Sunday, February 01, 2009

Tax cheats or honest brokers? On Daschle, Geithner, and Rangel

The past few weeks have come close to being a real fiscal setback for the Obama administration. It turns out that four major Democrats, including two Cabinet appointees (Treasury Secretary Timothy Geithner and HHS Secretary-designate Tom Daschle) and a major House player (Ways and Means Chairman Charlie Rangel), owe or have recently owed back taxes.

My feelings on these mini-scandals vary; I take it case by case: Tom Daschle = easy mistake fuhgetaboutit; Tim Geithner = clueless and avoidable lack of oversight but nothing corrupt; Rangel = why is that arrogant twit still in Congress?

Daschle first. His issue is that he was given a car and driver as a gift at his last job and failed to pay the relevant taxes. I pretty much give him a pass here, for two reasons. One, as Senate Minority and Majority Leader for many years, he was provided a government car and driver. For Daschle, and call it spoiled if you will, having a car and driver you don’t have to think twice about is a natural part of life, just as it is for the President or his Chief of Staff. He’s used to not having to report that part of his life on his taxes, so it would be an easy change in one’s life to not catch. Two, the driver he had at the private equity firm was neither an official part of his compensation package nor a personal employee, so fell into a nebulous category easily forgotten about.

Let us also remember that Daschle has led a long career without giving off so much as a wiff of scandal or hubris. If these unpaid taxes were indeed the result of corruption, it would be a very strange and isolated occurrence. There’s really only thing about this whole thing that bothers me. According to the New York Times,
President Obama’s choice for health secretary, Tom Daschle, was aware as early as last June that he might have to pay back taxes for the use of a car and driver provided by a private equity firm, but did not inform the Obama transition team until weeks after Mr. Obama named him to the health secretary’s post, senior administration officials said Saturday.

Say what now? The transition team has been great about catching these problems before, and other nominees were forthcoming of their own problems. It was the transition that informed Geithner of his issues and former Commerce Secretary-designate Bill Richardson who informed the transition team of his. Why the breakdown with Daschle? I eagerly await the Secretary-designate’s answers to these questions.

(Here’s a separate-but-related side note to keep an eye on that I haven’t seen reported elsewhere. Daschle’s confirmation has to go through the Senate Finance Committee, and it’s well known around Washington – I believe Harry Reid even mentioned it in his book – that Daschle and the Chairman of the Finance Committee, a Montana Democrat whom I interned for last spring, do not get along well at all. There’s no way the Chairman, whose former Chief of Staff is now a White House Deputy Chief of Staff, would try to derail one of Obama’s Cabinet nominees, but I doubt he’s inclined to help make the process any easier for Daschle, either.)

Geithner’s tale is a little different. It sounds like his tax oversights were also honest mistakes, but ones that were made out of stupidity rather than naivety. His neglected total was "just" $42,700 spread out over several years. Now that may be a lot of money to you or me, but for a guy like Geithner, if you’re going to risk your reputation and purposefully cheat on your taxes, you’re going to go for a bigger haul than that. He had also paid $16,000 back before being tapped for Treasury – if he's so corrupt or arrogant, why would he self-identify the problem and pay back even a dime? It also sounds like the mistakes were small ones – he misidentified the type of child care that was deductible but was at least in the ballpark with the deduction, and his family’s nanny was legal at the time that he hired her.

I have other doubts about Geithner as Secretary of the Treasury, even if we do share an alma mater. He was one of the three principal architects of the Bush TARP plan, which we now see lacked the necessary oversight and regulatory force to really change anything on Wall Street. And as for the taxes, this is not the kind of thing you like to see in your tax overlord. It may be a simple mistake that an average Steve shouldn’t get blamed for, but this isn’t the average Steve, it’s the head Steve. But while I have several concerns about Geithner and wonder if he should have been nominated in the first place, corruption is not one of those concerns.

Though I support Daschle and do not consider either him or Geithner true tax “cheats,” Rep. Charlie Rangel is a whole ‘nother story. Rangel, as the head of the House committee that oversees taxes, Medicare, Social Security, and some trade, is a very important figure, and I’ve never cared much for him. His tax and ethical problems are a little older – scandals from last year – but they are ongoing, and I’m inclined to believe that the allegations are true. Read about them here. I'm not prepared to say that Rangel’s behavior stems from personal corruption or moral bankruptcy, but perhaps it grows out of his American Idol–sized ego, and ego is often a source for corruption anyway so are the two really all that different?

