- The Washington Times - Wednesday, February 4, 2009

Two of President Obama‘s nominees for critical government posts on Tuesday withdrew their names from consideration, forced by bad publicity over tax problems to step aside and hindering the Democrat’s efforts to usher in a new, drama-free political era.

Tom Daschle dropped out as health and human services secretary and also will not serve in his powerful appointed role of health care czar, dealing Mr. Obama’s agenda a major blow.

Mr. Obama said during a series of network interviews Tuesday afternoon that it was his own mistake, reversing his vote of confidence in Mr. Daschle the previous day when he had told reporters he “absolutely” stood behind his nominee.

“Did I screw up? Absolutely,” the president told NBC. “I’m willing to take my lumps, that’s part of the job.”

Mr. Obama said it was “an embarrassment for us,” and said he was frustrated with himself and his team, but added it was important his administration “send a message that there aren’t two sets of rules.”

Also Tuesday, amid public scrutiny over Mr. Daschle’s failure to pay taxes, Nancy Killefer removed herself from the nomination to be chief performance officer because of her own, far smaller problems with a tax lien on her home. Mr. Obama had tasked her with finding wasteful spending and inefficiencies in the federal budget as he attempts to pass a $900 billion economic stimulus plan being attacked as filled with nonessential special projects.

Even Senate Republicans were saying Mr. Daschle, the former Democratic leader of the Senate, was uniquely qualified and plugged in to be able to push through broad reforms.

The White House refused to give a timeline for replacement nominees, saying only that the search was ongoing, and standing firm behind the vetting process despite three high-profile withdrawals in less than 30 days.

On CNN, Mr. Obama said he was not worried about more tax mishaps surfacing: “We’re going to make sure we fix it so it doesn’t happen again.”

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, told MSNBC he read a New York Times editorial calling for him to step aside and decided to withdraw to spare Mr. Obama the embarrassment.

He spoke to Mr. Obama by telephone while the president sat in his private study.

Progressive bloggers had been going after Mr. Daschle as elitist and aloof for several days after ABC News first reported the tax flap, and the Nation magazine joined the Times in calling for him to withdraw.

Former Labor Secretary Robert Reich wrote in his blog Tuesday he viewed the public outrage as a broader issue that included Mr. Daschle’s influence within the health care field and the speaking fees he earned consulting for major players.

“Typical Americans are hurting very badly … [and] resent people who appear to be living high off a system dominated by insiders with the right connections,” he wrote. “They’ve become increasingly suspicious of the conflicts of interest, cozy relationships, and payoffs that seem to pervade not only official Washington but our biggest banks and corporations.”

He said Mr. Daschle would have done a good job, “but the public wants change, real change, big change. There’s no tolerance any longer for the way things used to be done.”

White House press secretary Robert Gibbs defended the president as reporters asked if his change message had been marred by the scandals.

“I think the president would say to you that he didn’t believe that we were going to change the way Washington has worked the past three decades in the first two weeks of this administration,” Mr. Gibbs said.

Jonathan Singer at the liberal blog MyDD said he worries the withdrawal could inhibit the overall push for universal health care.

“If Daschle didn’t feel like he could stand up for a week in this fight, did he really have it in him to lead the fight — against an opposition with tens of millions of dollars, or more, at its disposal to spread misinformation and insinuations — for universal health care,” he wrote.

Sen. John Kerry said it was a bad day for the cause of health care reform.

“I believe that when the smoke clears and the frenzy has ended, no one will believe that this unwitting mistake should have erased 30 years of selfless public service and remarkable legislative skill and expertise on health care,” said the Massachusetts Democrat.

The dual secretary and czar posts would have allowed Mr. Daschle, whose 2008 book “Critical” tackled the health care crisis, to shape policy from within the White House.

Mr. Daschle, who lost his bid for re-election as senator from South Dakota in 2004, said he refused to divert attention from 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,” he said. “Right now, I am not that leader, and will not be a distraction.”

Mr. Gibbs repeatedly denied the White House had leaned on Mr. Daschle to step aside, and his departure marked the third withdrawal since New Mexico Gov. Bill Richardson removed himself from consideration on Jan. 4.

Mr. Richardson was the president’s first choice for the Commerce Department, but he pulled his name because of an ongoing political corruption and ethics investigation.

Ms. Killefer, a management consultant at McKinsey and former assistant secretary of the Treasury, said in a letter to Mr. Obama on Tuesday she had to reluctantly withdraw her name.

“I recognize that your agenda and the duties facing your chief performance officer are urgent. I have also come to realize in the current environment that my personal tax issue of D.C. unemployment tax could be used to create exactly the kind of distraction and delay those duties must avoid,” she wrote.

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

Treasury Secretary Timothy Geithner was confirmed despite his failing to pay Social Security taxes for several years. His hearings were contentious after the issues surfaced, but Mr. Obama stood by him as the right man for the job.

Sen. Robert F. Bennett, Utah Republican, said Mr. Daschle had the votes to be confirmed, but added that 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.

• Sean Lengell and Richard C. Gross contributed to this report.

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