Obama - The First 15 Days

It hasn't been an easy time, but I don't think Barack Obama was expecting it to be. I'm not sure he expected the problems to come from these areas however.

The big news yesterday was the withdrawals of nomination for Health & Human Services Secretary by Tom Daschle and for Chief Performance Officer by Nancy Killefer. This was on the heels of the withdrawal for Commerce Secretary by Bill Richardson and the tax problems that were presented but did not prevent the approval of Timothy
Geithner as Treasury Secretary.

Here is what you need to know about all of this:

Richardson probably should never have been nominated. There is a grand jury investigation into possible pay to play for contracts awarded to the company of a large donor. Even if he is found innocent, this was not an unknown claim. The timing stinks, especially if it turns out Richardson is clean (probable), but this outcome was not at all unexpected.

Geithner probably should have known about his tax underpayments in years previous to the ones he had taken care of. Apparently, there was enough plausible deniability and strong need to have him in place that some Republican senators rolled.

Nancy Killefer is a very interesting story. In one respect, most of us would probably have never heard of her or her position (newly created) had it not been for this problem. Killefer was hit with the previously resolved situation of lack of unemployment compensation taxes paid for household employee. This is different than the Zoe Baird and Kimba Wood nanny tax problems when Bill Clinton was trying to appoint an Attorney General in 1993. (Actually, Kimba Wood did everything correct, but there was a stigma to hiring an undocumented alien, even though it was legal at the time, and she withdrew rather than causing more problems). As far as I can ascertain, Killefer paid the employer taxes for this employee (the employer side of Social Security and Medicare taxes - 7.65% of salary), but didn't pay Unemployment taxes also required of employers. I would guess that more than half of all Americans with household employees are not even aware they also need to pay Unemployment Compensation taxes. The thing that really makes this case interesting is that in 2005, the District of Columbia had filed a $946.69 tax lien on her home. I assume this is because they told her she owed it and she refused or debated whether the nature of the person's employment qualified her as an employee or a contractor. She may have had a legitimate claim, but never, ever, ever let a disagreement get to the point that the municipality puts a tax lien on your home, especially over a relatively small dollar amount.

Daschle - well, this one is tough to swallow. I could see someone not realizing that being given a car and driver is taxable, but not a politician. How does his taxes? Were they not looking at what vehicle he was driving and how much could be deductible for business purposes? That question just had to come up at some point. The consulting income is relatively impossible to miss as reportable income.

Does this look bad for Obama? - you betcha. Is this unique? Not at all. See Clinton's 2 missed attempts to get an AG above. George W. Bush had problems with Bernard Kerik becoming Secretary of Homeland Security and Harriet Miers to the Supreme Court and Linda Chavez as Secretary of Labor.

However, 3 misses with 2 on the same day gets noticed. Initially, Obama was getting rave reviews for the swiftness and quality of his cabinet nominations.

All of the original challenges remain and the Stimulus Bill is getting a lot of resistance and losing some public appeal. If there was any doubt before, there isn't now. The Honeymoon is over.