Obama Administration Rallies Behind Daschle Despite $128,000 Tax Mistake

February 2, 2009 - 5:35 PM
The Obama administration reiterated its support for former Sen. Tom Daschle (D-S.D.) on Monday, amid revelations that its nominee for Health and Human Services secretaryfailed to pay $128,000 in taxes and nearly $12,000 in interest payments.

Former Sen. Tom Daschle (Photo courtesy of U.S. Senate)

White House (CNSNews.com) – The Obama administration reiterated its support for former Sen. Tom Daschle (D-S.D.) on Monday, amid revelations that its nominee for Health and Human Services secretary failed to pay $128,000 in back taxes for a free chauffeur service provided to him.

President Barack Obama on Monday said he was "absolutely" sticking with his choice for health secretary.

Daschle met with the Senate Finance Committee on Monday to explain the situation, and he  gained the support of Committee Chairman Max Baucus (D-Mont.).

"His tax mistakes are regrettable," Baucus was quoted as saying. "But his tax mistakes do not change his qualifications to lead on health care reform. They do not change my support for his nomination."

Daschle was contrite: "It was completely inadvertent, but that's no excuse," he said. "I apologize to President Obama, to my colleagues and to the American people."
 
Some conservatives said while Daschle is to blame for his tax problems, President Obama should be faulted for not vetting his appointees more carefully.
 
“If the President can't enforce his "tougher ethics rules" on his own staff, his personnel problems will only multiply,” said the Family Research Council.
 
But White House Press Secretary Robert Gibbs on Monday defended both the Daschle nomination and the White House vetting process. The vetting process has come under scrutiny following the nomination of Treasury Secretary Timothy Geithner, who had to pay $34,000 in back taxes; and following the withdrawal of New Mexico Gov. Bill Richardson's nomination to run the Commerce Department because of an ongoing corruption probe. 
 
“I don’t think we believe there is any problem with the vetting,” Gibbs said on Monday. 
“The president is not insensitive at all to the reports that are out there but believes Secretary Geithner and Secretary-designate Daschle are the right people for very important jobs, and he does not believe that will undercut their ability to move forward on an agenda that makes sense for the American people,” he added.
 
Daschle answered questions in a closed-door meeting with Senate Finance Committee members Monday after reports that he recently filed amended tax returns to reflect $128,203 in back taxes and $11,964 in interest. 
 
In addition, financial disclosure forms that Daschle filed about a week ago show that he made more than $200,000 in the past two years speaking to members of the health care industry – the industry that President Barack Obama wants Daschle to reform.
 
In the last two years, Daschle made $5.2 million by advising health insurers and hospitals, and energy and telecommunications firms, according to a financial statement filed with the Office of Government Ethics, the Associated Press reported.
 
Daschle said in a letter to the Department of Health and Human Services ethics office that if he is confirmed by the Senate, he will resign as a senior policy adviser at the Washington law firm of Alston and Bird LLP. He reported earnings of more than $2 million from that firm during the last two years.

“Sen. Daschle, our secretary designate, when he’s approved by committee, will follow closely the ethical guidelines and the rules of this administration and won’t deal specifically with those entities,” Gibbs said.
 
Gibbs stressed that this incident should not obscure Daschle’s larger record.
 
“We believe that the committee and the Senate as a whole will examine not just one mistake in a career, but look at that longer three-decade career in public service, serving this country and serving the constituents of South Dakota and across America,” Gibbs said.
 
“The president believes Sen. Daschle is the right person for the very important job of ensuring that we cut costs, reform our health care system, and finally give the American people in health care the outcomes they deserve,” he added.