- The Washington Times - Tuesday, February 3, 2009

UPDATED:

Former Sen. Tom Daschle is withdrawing from his nomination to be Health and Human Services secretary, the White House announced Tuesday amid the former Democratic leader’s tax problems.

President Obama said in a statement that Mr. Daschle, who had to pay nearly $130,000 in back taxes and interest for failing to report a gift of a private car and driver as income, asked Tuesday morning to be withdrawn.

“I accept his decision with sadness and regret,” the president said in a statement.

Obama aides said Mr. Daschle also will not serve in the role of health care czar, a nonconfirmable post that would have allowed him to shape policy from within the White House.

The move comes less than a day after Mr. Daschle said he would move forward and Democratic senators came to his defense, saying the tax issue was an honest mistake.

“Tom made a mistake, which he has openly acknowledged. He has not excused it, nor do I. But that mistake, and this decision, cannot diminish the many contributions Tom has made to this country, from his years in the military to his decades of public service,” Mr. Obama said.

Mr. Daschle, who lost his bid for re-election as a senator from South Dakota in 2004, said he refused to be a “distraction” from the task of reforming health care.

“If 30 years of exposure to the challenges inherent in our system has taught me anything, it has taught me that this work will require a leader who can operate with the full faith of Congress and the American people, and without distraction,” Mr. Daschle said in a statement. “Right now, I am not that leader, and will not be a distraction.”

Mr. Daschle was an early Obama supporter and loyal surrogate on the campaign trail for nearly two years.

The announcement, delivered via a paper statement by a White House press aide, was the second bit of bad news for Mr. Obama on Tuesday.

Earlier in the day, Nancy Killefer, Mr. Obama’s choice for the new position of chief performance officer, also withdrew from consideration because of tax issues.

She said in a letter to Mr. Obama she had a “personal tax issue of D.C. Unemployment tax,” and also said she worried that would be a distraction.

She reportedly had a $900 tax lien placed on her home in 2005 by the District of Columbia.

Ms. Killefer would have been assigned to the Office of Management and Budget to lead what was called a SWAT team to streamline the government and cut government waste.

Ms. Killefer wrote Mr. Obama a letter, released by the White House on Tuesday morning, to “reluctantly ask you to withdraw my name from consideration.”

“I recognize that your agenda and the duties facing your Chief Performance Officer are urgent,” she wrote.

She and Mr. Daschle join New Mexico Gov. Bill Richardson as nominees who have withdrawn following a relatively smooth transition.

Mr. Richardson was the president’s first choice for secretary of commerce, but Mr. Richardson pulled his name from consideration because of an ongoing ethics investigation in his home state.

Treasury Secretary Timothy F. Geithner was confirmed despite his problem with back taxes.

Mr. Obama nominated Sen. Judd Gregg, New Hampshire Republican, to be commerce secretary on Tuesday morning, and also announced Iraq veteran Tammy Duckworth will be assistant secretary for veterans affairs.

Mr. Obama announced the Gregg nomination in the White House Grand Foyer, calling his former Senate colleague “famous, or infamous, for his strict fiscal discipline.”

He said that while they disagree on some matters, even the outcome of the 2008 election, they agree on the “urgent need” for economic action amid the recession.

Mr. Gregg, who thanked New Hampshire Gov. John Lynch for agreeing to appoint a Republican as his replacement, said he will put aside partisanship as part of the new administration.

“This is not the time when we should stand in our ideological corners and shout at each other,” he said.

Mr. Obama ignored a reporter’s shouted question about the tax problems and waved at the press as he left the foyer.

Former Sen. John Breaux, Louisiana Democrat, told MSNBC that Mr. Daschle’s withdrawal “is a tragic loss. It is about getting the best person for the job.”

Former Sen. Trent Lott, Mississippi Republican, said Mr. Daschle “did the right thing, for his country, for his president, for himself.”

“We set impossible standards for our leaders,” he told MSNBC. “He couldn’t have gone into HHS and done the job” for which he was chosen by Mr. Obama.

But, said Mr. Lott, who was forced to resign his Senate seat in November 2007, “It’s sort of another pelt on the pole, and I hate to see that.”

“I was surprised at the number of groups that he gave speeches to in the health area,” he said.

Sen. Max Baucus, Montana Democrat and Senate Finance Committee chairman, who on Monday pledged to forge ahead with the nomination hearings, said he was regretful of Mr. Daschle’s decision.

“Tom would have been, as I said, a terrific partner at HHS on health reform, and I hope and fully expect that he will continue to play a leading and valuable role in health policy for this country,” Mr. Baucus wrote.

Mr. Daschle wrote a book in 2008 about health-care reform titled “Critical.”

Sen. John Kerry, Massachusetts Democrat, was more direct, saying he wished Mr. Daschle had not decided to withdraw.

“While Tom’s decision is a reminder of his loyalty to President Obama and his determination not to be a distraction, this was no ordinary appointment and today is not a good day for the cause of health care reform,” he said in a statement. “I believe that when the smoke clears and the frenzy has ended, no one will believe that this unwitting mistake should have erased thirty years of selfless public service and remarkable legislative skill and expertise on health care.”

Sen. Arlen Specter, Pennsylvania Republican, said, “I am sorry that he withdrew.”

Mr. Specter, who said he thought it highly unlikely that Mr. Daschle would reconsider, said it was unfortunate the media scrutiny of Mr. Daschle’s tax problem most likely contributed to his withdrawing his name for consideration.

“If you ask me if I thought it was a good idea to withdraw — no. I don’t like pressure at people. Daschle knows what the facts are, and he’s a very responsible guy, and if he wanted to withdraw, he’d withdraw on his own without the newspapers pressuring him or anybody else pressuring him. I do not like pressure.”

When asked whether he thought Mr. Daschle would have been confirmed by the Senate, Mr. Specter said he “wouldn’t speculate about that.”

“I don’t know,” he added. “I think it would also depend on what the facts were (regarding the reasons for his delinquent tax returns), which we still haven’t found out, and know won’t.”

Mr. Specter said he didn’t have anybody in mind as a good candidate to lead HHS.

Sen. Robert Bennett, Utah Republican, said Mr. Daschle’s decision to withdraw his name from consideration caught him off guard but said he now realizes it was inevitable.

“I must confess I was a little surprised, and in saying that, I realize I was caught in the cocoon of the Senate,” Mr. Bennett said. “Yeah, he had enough votes (to be confirmed), but this was far bigger than that, and I and you should all have been smart enough to figure that out in advance.”

Mr. Bennett, who said he had planned to vote against Mr. Daschle’s confirmation, said his former colleague “did the right thing” withdrawing his name.

“He could not possibly have functioned effectively with this cloud over him, and the senators who did vote for him would’ve been met with a firestorm of concern from their constituents,” he said.

Mr. Bennett added that public outrage over Mr. Daschle’s tax problems justifiably doomed his confirmation.

“The ‘Bennett law of political scandal,’ which was formulated back in the Watergate days, says the fallout is in inverse proportion to the complexity of the issue,” he said. “Nobody ever understood (the) Iran-Contra (scandal during the Reagan administration), I still don’t understand Iran-Contra, but Iran-Contra didn’t hurt Ronald Reagan. Not paying your taxes is very simple to understand.”

Sean Lengell and Richard C. Gross contributed to this article.

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