I’ve never cared much for Rangel in the first place. Have you ever watched an interview with him on TV? The guy’s as obnoxious as they come. What a buffoon. My feelings about him were confirmed when I worked as a Senate intern and attended conference meetings for the Farm Bill. Since several tax issues were at stake, Rangel, as Chairman of Ways and Means, was a member of the Farm Bill conference committee. During committee meetings he would just rant on and on and say things that made absolutely no sense and belayed a complete lack of understanding of the issues in the bill. Never have I seen so many eyes roll or heard so many annoyed sighs as when I watched the Congressional staffers lining the walls of the room behind their bosses during Rangel’s rants. After the first such meeting, I asked an Agriculture staffer I knew what Rangel had been saying, and he told me, “I have no clue, I wasn’t listening. It’s Charlie Rangel, he doesn’t know anything. The guy's an idiot; I learned that right away.” As the conference proceeded, I learned that Rangel was pretty much Speaker Pelosi’s puppet in those meetings, and that her behavior behind the scenes was even worse. I was told that she didn’t care if a Farm Bill passed or not that year. She would have been just as happy with the Senate getting the blame for a failed process as she would have been passing the House version of the bill. Now mind you, this information is second hand and I’m not about to say which Members these staffers worked for, but it certainly doesn’t speak well of either Rangel or Pelosi. So, when I hear something obnoxious about the former, I’m not exactly disinclined to believe it.

For a take on Daschle and Geithner more similar to my opinion of Rangel, see regular WE commenter Dogwalk Musings.

Oh, and that fourth major Democrat I mentioned? According to President Obama at last night’s Alfalfa Dinner, “The labradoodle we picked has some problems with back taxes.” Some other Alfalfa nuggets, courtesy this morning’s Politico Playbook from Mike Allen:

Chief Justice Roberts absolved himself of the botched oath-giving by offering to swear in Alfalfa's new president, then doing so WITH GIANT CUE CARDS… The President's great unreleased lines:... [To Senator Lieberman] No hard feelings because of the election. My door is always open. Feel free to drop by ANY SATURDAY AFTERNOON. ... [To Gov. Palin] I never expected you to be PALLING AROUND with THIS crowd. I want to congratulate you on your Golden Globe for '30 Rock.' .... [To Vernon Jordan] Just because a guy can give great speeches doesn't mean he's going to be a great president. ... I see Chief Justice Roberts is here to administer my daily oath of office. ... [On the similarity between Cheney and Biden] Dick Cheney is a man of few words. Joe Biden is also vice president.


Dogwalkmusings said...

Thanks for the link! It's always great to read your take on issues since you know many of the players.

I do, however, stand by my opinion. All three individuals you talk about are arrogant and march to a drummer different than the one we ordinary citizens are allowed.

Nathan Empsall said...

Yes, they certainly are held to different standards, but I would make the point that while an average Steve would have hell to pay for little evasions, he also (as a single individual) does less for the country than Daschle (as a single individual) will hopefully do. The average Steve may lack health insurance, or may be paying too much for it; Daschle is the man we are calling on to help him and 45 million others gain that insurance. I can think of few others as well-suited for that challenge as Daschle - do we really want to lessen the chances of finally getting solid health care legislation because one man failed to meet that average standard?

I won't defend Geithner nearly as strenuously, however.

Jordan said...

Is sad that I just don't care anymore? I just want my refund already.

It's great to show that 44 doesn't have 20/20 foresight. But what's the coincidence of all these guys having near the same problem?

Nathan Empsall said...

As far as "44" is concerned, "all these guys" is just the two; Rangel isn't really an Obama person, just a prominent Democrat.

Jordan said...

I like how you put 44 in quotes. It's just easier to type out than anything else. Kind of like W for President George W. Bush (or as I use now 43).

Nathan Empsall said...

I put it in quotes because I always thought of referring to the President by his order numbera as a Bush thing rather than a real thing. I mean, we never talked in their day about Clinton as 42 or Reagan as 40, but then father and son jokingly referred to each other as 41 and 43, and it entered the public conscience and became the thing to do. So, there's nothing wrong with it, I just don't particularly like it - too informal, maybe even crass - and hope it doesn't last (save maybe to distinguish the Bushes since they seem to enjoy it and it doesn't hurt anything).