Daschle Withdraws From Cabinet Nomination

Tom Daschle, President Barack Obama's pick to head the Department of Health and Human Services, withdrew his nomination Tuesday amid a controversy over his taxes. Also Tuesday, Nancy Killefer withdrew her nomination for the post of chief performance officer after bungling payroll taxes.

ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MELISSA BLOCK, host:

And I'm Melissa Block.

There were some major setbacks for President Barack Obama today. Former Senator Tom Daschle, tapped to overhaul the nation's health care system, withdrew his Cabinet nomination. Daschle was embroiled in questions about $140,000 in delinquent taxes - most of that for a car and driver - and a potential appearance problems with his highly paid work as a Washington consultant. The withdrawal was a surprise and it left a hole in White House plans for health care reform.

SIEGEL: The former Senate majority leader was named to be secretary of Health and Human Services and White House coordinator for all health policy. Also today, Nancy Killefer, nominated as the chief performance officer, overseeing government efficiency, withdrew her name, also citing tax matters. All of this raised questions about how candidates for top jobs are vetted. NPR's Don Gonyea has the first of two reports.

DON GONYEA: It was the rockiest day yet for the still new Obama administration. The day began routinely enough. The big event on the schedule was to be the nomination of Republican New Hampshire Senator Judd Gregg as Commerce secretary. It was another win for bipartisanship. The president talked about the economic challenges ahead.

President BARACK OBAMA: These are the tasks of the Commerce Department. And I believe that Judd Gregg is the right person to help guide the department towards these goals.

GONYEA: That was at 11:00 AM. But already, the White House was losing control of the day's storyline. Just before the Commerce announcement, news broke that Nancy Killefer had withdrawn her name from nomination to the chief performance officer job. That's a newly created White House position. She, too, cited tax problems - problems that had been reported nearly a month ago - relating to a household employee. It was less than a $1,000, a tiny amount, compared to Daschle.

But if you count Treasury Secretary Timothy Geithner, that made three top Obama nominees to have a tax issue. But the Killefer news had barely taken hold when the big surprise of the day came, that Tom Daschle had contacted the president to say he was stepping aside. White House spokesman Robert Gibbs was pressed to explain why the Daschle and Killefer departures.

Mr. ROBERT GIBBS (White House Press Secretary): I think they both recognized that you can't set an example of responsibility, but accept a different standard in who serves.

GONYEA: Gibbs provided no details of conversations the president had with Daschle or of White House views on any lapses in the vetting process. In the official written statement, Mr. Obama said he accepted Daschle's decision with sadness and regret. Gibbs also avoided giving a timeline of when and how both decisions came down. He insisted that each nominee came to the decision to withdraw on their own.

Mr. GIBBS: Each also decided they couldn't distract from the agenda that the president was pursuing. The agenda that he was pursuing is bigger than them, it's bigger than me, it's bigger than any of us that serve at the pleasure of the president of the United States.

GONYEA: He said the need to now find replacements will not slow the work of the administration. As a candidate, Mr. Obama said health care would be a priority. And in Daschle, he had someone with deep experience with the issue and in dealing with the Congress. Today, Gibbs said, the search for a new nominee is underway. He would not mention any names. Gibbs also insisted that these tax problems do not tarnish the administration's reputation as an agent for change and for high ethical standards.

But on Capitol Hill, Republican Senator John Ensign said the Daschle nomination was flawed from the beginning. And he raised doubts about the president's commitment to real change.

Senator JOHN ENSIGN (Republican, Nevada): President Obama has said that he wants to stop the revolving door, that he doesn't want lobbyists as part of his administration.

GONYEA: But Ensign went on to say that while not registered as a lobbyist, Daschle made millions of dollars working for a lobbying and law firm.

Sen. ENSIGN: That just seems disingenuous to me, and I don't think passes a smell test.

GONYEA: But Senate Leader Harry Reid said Daschle was the right choice.

