WASHINGTON — For more than a year, the Treasury Department has grappled with a monumental global economic crisis while many of its most senior people have had to walk out of internal meetings at critical moments and have been barred from joining in-depth exchanges with foreign governments.

That’s because the appointments of these officials have been blocked at times by various Republican senators. Until now, their reasons for thwarting the Treasury have been largely unknown beyond the halls of Congress.

It turns out, the sources of discontent apparently were not the appointments themselves. In one case it was a tax penalty on small businesses. In another, the passage of an anti-tobacco plan in Canada. Yet another involved a tussle over online gambling.

Efforts by senior Treasury officials to address some of these beefs failed to persuade Republican lawmakers to allow all the nominees to take their posts. That has forced the Obama administration to tackle the economic crisis without top lieutenants at the Treasury who, in particular, oversee policy relating to the U.S. financial system, international affairs and taxes.

Holding-up nominees — more than 80 appointments across the administration remain in limbo — has long been a well-worn tactic on both sides of the aisle. Now it’s souring the mood in Washington, already bitterly divided over massive efforts on health-care legislation and financial regulatory reform.

Political analysts say the holds highlight the dysfunction of the political system. In the Senate, a lawmaker can block a nominee without revealing the reason or even his or her identity.

Treasury Secretary Timothy Geithner has made several attempts to break the logjam to get his staff in place.

Last month, he met with Senate Minority Whip John Kyl, R-Ariz., who had put a hold on about a half dozen Treasury nominees over the issue of on-line gambling.

Kyl, who staunchly opposes online gambling, objected that the Treasury had pushed off implementation for six months of a law that would effectively ban the practice, congressional aides said. The administration had been lobbied hard by the banking industry and lawmakers, who said the law was difficult to implement. Rep. Barney Frank, D-Mass., who leads the House Financial Service Committee, said he led the efforts to postpone the ban, arguing that government should not be telling the public what to do with their money.

When Geithner agreed to no more delays, Kyl lifted his hold.

That deal, however, did not clear the way for the Treasury.

Sen. Jim Bunning, R-Ky. slapped another hold, this time on two of the most senior nominees, as well as two U.S. trade representatives, according to congressional aides from both parties.

Some Senate GOP aides said Bunning wanted to see the Obama administration more vigorously oppose a plan by the Canadian government to ban fruit-flavored cigarettes. The Canadian initiative, which was intended to curb youth smoking, could hurt Kentucky tobacco farmers.

Bunning did not respond to requests for comment.

Kyl and Bunning are not the only ones to have held up the appointments. Sen. Charles Grassley, R-Iowa, put a brief hold on the nominees just before Christmas, to bring attention to a decision by the Internal Revenue Service. He objected to the IRS imposing stiff penalties on small businesses that unknowingly participated in unlawful tax shelter transactions, Grassley’s aides said. He was especially upset that at the same time the agency was offering tax breaks to big, bailed-out banks such as Citigroup.

After Grassley announced his hold, the Treasury immediately sent a letter to his office, saying it would delay imposing the penalties for three months to give the Congress time to amend the tax code, a move that the IRS acknowledged was “highly unusual.”


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