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Daschle Withdraws Over Tax Questions


From the studios of NPR West, this is Day to Day. I'm Alex Cohen. Coming up, the bailout money doled out last year was supposed to increase lending. Still, many banks are having troubles making loans. First, though, Senator Tom Daschle has announced he is withdrawing his bid for secretary of Health and Human Services. That announcement came only hours after Nancy Killefer, President Obama's choice for the chief performance officer position, withdrew her name from consideration. NPR's senior Washington editor Ron Elving is here now with details. Hi, Ron.

RON ELVING: Hello, Alex.

COHEN: So, Senator Tom Daschle had some problems over back taxes, but there were thoughts that these difficulties weren't going to be too much of a problem. What happened?

ELVING: They became more of a problem than either Tom Daschle or Barack Obama foresaw 72 hours ago when they were first coming to light, partly because there was a rising of editorial opinion and public opinion against the nomination because of the tax problems, and partly because, I believe, Tom Daschle's own personal reaction to how all this was received was stronger than he had initially anticipated, and he felt he no longer wished to go forward.

COHEN: Also facing some tax issues, Nancy Killefer, who was slated to fill this newly created position, chief performance officer. What happened there?

ELVING: She decided to withdraw, apparently, also because of a tax controversy which came out a couple of weeks ago, which was on a much smaller scale and involved not paying taxes on a domestic employee. That amounted to about a $900 tax lien on her house, which she satisfied back in 2005. Now, she felt, though, too embarrassed, as someone who was coming in to be in this job of chief performance officer, where she was going to be not just an efficiency expert but, in a sense, a sentinel of the administration's new-hire standards in general. She felt too embarrassed in that position to have had even this much of a peccadillo in terms of her own record. Now, of course, in comparison to that, both the Secretary of Treasury Tim Geithner tax problem, which was in the tens of thousands, much smaller problem than Tom Daschle's, and then, of course, Tom Daschle's $128,000 tax arrearage, those loom much, much larger. So, the question becomes, how much is too much? What begins to suggest either some kind of obtuseness on the part of the nominee or something else going on, something we may not know about yet? And I'm trying to leave that open-ended in terms of the explanation.

COHEN: Ron, does all of this say something about tax laws themselves? Are these liabilities really serious? Or might it be time to maybe make a few tweaks?

ELVING: There's no question but that the tax laws are confusing and difficult, and very few of the kind of people we're talking about for any of these jobs do their own taxes. They have tax accountants. The tax accountants are, of course, trained to minimize the amount of tax that their clients are going to pay. That's, generally speaking, what people pay their tax preparers to do: be legal, be straightforward, be correct, but also, not to pay more tax than is owed. So, they have people doing this work largely for them. They review it, they may consider it, and they may play a major or a minor role in the preparation of their taxes. They also can probably be a little bit confused, if you will, and then decide, well, I'll just err on the side of deciding it's not taxable or that I don't owe that much money. In these cases, there's a lot of gray area, and I think you can raise questions about the judgment of the nominees both for secretary of Treasury and for Health and Human Services.

COHEN: NPR's senior Washington editor Ron Elving. Thank you, Ron.

ELVING: Thank you, Alex. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Alex Cohen is the reporter for NPR's fastest-growing daily news program, Day to Day where she has covered everything from homicides in New Orleans to the controversies swirling around the frosty dessert known as Pinkberry.
Ron Elving is Senior Editor and Correspondent on the Washington Desk for NPR News, where he is frequently heard as a news analyst and writes regularly for NPR.org.