Senator HARRY REID (Democrat, Nevada): He's written a book on health care. He is a person who is really ideally suited to be the secretary of HHS, but there were some - things came up. And as everyone knows, Senator Daschle's like a brother to me, and he made the decision personally to withdraw. I support his decision.

GONYEA: So now the Obama administration continues to work to solve the economic stimulus package, while also filling some key personnel slots, while it also sorts out the events of a day that underscores just how unpredictable Washington can be.

Don Gonyea, NPR News, the White House.

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Tax Woes Derail Daschle's Bid For Health Chief

Former Senate Majority Leader Tom Daschle. i

Former Senate Majority Leader Tom Daschle had been up for two administration posts, HHS chief and White House health care czar. Mark Wilson/Getty Images hide caption

itoggle caption Mark Wilson/Getty Images
Former Senate Majority Leader Tom Daschle.

Former Senate Majority Leader Tom Daschle had been up for two administration posts, HHS chief and White House health care czar.

Mark Wilson/Getty Images

Tom Daschle withdrew his name from consideration as President Obama's nominee for secretary of health and human services on Tuesday amid questions over his failure to pay more than $140,000 in back taxes and interest.

Daschle's decision came hours after another Obama nominee — former Treasury official Nancy Killefer — announced she was withdrawing her name from consideration for the nation's first chief performance officer because of her own tax problems.

In a statement, Daschle said his years in public service have taught him that revamping the nation's health care system requires a secretary who has the full support of Congress and the American people.

"Right now, I am not that leader. ... The focus of Congress should be on the urgent business of moving the president's economic agenda forward, including affordable health care for every American," Daschle said. "I will not be the architect of America's health system reform, but I remain one of its most fervent [supporters]."

The president accepted Daschle's withdrawal. "Now, we must move forward," Obama said in a written statement.

"Tom made a mistake, which he has openly acknowledged," Obama said. "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."

Daschle had been up for two administration posts, HHS chief and White House health care czar. His decision to step aside came as a surprise on Capitol Hill. On Monday, Obama, Vice President Biden and Senate Democrats said they would stand behind Daschle despite the tax problems and questions about potential conflicts of interest.

Questions about Daschle began swirling last month when the former Senate Democratic leader filed amended returns for 2005-2007 to report $128,203 in back taxes and $11,964 in interest. He owed the money because a friend had provided him with chauffeur service for three years. An aide said Daschle had paid both amounts.

Daschle also faced questions about potential conflicts of interest because of speaking fees he accepted from health care businesses. The former South Dakota senator also had received payments from insurers and hospitals through his work at a law firm after losing his seat in 2004.

Daschle is the third Obama administration nominee to have tax problems.

Treasury Secretary Timothy Geithner's confirmation was held up over his failure to pay more than $48,000 in back taxes and interest. He apologized and paid the taxes, but Republicans took him to task during Senate hearings.

Although Killefer's tax bill was far less, she withdrew on Tuesday from consideriation to become chief performance officer, a position intended to increase government efficiency and eliminate waste.

Killefer stated in her withdrawal letter to Obama that she didn't want her tax problem with the District of Columbia government to be a "distraction."

"I recognize that your agenda and the duties facing your chief performance officer are urgent," she wrote. "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. Because of this, I must reluctantly ask you to withdraw my name from consideration."

The Associated Press reported in January that the District of Columbia government had filed a $946.69 lien on Killefer's home in 2005 for failure to pay unemployment compensation taxes on her household help.

White House press secretary Robert Gibbs said Daschle and Killefer made the decision to step aside on their own.

"I think they both realize you can't set an example of responsibility but accept a different standard in who serves," Gibbs said. "They both decided and recognized nominations will distract from important goals and the critical agenda the president put forward."

Last month, Obama's initial choice for commerce secretary, New Mexico Gov. Bill Richardson, withdrew his name from consideration because of an investigation into a state contract awarded to his political donors.

On Tuesday, Obama nominated Republican Sen. Judd Gregg to serve as commerce secretary.

From NPR and wire reports

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