The US Senate Finance Committee on Thursday approved Timothy Geithner to head the Treasury Department under President Barack Obama's new administration.
The approval cleared the way for a final vote on Geithner's nomination in the full Senate, expected later in the week.
The Committee approved the nomination on an 18-5 vote. President Obama is hoping for a quick approval by the Senate so that a key position in his cabinet for the planned economic rescue could be filled.
On Wednesday, Geithner appeared before the panel and apologized for what he called "careless mistakes" in failing to pay over 34,000 dollars in income taxes earlier in the decade, when he worked at the International Monetary Fund (IMF).
"I have paid what I owed," Geithner said at the hearing. "I apologize to the committee for putting you in the position of having to spend so much time on these issues."
Geithner paid back taxes and interest for 2003 and 2004 after an Internal Revenue Service audit. While he made the same tax error in 2001 and 2002, he did not pay back taxes for those years until after President Obama expressed interest in nominating him.
In his testimony, as well as written answers to questions from the panel members which were released on Thursday, Geithner said that he favoured a strong dollar and greater financial support to the country's small businesses and struggling families.
"A strong dollar is in America's national interest," said Geithner, who also described President Obama's stimulus plans and financial bailout spending as essential to long-term economic health.
"These are the actions that should allow us to maintain confidence in the long-term strength of the United States economy and the stability of the US financial system," said Geithner, who has been president of the New York Federal Reserve Bank.
He also called for a "fundamental reform" of the government's 700-billion-dollar bailout plan, saying it favoured big financial institutions over small businesses and struggling families.
"Many people believe the programme has allowed too much upside for financial institutions, while doing too little for small business owners, families who are struggling to keep their jobs and make ends meet, and innocent homeowners," he said.
"We have to fundamentally reform this program to ensure that there is enough credit available to support recovery," he added.
He also vowed to take swift actions to get credit flowing again.
"Our test is to act with the strength, speed and care necessary to get our economy back on track, and restore America's faith in our economic future," he said.