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Grassley: Nominees are lax on compliance

Many of the president's nominees have had tax troubles.

Senate Finance Committee ranking member Charles Grassley, R-Iowa, took a swipe on Friday at White House and congressional Democrats for not taking nominees' tax troubles seriously enough.

"The bar has definitely been lowered with this administration's nominees, in regard to tax compliance," Grassley said at the outset of a hearing on Treasury Department nominees.

The panel heard testimony from three Treasury nominees at the sparsely attended hearing, including that of Lael Brainard, President Obama's pick for undersecretary of international affairs. Brainard's nomination has been held up for months by the committee's vetting of tax records, which revealed that she and her husband had been late making several payments to the tune of about $1,300.

There were also questions about documents verifying the immigration status of household employees and an in-home office deduction Brainard claimed.

Grassley did not say the issues would hold up Brainard's nomination. But he did express frustration with the pattern he has seen from the Obama administration, including with Treasury Secretary Tim Geithner and former Senate Majority Leader Tom Daschle, D-S.D., who withdrew from consideration as HHS Secretary-designate after it was disclosed he owed over $100,000 in back taxes.

"Prior to this administration, we had never seen nominees with more than $100,000 tax problems, or the inability to accurately respond to committee questionnaires multiple times, or the lack of straight answers from nominees," Grassley said.

"Anyone watching this process closely now knows that a nominee can get away with not paying taxes, or consistently pay them months late, or not follow normal procedures and still be confirmed. All they have to do is blame it on their incompetent accountant, their spouse, or computer software or hardware," he added.

Senate Budget Committee Chairman Kent Conrad, D-N.D., who presided over the hearing while Finance Committee Chairman Max Baucus, D-Mont., was home with his ailing mother in Montana, called the tax discrepancies "troubling." But he noted all taxes and penalties have been paid in full. Conrad told Brainard "no one disputes your talents" and praised her "reputation for honesty and integrity."

Lawmakers pressed the nominees on issues such as tax reform, the swelling federal debt burden and China's currency devaluation, which has fueled the country's export boom and widened the U.S. trade gap. Other Treasury nominees testifying were Mary John Miller to be assistant secretary for financial markets and Charles Collyns to be assistant secretary for international finance.

The panel was also slated to vote on four other nominees: Ellen Murray, to be assistant HHS secretary for resources and technology; Bryan Samuels for HHS commissioner on children, youth and families; Islam Siddiqui for chief agricultural negotiator at the office of the U.S. Trade Representative; and Michael Punke, for ambassador to the World Trade Organization. The holdup means Obama might be without two key trade negotiators at the Nov. 30 WTO ministerial conference in Geneva. But it could not vote on them because a quorum was not present.