Capitol Hill's New Role of Tax Collector

Emmett Tyrrell
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Posted: Apr 02, 2009 12:01 AM
Capitol Hill's New Role of Tax Collector

WASHINGTON -- It has happened again! Another Obama nominee has admitted to tax problems. Health and Human Services nominee Kathleen Sebelius has admitted to irregularities in her tax returns extending over the past three years. She has made good by sending off a check for $7,000. Sebelius claims that problems were discovered by her accountant as she prepared for her confirmation hearings and that the debt was the consequence of "unintentional errors." Incidentally, when she was committing those errors, she was governor of Kansas.

According to my calculations, that makes five Obama nominees who have reported similar tax irregularities, none of which was discovered until the nominees began making preparations for their confirmation hearings. Others who have benefited the U.S. Treasury by submitting to confirmation hearings include former New York Fed President Timothy Geithner and former Dallas Mayor Ron Kirk. Geithner discovered that he owed the government $34,000 and paid promptly. He is now secretary of treasury. Kirk discovered that he owed nearly $10,000 and presumably also paid promptly, for on March 18, he was confirmed as U.S. trade representative.

Two other Obama administration nominees withdrew from consideration when their tax problems were discovered. They are Nancy Killefer -- who was nominated to be chief performance officer, or White House performance czar, before it was discovered that there was a $946 lien on her house for her failure to pay unemployment compensation tax on household help -- and, of course, former Senate Democratic leader Tom Daschle, who withdrew his nomination to head Health and Human Services after it was discovered that he owed $140,000 in taxes and interest. Daschle also became a millionaire while serving as one of Washington's hated lobbyists. The Obama administration is highly critical of lobbyists and also of millionaires.

All of this suggests that the Internal Revenue Service may have hit on a novel way to get tax cheats to pay up: nominate them to high government service.

Given President Barack Obama's pledge to reform government, it is somewhat surprising to read of all these tax cheats among his nominees. On the other hand, the fact that so many high-level Democrats fail to pay their taxes might explain why they are such staunch advocates of raising taxes. They themselves do not pay them until they face confirmation hearings. Not that tax irregularities were the only problem faced by an Obama nominee. There was the former Democratic presidential candidate who decided to withdraw his nomination for secretary of commerce when someone told him that his pending grand jury investigation might not look good during his confirmation hearings. That would be Bill Richardson, who is the governor of New Mexico and was ambassador to the United Nations during the Clinton administration. You might recall that during the Clinton High Jinks, Ambassador Richardson served as headhunter (if that is the right term) for the curvaceous Monica Lewinsky when the heat was on.

Ethics may yet become an issue with the Obama administration, which, like the Clinton administration, came to Washington promising an administration of unparalleled ethical purity. The $410 billion omnibus spending bill is a cornucopia for graft. The $787 billion stimulus bill is yet another cornucopia for graft. Then there is the problem recently editorialized upon by The Wall Street Journal.

It appears that the Treasury Department's plan for toxic-asset purchases is going to be limited to a handful of huge companies bidding on the toxic assets and managing them. The Journal was too polite to bring up the term "crony capitalism," but it did speak of the possibility that these few firms will reap huge profits in a toxic-asset purchase plan that might be of only limited effect. "We have no idea if Treasury is playing favorites," the Journal editorialized, "but it certainly doesn't look good. All the more so given that some of these big players may have consulted informally with the Obama Administration as it was writing the plan."

What might be done to vet this plan? Perhaps it could be sent up to Capitol Hill for a confirmation hearing. We have already seen the Hill's hygienic effect on Obama nominees.