Daschle Withdrawal Could Affect Health Debate

Former Sen. Tom Daschle was in the hot seat for days because of news he had recently paid more than $100,000 in back taxes. Not a single senator came out against his nomination as secretary of Health and Human Services when he withdrew his name.

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ROBERT SIEGEL, host:

From NPR News, it's ALL THINGS CONSIDERED. I'm Robert Siegel.

MELISSA BLOCK, host:

And I'm Melissa Block. Former Senator Tom Daschle withdrew today as President Obama's choice to steer the nation's health care policy. Daschle, named as secretary of Health and Human Services and White House health czar, stepped aside amid revelations of more than $140,000 in delinquent taxes and interest. It was a big blow to the Obama administration. We'll hear from a Republican Senator who pushed for Daschle to step down. First, NPR's Julie Rovner reports on the reaction across the Capitol Hill.

JULIE ROVNER: It was grim-faced David Axelrod, President Obama's senior advisor, who emerged from a lunch with Democratic senators to face reporter's questions about Daschle's abrupt departure. Just last night, many of those same Democrats had vowed to see their former colleague confirmed, but Axelrod said Daschle didn't want them to have the fight for him.

Mr. DAVID AXELROD (President Obama's Senior Advisor): We've got enormously important business here in terms of our economic recovery package. Health care reform needs to move forward. And he simply didn't want to, as he said, be a distraction, and so he called this morning and informed us that he was going to withdraw his name.

ROVNER: Among those caught off guard was Senate Finance Committee Chairman Max Baucus. He's been counting on his former colleague to help push through a major overhaul of the nation's health care system. Last night, Baucus held a closed-door meeting where members grilled Daschle about his tax lapses, which included a failure to report use of a car and driver valued at more than $250,000. Baucus said he thought the meeting went well.

Mr. MAX BAUCUS (Senate Finance Committee Chairman): There were questions asked by Republican senators, but tone was collegial. It was - I mean, it was not, there was no - not acrimonious. There was no bitterness. There was no hostility. So based on that meeting, I'm a little surprised, frankly, at Senator Daschle's decision.

ROVNER: But others, like Vermont Democrat Patrick Leahy, praised Daschle for being selfless.

Senator PATRICK LEAHY (Democrat, Vermont): We know he would have been confirmed, and I think that he put the interests of the president ahead of his own. And he's admired for that.

ROVNER: Republicans, who had mostly held their fire while the controversy swirled around not only Daschle's taxes but the $5 million he'd earned since leaving the Senate, agreed that Daschle probably did the right thing in pulling out. Lindsey Graham of South Carolina warned that the confirmation hearings scheduled before the Finance Committee next week was likely to be a not-very-pretty affair.

Senator LINDSEY GRAHAM (Republican, South Carolina): Given for what was coming, it was probably a wise move for - clearly, he has the administration's best interests at heart, and I'm sure that's why he withdrew his name.

ROVNER: But other senators, like West Virginia Democrat Jay Rockefeller, still say Daschle was taking a fall he doesn't deserve.

Senator JAY ROCKEFELLER (Democrat, West Virginia): He got brought down by the fact that, you know, he never really had very much money of his own, and he was relying on South Dakota accountant who didn't come true for him and a business friend who never gave him the 1099 form. So he never got, you know, the help, so to speak, that somebody who isn't rich needs.

ROVNER: Now, having disposed of one controversy, the Obama administration faces a completely different but no less difficult problem: who will replace Daschle, not just as HHS secretary, but who will oversee the health reform push. The list of people with his unique qualifications and understanding of both the intricacies of health care and of Congress is a short one indeed, and the clock is already ticking. Julie Rovner, NPR News, Washington.

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Tax Woes Derail Daschle's Bid For Health Chief

Former Senate Majority Leader Tom Daschle. i 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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