THE BLOG
03/04/2009 05:12 am ET Updated May 25, 2011

Daschle and Geithner: Too Important Not To Be Confirmed?

The old-fashioned Westerns I watched as a kid were simple: good guys vs. bad guys. And if you ever wondered which were which, you just had to look at their hats.

George W. Bush, never managed to grow up past that kind of thinking. There were white hat countries and black hat countries -- with us or against us. A professor of ethics wrote a book about him called "The President of Good and Evil."

Real life, of course, is rarely that simple. Bush is out and Obama is in, but some of the good guys we desperately hope will make everything better are starting, inevitably, to disappoint us. Take Tom Daschle and Tim Geithner.

Daschle is the model of a model politician: clean-cut, well-spoken and smart. And so popular that he was voted Democratic leader in 1994 - eight years after he was first elected to the Senate. Only LBJ had served less time before being chosen party leader. Since losing in 2004, Daschle has made more than $5 million as a lawyer, lobbyist and advisor to a private equity firm.

Suddenly, we learn, Daschle has a problem. It's caused him to pay $140,000 in back taxes and interest since Barack Obama said he wanted Daschle to be Secretary of Health, Education and Welfare. The back payments cover 2005 through 2007, partly for Daschle's free use of a car and driver provided by the equity firm. It's a perk Daschle didn't bother to tell the IRS before, but now estimates as worth $182,250.

The same company paid Daschle an even million dollars in 2007, $83,333 a month. But, although he got paid for 12 months, his payment for May was left out of the annual income statement the firm sent him. So Daschle never reported it to the IRS.

Daschle's spokeswoman blames the company for "a clerical error." But how likely is it that the former Senator didn't notice that instead of an even $1 million from the firm, he was reporting $917,667? In addition, the Daschles corrected an overstatement of almost $15,000 in their charitable contributions over three years.

An administration official says it was all "a stupid mistake" that Daschle discovered, paid for, and told the Senate Finance Committee about. But a Republican committee staffer says it will have to be thoroughly examined. The White House and Senate Majority Leader Harry Reid predict it won't stop Daschle's confirmation.

Tim Geithner has already been confirmed as Treasury Secretary. This, despite a different tax problem. One that cost him a total of $42,700 in back taxes and interest, including almost $26,000 he'd never have paid if Obama hadn't nominated him.

A little background: before being named to head Treasury, Geithner was president of the Federal Reserve Bank of New York, and before that spent more than two years as an executive of the International Monetary Fund.

That's where his tax problems arose. As an international organization, the IMF does not withhold federal and state taxes from its American employees' paychecks. Nor does it deduct their Social Security taxes (including Medicare).

Instead, the Monetary Fund pays the Americans extra money, roughly enough to cover the federal and state taxes, and the employer's half of the Social Security tax. With no withholding, IMF employees are responsible for paying their federal and state taxes quarterly. They are also responsible for quarterly Social Security payments, half the money provided by the IMF, the other half chipped in by the employee, the same way it's divided between American firms and their workers.

Geithner worked for the IMF from 2001 thru 2003, and also got some payments from them in 2004. Two years later, he was audited by the Internal Revenue Service, which found that he had failed to pay any of his Social Security taxes in 2003 and again in 2004 - either the half the IMF had paid him in advance, or the half he was supposed to put up himself. The IRS socked him for almost $15,000 in back taxes plus $1,885 in interest.

Geithner also hadn't paid $19,176 Social Security taxes on his IMF earnings for 2001 and 2002. But the IRS did not audit him for those years because the statute of limitations had run out. Surely, his audit reminded him that he also owed taxes for the other two years -- but he wasn't required to pay them and didn't -- until after Obama picked him for Treasury. Only then did he come up with the additional $19,176 - plus $6,794 interest.

Geithner apologized to Congress for what he called "unintentional...careless mistakes," that neither he, nor his software program nor his accountant managed to catch. But he acknowledged signing an IMF statement saying he was responsible for paying those taxes. And the Senate Finance Committee produced IMF documents U.S. employees got with detailed explanations of their tax obligations.

One blogger posed the best question for Daschle or Geithner: "If you weren't nominated, would you ever have paid this tax'?"

To me the answer is clearly NO. That's too bad. People in high places ought to pay their taxes, to set an example for the rest of us. Especially the Treasury Secretary, who oversees the IRS. Moreover, both men's problems are far more serious than those that torpedoed some past nominees.

Bill Clinton's first two choices for Attorney General--Zoe Baird and Kimba Wood-- were dumped after disclosures they'd hired illegal immigrants. And George W. Bush's first choice as Labor Secretary, Linda Chavez, withdrew after revelations she gave money and a home to an illegal immigrant.

Even so, maybe Daschle should be approved. And perhaps Geithner's confirmation was appropriate. After all, Senator Reid's spokesman described Daschle as "the best person to help reform health care in this country." And Republican Senator Charles Grassley, who voted against Geithner, said many others in Congress think he's "possibly the only man for the job of healing the recession" and "a very fractured economy."

It reminds me of the argument that some financial institutions are too big to fail in spite of their blunders and/or wrongdoings. Maybe some people, like Daschle and Geithner, are too important NOT to be confirmed, at least given the extent of their particular mistakes or sins, relative to the needs of the country. Or maybe not.