He apologised to Congress.

Geithner told the Senate Finance Committee he was sorry that his past transgressions were now an issue in his confirmation at a time of deepening US economic distress.

He urged Congress to act quickly and forcibly to deal with the crisis. A top administration priority is to foster economic recovery and "get credit flowing again," Geithner testified.

Geithner, head of the New York Federal Reserve Bank during the Bush administration, played a key role in establishing a US$700 billion financial bailout package passed by Congress last year.

He is the first Obama Cabinet nominee to run into serious opposition.

As to his failure to pay payroll taxes from 2001 to 2004 while he worked for the International Monetary Fund (IMF), Geithner said: "These were careless mistakes. They were avoidable mistakes.

"But they were unintentional," he said.

Geithner told the panel that, for the 2001 and 2002 tax years, he had prepared his tax returns himself with a popular tax-preparation computer programme.

He said that he hired an accountant to do his 2003 and 2004 taxes who also "did not catch my error".

He acknowledged signing an IMF statement saying he was aware that it was his responsibility to fully pay US Social Security and Medicare taxes.

"I absolutely should have read it more carefully," he said. "I signed it in the mistaken belief I was complying with my obligations."

Senator Charles Grassley, the senior Republican on the panel, noted that as Treasury secretary, Geithner would be in charge of the Internal Revenue Service and should, therefore, come under especially tight scrutiny on the issue of paying his personal taxes.

- AP