Wednesday, February 4, 2009

Silly season in Washington

Yesterday's decision by Nancy Killefer to withdraw from consideration as the President Obama's deputy director of the Office of Management and Budget and "Chief Performance Officer" marks a return to silly season in Washington.

Ms. Killefer was eminently qualified for the two positions for which she was nominated. She had previously served in the Clinton administration as the assistant secretary of treasury for management (it's only a hazy memory now, but you may recall that that Treasury Department presided over a budget surplus). More recently, she had served as an executive with the large consulting firm of McKinsey & Co., specializing in management issues for the firm's government clients.

What was Killefer's mistake? She and her husband allegedly failed to pay $298 in unemployment compensation taxes to the District of Columbia in 2003 and 2004 for one or more of their household employees. DC filed a lien against her home in 2005, adding a small amount of interest and $600 as a penalty. She resolved the matter that year. Thus, unlike Timothy Geithner and Thomas Daschle, Ms. Killefer fixed the tax issue when it occurred and not while being considered for a government appointment.

As anyone who has dealt with the District's dysfunctional city bureaucracy can attest, she and her husband deserve considerable benefit of doubt in the matter. However, even if they did make a mistake, a $298 local tax bill that was resolved years earlier should not disqualify someone from taking a pay cut to serve the government.

Yes, there is a principle involved--people should pay their taxes. Moreover, public officials, especially those whose responsibilities include financial management, should be held to high standards. But there also needs to be a sense of perspective. $298, c'mon.

It is no small irony that Ms. Killefer's withdrawal came at nearly the same time that military auditors were testifying about billions of dollars that had been misspent in Iraq and billions more that may be misspent in Afghanistan. It also comes at a time when oversight is needed for the remaining financial bailout, the recovery of billions in Medicare prescription overpayments, the management of a massive (and currently bloated) stimulus package, and the reform of over-extended social insurance programs.