Daschle HHS Confirmation Hits Taxes Snag

This doesn’t sound good . . .

Please, No Daschlegate. Here’s the basics of what hopefully will not become Daschlegate:

President Obama’s pick for health and human services secretary, Tom Daschle, failed to pay more than $128,000 in taxes, partly for free use of a car and driver that had been provided to him by a prominent businessman and Democratic fund-raiser, administration officials said Friday. Mr. Daschle, concluding that he owed the taxes, filed amended returns and paid more than $140,000 in back taxes and interest on Jan. 2, the officials said.

[Snip]

The [Senate Finance Committee report, prepared by staff of both parties] said, “Senator Daschle filed the amended returns voluntarily after Barack Obama announced his intention to nominate the senator to be the secretary of health and human services.”

The committee report said Mr. Daschle had told the committee staff that “in June 2008, something made him think that the car service might be taxable, and he disclosed the arrangement to his accountant.”

“Under Section 132 of the Internal Revenue Code, the value of transportation services provided for personal use must be included in income,” the report said. “Senator Daschle estimated that he used the car and driver 80 percent for personal use and 20 percent for business.”

The car and driver were not Mr. Daschle’s only problems. The Finance Committee said he failed to report consulting income of $83,333 on his 2007 tax return and overstated the deductions to which he was entitled for charitable contributions from 2005 to 2007. In his amended tax returns, he reduced the deductions by $14,963.

And there’s more. For the full NYT story, go here.

On the Critical List. Since I first heard it, I’ve believed that 61 year old former South Dakota Democratic Senator (1987-2005) Tom Daschle was an exceptional choice for HHS Secretary. As Kate Phillips observed at the New York Times The Caucus blog, “If anyone can now navigate the legislative mines, it may well be Mr. Daschle. He certainly knows the territory on the Hill.” And after the disastrous health care reform effort led by Hillary Clinton in President Clinton’s first term, Obama needs someone like Daschle whose 30 years on the Hill as both staffer and Senator will pay high legislative dividends. Daschle, too, knows what it’s like to have been in the minority party of the Senate, and once said, “When you’re in the minority, it doesn’t matter what you’re agenda is, you’re not going to have the degree of freedom that you have as a member of the majority.” This is the kind of experienced and pragmatic partisanship that the President is looking for to push any health care proposals past the GOP – and to enlist some members of his own party, like the Blue Dog Democrats.

President Obama’s cabinet selections have suffered a few setbacks already. His nominee for Commerce Secretary, New Mexico Gov. Bill Richardson withdrew amid a federal investigation into state contracting. His designated attorney general, Etric Holder, Jr. has also not been confirmed, and Treasury Secretary Timothy Geithner had to explain his own tax faux pas. Moreover, the highly partisan and controversial health care policy area would benefit from a smooth and squeaky clean Daschle ascendancy into HHS, but his tax and business problems may prevent that. A spokesperson for Democratic Majority Leader, Harry Reid (D-NV) quickly voiced his support for the nomination, and CNN reported that “White House spokesman Robert Gibbs said that Daschle brought the issues to the committee’s attention himself and that Obama is ‘confident’ he will be confirmed.” Well, Harry Reid office and White House spokespersons say lots of thing . . .

Daschle brings legislative expertise, of course, but he has also developed health care policy expertise. For his basic views on reforming health care, see his article here, or see his book “Critical: What Can We Do About the Health Care Crisis.” For criticism of his approach, see Tom Cannon’s recent National Review Online article, and, interestingly enough, see some Amazon reviewers. [Note that the comparative-effectiveness research proposal that Daschle recommends and Cannon and others criticizes is a provision in the House-passed stimulus plan. I offer a critique of Cannon’s criticism in the comments section of my Wednesday, January 28th posting, The GOP “Elections Have Consequences” Party Votes Unanimously Against Fiscal Stimulus Bill.]

Taxing Us With Their Taxing Problems. It does get tiring to hear of the consistent problems that highly placed people have in paying their taxes, regardless of political party. I know we are a tax averse country, whether with or without representation. Particularly since the Reagan era, most Americans have been as averse to taxes as they are to liver and onion flavored bubble gum. Yet, it always surprises me that people who know they are in the spotlight and know they may be called upon to serve in a position requiring Senate confirmation, as Daschle has surely known for more than a year, would find accountants that demonstrate basic reading and arithmetic skills. I like Daschle very much, always have, but Democrats cannot come bursting into Washington riding high on “change” and then have this kind of thing happen to our best known and brightest. Perhaps, regrettably, President Obama will have to rethink this nomination. Yet, it’s too early for that as The Wall Street Journal reports:

The Senate Finance Committee will hold a closed-door meeting Monday at 5 p.m. to discuss delayed confirmation hearings for former Sen. Tom Daschle as secretary of Health and Human Services and to go over tax and business matters that have held up his confirmation, Finance Committee aides said.

Let’s see if there are any truly principled or rational explanations for what appear to be major tax and business oversights, mistakes, or – hopefully not – worse. Tom Daschle is a good man, but we ran a recent campaign swearing that we would bring only the very best to D.C. Unfortunately, one of my favorites, may be in critical condition.

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