Per diems are taxable income if you are staying at home. Otherwise, everyone would convert part or all their salary to per diems and be tax free.
If you don't believe me, here is a document from the state of Alaska:
http://fin.admin.state.ak.us/dof/tra...source/tax.pdf
"Per diem and other travel expense payments for most employees are nontaxable. However,
they are only nontaxable as long as the employee is away from their tax home"
And the thing is, it is exactly the same situation as Daschle's. One got a limo and driver to drive to and from work, the other got a per diem to offset living costs.