Labor Secretary-designate Hilda L. Solis on Thursday became the fourth senior administration nominee in a month to see their Senate confirmation slowed or scuttled over problems with their taxes.
A Senate committee abruptly canceled a confirmation vote on Ms. Solis after news reports that her husband, Sam Sayyad, had 15 outstanding state and county tax liens placed on his Los Angeles auto repair shop.
The White House said that Mr. Sayyad and his wife were unaware of the liens and that Mr. Sayyad had paid the county $6,400 on Wednesday to settle the debt.
However, the revelation compounded the political damage done by the failed nominations of former Sen. Tom Daschle to be secretary of health and human services and of Nancy Killefer to be “chief performance officer” in the White House budget office, both because of tax problems.
Treasury Secretary Timothy Geithner was belatedly confirmed last month after contentious hearings prompted by revelations that he had failed to pay self-employment taxes while working for the International Monetary Fund.
The problems are not limited to Obama appointees.
Al Franken, whose narrow election as senator from Minnesota is being challenged in court by Republican Norm Coleman, was slapped with $25,000 in penalties for failing to pay workers’ compensation for the company he established in New York. He also had to pay $70,000 in back taxes and penalties to 17 states, where he earned income between 2003 and 2006.
Mr. Franken has claimed that he paid taxes on all of his income to Minnesota and New York, where he lived. He said he is due tax refunds of $50,000 from those states.
The spate of tax problems, recalling similar issues with nominees in the past two administrations, has raised questions whether the U.S. tax code is so complex that even Washington insiders and their highly paid accountants cannot navigate the rules.
“The only indictment coming out of these … cases is our complex tax system,” said Pete Sepp, vice president for policy and communication for the National Taxpayers Union.
However, not every critic of the tax code is buying that as an excuse.
“Politicians like Tom Daschle who complain the reason they did not pay more than $100,000 in taxes is because the tax code is complex would have a stronger case if they weren’t the very people who enacted the complex tax code,” said Grover Norquist, president of Americans for Tax Reform.
“Daschle opposed every effort to simplify the tax code and to reduce tax burdens his entire career,” Mr. Norquist said.
Robert Carroll, vice president for economic policy at the Tax Foundation and a former Treasury official in the Bush administration, said he found it “interesting and a bit ironic” that Mr. Geithner and Mr. Daschle “blamed their problems either explicitly or implicitly on the complexity of the tax code.”
White House spokesman Robert Gibbs said President Obama remained firmly behind Ms. Solis, one of three Cabinet picks yet to be confirmed by the Senate.
“She’s not a partner in her husband’s business,” Mr. Gibbs said. “We’re not going to penalize her for her husband’s business mistakes.”
Senate Health, Education, Labor and Pensions Committee Chairman Edward M. Kennedy, Massachusetts Democrat, and Sen. Michael B. Enzi of Wyoming, the panel’s ranking Republican, said Ms. Solis’ hearing was postponed “to allow members additional time to review the documentation” submitted in support of her nomination.
“There are no holds on her nomination and members of both sides of the aisle remain committed to giving her nomination the fair and thorough consideration that she deserves,” they said in a joint statement.
With each of the four Obama nominees, the unpaid taxes involved elements of the tax code seldom encountered by the majority of Americans.
Mr. Daschle, who had failed to pay income taxes on three years of limousine service worth $255,000, has said that it did not occur to him until June 2008 that his car and driver might be taxable income.
He also had tax problems involving $15,000 in charitable contributions and a one-month consulting stipend of $83,333. Altogether, he paid more than $140,000 in taxes and interest to the IRS on Jan. 2, three weeks after he was nominated. And he still may owe the 2.9 percent Medicare tax on the limousine service.
“As a former senator, he should have been keenly aware of gift rules,” said Mr. Sepp of the National Taxpayers Union. “People who run in the same circles as lobbyists should be sensitive to gift rules.”
“Daschle’s been around the block a few times, and he clearly thought he could sneak through,” said Linda Chavez, who withdrew her own nomination to be secretary of labor in 2001 after questions were raised about an estimated $1,500 she had given over two years to an illegal immigrant who lived in her home. Ms. Chavez said she had taken the woman into her home to help her escape an abusive relationship.
Ms. Chavez noted that Mr. Daschle’s $128,000 in unpaid taxes represents about twice the median household income for a family of four in the United States.
“It’s one thing to have Republicans angry,” Ms. Chavez said, “but liberals were asking why he was being paid $1 million a year by a law firm when he wasn’t a lawyer. The liberal base was feeling squeamish about how he acquired his newfound wealth.”
Mr. Geithner did not pay Social Security and Medicare taxes for 2001 and 2002 until last fall, shortly before he was nominated. He had signed numerous statements during his 2001-04 tenure at the International Monetary Fund declaring that he understood his obligation to pay those payroll taxes directly to the U.S. government. The IMF even gave him the funds to make the payments.
After being audited in 2006, Mr. Geithner paid the back taxes for 2003 and 2004.
Mrs. Killefer, a former Treasury official in the Clinton administration, withdrew her nomination to be deputy director and chief performance officer at the White House Office of Management and Budget because a lien had once been placed against her home for failure to pay taxes on household help.
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