Washington Editor

WASHINGTON - Lawmakers appeared to have bigger fish to fry Thursday rather than grilling Kansas Gov. Kathleen Sebelius about $7,000 worth of mistakes in her tax return filings - the same type of problem that killed former South Dakota Sen. Tom Daschle's prospects of leading the Department of Health and Human Services (HHS).

Sebelius had disclosed Tuesday in a letter to the Senate Finance Committee - the body that has jurisdiction over the confirmation of the HHS secretary cabinet-level job - that an accountant's review of the joint tax returns filed by the Kansas governor and her husband from 2005 to 2007 revealed "unintentional errors" in reporting charitable contributions, mortgage interest and business expenses.

Sebelius and her husband, a federal judge, have resolved the problem by paying $7,040 in back taxes and $878 in interest to the IRS. Daschle's failure to pay taxes involved a much greater amount - more than $140,000 in taxes and interest. (See BioWorld Today, Feb. 3, 2009, and Feb. 4, 2009.)

Sebelius' tax errors came to light after she appeared last Tuesday before the Senate Health, Education, Labor and Pensions (HELP) Committee, where the Kansas Democrat was greeted warmly by lawmakers on both sides of the aisle and underwent few tough questions.

Thursday's hearing of the Senate Finance Committee could have been deemed an almost déjà vu experience, with the governor's testimony nearly identical for both hearings and much of the same topics discussed, including health reform, reimportation, Medicare drug prices, health IT and preventive care.

Even former Kansas Sen. Bob Dole, who was the Republican nominee during the 1996 presidential race, appeared at both hearings on Sebelius' behalf, urging lawmakers to quickly confirm her.

"She's qualified, she has the experience and she has the courage," Dole declared Thursday.

Sebelius, he added, would provide "steady and determined leadership" at HHS.

While nothing was mentioned during Thursday's hearing about Sebelius' tax issues, other than some brief remarks by Sen. Charles Grassley (R-Iowa), the Kansas governor had acknowledged that a couple of stocks in her husband's portfolio were tagged as potential ethics conflicts, and therefore, he would be divesting them, she said.

Sen. Max Baucus (D-Mont.), chairman of the Finance Committee, called Sebelius the type of leader Congress will need at HHS to achieve comprehensive health reform, which the Montana Democrat said was his "number one priority this year."

Having Sebelius at the helm at HHS would ensure that goal was achieved, Baucus said.

"She knows the nuts and bolts of the health care system," he said. As a Democratic governor serving in a mostly Republican state, Sebelius "knows how to reach across the aisle and get things done," Baucus added.

During Thursday's hearing, Baucus seemed most concerned about whether Sebelius had read his November 2008 white paper on health reform.

The secretary-designate acknowledged that she had studied the Baucus plan, calling it "a wonderful roadmap to a health reform strategy."

She noted that many of the components in Baucus' paper were similar to those outlined by Presidents Obama last year while on the campaign trail.

"I think the president is absolutely committed to not only a bipartisan strategy but the notion that to write a health reform bill, he wanted to have a dialogue, engage with Congress and put the pieces together, and as he has said repeatedly, every serious idea should be considered, vetted and put on the table," Sebelius said.

While there may be variations about how best to reach the goal of what is most cost-effective and efficient, the president "is open to all proposals" and "totally committed" to every American having health insurance, she added.

Sen. Mike Enzi (R-Wyo.) expressed concern that the Democrats would attempt to push health reform through Congress using budget reconciliation tactics - a process that would allow lawmakers to cut off debate on legislation with 51 votes, known as a simple majority, avoiding a filibuster by the minority.

He urged Sebelius against supporting such a move, stating that "it is possible" for health reform to be passed under "the regular process."

"I very much not only believe in bipartisanship but would have never gotten elected or gotten anything done without working in a very bipartisan fashion," Sebelius responded. "I share the president's commitment that health reform be a bipartisan approach."

During Thursday's hearing, Grassley, the Finance Committee's ranking member, revealed a new letter from nine FDA scientists, who previously had written to the president about their concerns of retaliation at the agency against those who had blown the whistle on abuses of laws and regulations.

Although the nine FDA scientists said they believed Obama's nominees to lead the FDA - Margaret Hamburg as commissioner and Joshua Sharfstein as deputy commissioner - would bring the necessary change "to guarantee integrity, accountability and transparency to ensure that all future decisions are solely based on science and in accordance with the laws, rules and regulations," the whistleblowers insisted that "sweeping measures are needed to end the systemic corruption and wrongdoing that permeates all levels of FDA and has plagued the agency far too long." (See BioWorld Today, March 16, 2009.)

Sebelius responded that she would enforce decision-making based on scientific evidence and vowed to run an agency that was transparent.

Sen. Pat Roberts (R-Kan.) noted the problems the FDA has had in preventing tainted prescription drugs from entering the U.S. supply chain, including contaminated heparin, and advised Sebelius that, once confirmed, to quickly obtain a security briefing about the dangers such tainted products pose to the nation's security.

He raised concerns that the Obama administration would move too quickly in implementing reimportation of prescription drugs.

"I share your concerns about drug reimportation," Sebelius said. Reimportation would not occur, she pledged, "until I was satisfied" that safety standards had "absolutely been met."