Nobody was predicting defeat for Daschle's nomination as secretary of health and human services, but it was proving an unsavory pill to swallow for senators who only last week confirmed Timothy Geithner as treasury secretary despite his separate tax-payment problems. It's an issue that strikes a nerve among lawmakers' constituents who are struggling with their own serious money problems.
On the bright side for Daschle, he got warm words of support from the chairman of the Senate Finance Committee, the panel that will have the first say on his fate. Daschle has been "an invaluable and expert partner" in efforts toward health care reform, said Democrat Max Baucus of Montana - an especially important endorsement since the two men have had tussles in the past over Baucus' handling of GOP tax-cut proposals, Medicare changes and other issues.
Daschle was to meet into the evening with the committee in private.
The former Senate Democratic leader, expressed his remorse in a letter to the Finance Committee, saying he was "deeply embarrassed and disappointed" about what he said was an unintentional failure to pay taxes that he owed. He recently filed amended returns for 2005-07 to report $128,203 in back taxes and $11,964 in interest.
Obama, asked at the White House whether he was standing by his nomination, answered, "Absolutely." He did not elaborate.
In his letter, released Monday, Daschle sought to explain how he overlooked taxes on income for consulting work and the use of a car service. He also deducted more in charitable contributions than he should have.
"I apologize for the errors and profoundly regret that you have had to devote time to them," he told committee members.
White House spokesman Gibbs reiterated Obama's support for the former South Dakota senator and said it would be up to the Senate to weigh a "serious, but corrected mistake against that three-decade career in public service."
"We still think he's the best person to do health care reform and shepherd a very complicated process through Congress to achieve savings and cut costs for the American people," Gibbs said. The White House also had suggested Geithner was indispensable for the national economic revival in arguing for his confirmation despite tax problems.
Daschle was an early supporter of Obama's presidential bid, and several of Daschle's former Capitol Hill staffers went to work for Obama after Daschle lost his re-election bid in 2004.
Daschle filed the amended tax returns after Obama announced he intended to nominate him as secretary of health and human services.
In his apology letter, Daschle provided a timeline for when the errors were discovered and tax payments made. He said that the presidential transition team had flagged charitable contributions it concluded were deducted in error. When his accountant realized amended tax returns would need to be filed, Daschle said, the accountant suggested addressing another matter that Daschle raised with him earlier in the year: whether the use of a car service provided by a friend and business associate, Leo Hindery, should be reported as income.
The unreported income for that car service totaled more than $250,000 over three years.
At about the same time, Hindery's company informed Daschle's accountant of a clerical error it made on a form it provided to Daschle that he subsequently reported to the IRS. The error resulted in an additional $88,333 in unreported consulting income for 2007.
"I disclosed this information to the committee voluntarily,and paid the taxes and any interest owed promptly," Daschle wrote. "My mistakes were unintentional."
On another matter, a financial disclosure form Daschle filed about a week ago showed that he made more than $200,000 in the past two years speaking to members of the health care industry that Obama wants him to reform.
The speaking fees were just a portion of the more than $5.2 million the former senator earned over the past two years as he advised health insurers and hospitals and worked in other industries such as energy and telecommunications, according to a financial statement filed with the Office of Government Ethics.
Among the health care interest groups paying Daschle for speeches were America's Health Insurance Plans, $40,000 for two speeches; CSL Behring, $30,000; the National Association of Boards of Pharmacy, $16,000, and the Principal Life Insurance Co., $15,000.
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