February 6, 2009 / 3:06 PM / 9 years ago

Obama labor secretary-nominee faces tax questions

WASHINGTON (Reuters) - President Barack Obama’s pick for Labor secretary faced questions over her husband’s unpaid business taxes on Thursday, the latest in a string of embarrassing tax revelations that have hampered Obama’s efforts to seat a cabinet.

A Senate panel delayed its vote on Labor Secretary-designate Hilda Solis after the newspaper USA Today reported that her husband paid about $6,400 on Wednesday to settle tax liens that had been outstanding against his business for as long as 16 years.

The Senate Labor Committee’s Democratic chairman and its top Republican made no mention of the USA Today report but said the vote was indefinitely delayed to “allow members additional time to review documentation submitted in support” of Solis, a Democratic member of the House of Representatives from California.

Solis was the fourth member of the new administration to run into trouble over unpaid taxes. Treasury Secretary Timothy Geithner was confirmed by the Senate after paying $34,000 in late self-employment taxes.

Health Secretary-designate Tom Daschle withdrew from consideration this week after paying $140,000 in back taxes and penalties, and Nancy Killefer, Obama’s choice to oversee budget and spending reform, also withdrew over tax issues.

EMBARRASSING DELAYS

The withdrawal of Daschle, a key Obama campaign adviser and former Senate Democratic leader, was particularly difficult and threatened to delay the president’s efforts to reform the costly U.S. healthcare system, one of his campaign pledges.

Obama said “I think I screwed up” over the Daschle nomination by sending a signal that powerful people could fail to pay taxes without serious consequences while ordinary people could not.

The White House indicated Solis was in a different category, with spokesman Robert Gibbs saying she was not involved in her husband’s business and should not be punished for the tax lapse.

“We reviewed her tax returns and her tax returns are in order,” Gibbs said. “She’s not a partner in that business, so we’re not going to penalize her for her husband’s business mistakes.”

Asked if Solis’ husband paid the taxes at the prompting of the White House, Gibbs said: “I think he paid the liens back because he owed the taxes. ... The White House believes that if you owe taxes, you should pay them. But at the same time, this obviously is a business that she’s not a partner in and we’re not going to hold her responsible for.”

In their joint statement, Labor Committee Chairman Ted Kennedy, a Massachusetts Democrat, and the panel’s top Republican, Michael Enzi of Wyoming, indicated Solis might survive the vote.

“Members on both sides of the aisle remain committed to giving her nomination the fair and thorough consideration that she deserves,” they wrote. “We will continue to work together to move this nomination forward as soon as possible.”

John Sweeney, president of the AFL-CIO trade union federation, urged the panel to reschedule her confirmation vote quickly, saying: “It is crucial that the American people have a strong and dynamic Department of Labor. We have confidence that Congresswoman Hilda Solis is the right person to lead that charge.”

Editing by Eric Walsh

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