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White House budget pick Mulvaney took hard stance on taxes in past

Story highlights
  • Mulvaney has disclosed failing to pay more than $15,000 in taxes on a household employee
  • Confirmation hearings for the Republican are Tuesday

Washington(CNN) Rep. Mick Mulvaney throughout his legislative career took a hard line on unpaid taxes for government employees and officials -- a backdrop to his own tax issue as he prepares for his Tuesday confirmation hearing.

Both in his time as a state lawmaker and in Congress, the South Carolina Republican has supported four different pieces of legislation that barred either government employees or public servants from serving in their roles if they had any outstanding tax debts or liens.

That stands in contrast with the situation Mulvaney now finds himself in: He disclosed to a Senate committee that he had owed more than $15,000 in unpaid taxes on a household employee.

In his case, Mulvaney brought the issue to the committee's attention and said he had not discovered the problem until recently.

"Upon discovery of that shortfall, I paid the federal taxes," Mulvaney said in the Budget Committee questionnaire, adding that the relevant penalties and interest, as well as state taxes, "are not yet determined."

Schumer: Mulvaney disqualified by tax issue

The White House did not immediately respond to a request for comment, and neither did the top Republicans on the Budget and Homeland Security and Governmental Affairs committees that will both hold hearings on Mulvaney on Tuesday.

A source on the Trump transition told CNN when the issue first came up that the employee was a "sitter" for Mulvaney's triplets, and he was not aware he needed to pay taxes on her income.

"He was shown paperwork at the time that indicated she was here in the US legally and could work," the source told CNN. "This mistake was made as he brought home newborn triplets from the NICU and was trying to get some help for his family."

Since Mulvaney's unpaid taxes came to light, Democrats have called for him to withdraw for consideration, saying that similar issues have derailed past nominees including President Barack Obama's Health and Human Services choice Tom Daschle.

Mulvaney has not indicated he will step down, but in the past, the fiscal hawk has drawn a hard line on paying taxes.

He voted in favor of a bill in 2015 -- along with almost all of his Republican colleagues in the House -- that would have mandated that "any individual who has a seriously delinquent tax debt shall be ineligible to be appointed or to continue serving as an employee" of the federal government.

The bill failed to reach the two-thirds threshold it needed to pass the House procedurally.

Can Trump and his budget director get on the same page

But it wasn't the first time Mulvaney took such a position. In the South Carolina state Senate in 2009, Mulvaney co-sponsored a trio of bills with the same goal.

One applied to state legislators, one to state elected officials and one to state nominees. In each case, the official would be prohibited from running or serving unless they "during the previous 10 years, annually filed all required federal and state income tax returns, regardless of the source of income, paid all income taxes due during that time period, and satisfied all judgments, liens, or other penalties for failure to pay income taxes when due."

When the tax issue came to light, a transition spokesman said that Mulvaney was handling the situation appropriately.

"The fact of the matter is that nobody is more qualified and more prepared to fight to rein in Washington spending and fight for taxpayers than Mick Mulvaney," transition spokesman John Czwartacki said in a statement. "Congressman Mulvaney raised the issue surrounding the care of his premature triplets immediately upon being tapped for this position, and has taken the appropriate follow-up measures."

CNN's Manu Raju and Deirdre Walsh contributed to this report.
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