a Democrat from Montana, said at last week's hearing. “Our new president needs to have his Treasury secretary in place to help address these challenges.”

Before the vote on Geithner, seven of the 23 Treasury secretary nominees since 1945 had been considered under Senate roll-call tallies in which lawmakers' individual votes are recorded, according to research from the Senate Historical Office. The average margin of support for those seven was 95-1. The rest were approved under procedures that allow for confirmation without an official vote count.

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