Second HHS nominee faces tax problems

Two months after former Senate Majority Leader Tom Daschle saw his nomination for the nation’s top healthcare post scuttled over tax problems, President Obamas’s back-up choice for the same position said on Tuesday that “unintentional errors” were discovered in her tax filings for 2005 through 2007.

Kansas Gov. Kathleen Sebelius, in a letter sent to Senate Finance Committee leaders yesterday, said that she and her husband Gary, a federal magistrate judge in Kansas, had paid $7,040 in back taxes and $878 in interest on a handful of charitable donations, a home loan repayment and other business expenses.

In its own review, the Senate Finance Committee said it had not found any other additional items that needed further clarification.

Sebelius said in the letter that the couple had “immediately corrected” the mistakes, which were discovered by an accountant hired to review their taxes in preparation for her nomination as HHS secretary.

Earlier on Tuesday, the governor had completed her first public hearing in front of members of the Senate Health, Education, Labor and Pensions committee, where she fielded questions about insurance industry reform, Medicare payment rules, information technology, comparative effectiveness and tobacco regulation.

Questions regarding her taxes, however, did not surface during the meeting.

Senate Finance Committee Chairman Max Baucus (D-Mont.), who will chair the governor’s official confirmation hearing on Thursday, issued a statement late yesterday saying that he continues to support the nomination, calling her “the right person for the job.”

“Congress is going to need a strong partner at the Department of Health and Human Services to achieve comprehensive health reform this year, and we have that partner in Gov. Sebelius,” he said. “There is absolutely no doubt in my mind that Gov. Sebelius has the political experience, determination and bipartisan work ethic to get the job done with Congress this year.”

It’s unclear what impact the Sebelius revelation will have on committee Republicans, however. A spokeswoman for Sen. Chuck Grassley, the senior Republican on the committee, said he “generally reserves judgment on nominees until the vetting process, including the nomination hearing, is completed.”

Sebelius is the president’s second pick for the top HHS post. In February, the widely liked Daschle withdrew from consideration after it was disclosed that he had paid $140,000 in back taxes and interest from a consulting job and car services.

Read "Sebelius tells lawmakers of changes to tax returns" for more on this story.

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