Health and Human Services Secretary: Tom Daschle, a former Senate majority leader, was under fire for having failed to pay taxes on the personal use of a car and driver provided to him by a firm for which he was consulting. He recently filed amended tax returns and paid $128,203 in back taxes and $11,964 in interest owed. Daschle also faced questions about potential conflicts of interest related to speaking fees he had received from health care interests. He withdrew from consideration Feb. 3.
Chief Performance Officer: Nancy Killefer, a former Treasury official, faced questions about nonpayment of unemployment taxes. The District of Columbia filed a $946.69 lien on Killefer's home in 2005 for failure to pay unemployment compensation taxes on her household help. She withdrew her candidacy to be the nation's first chief performance officer Feb. 3, saying she did not want to distract from President Obama's "urgent" agenda.
Commerce Secretary: Sen. Judd Gregg (R-NH) is the second person tapped for the commerce post, and the second to withdraw his name from consideration. Obama earlier had considered New Mexico Gov. Bill Richardson for the job, but he withdrew in January amid a grand jury investigation into a state contract awarded to his political donors. Gregg was nominated on Feb. 3 after a behind-the-scenes deal ensured that New Hampshire's Democratic governor named a Republican to serve out Gregg's term. Gregg withdrew Feb. 12, citing "irresolvable conflicts" with President Obama.
Republican Sen. Judd Gregg of New Hampshire on Thursday withdrew his name from consideration as commerce secretary, citing "irresolvable conflicts" with President Obama. The move came as a setback for the administration as it worked to shore up confidence in the U.S. economy.
"This was simply a bridge too far for me," Gregg said during a late afternoon news conference. "It wasn't a good fit."
In an interview with the Springfield (Ill.) Journal-Register, Obama said that Gregg's withdrawal came "as something of a surprise, because the truth, you know, Mr. Gregg approached us with interest and seemed enthusiastic."
"But ultimately, I think, we're going to just keep on making efforts to build the kind of bipartisan consensus around important issues that I think the American people are looking for," the president said.
White House press secretary Robert Gibbs said in a statement, "We regret that he has had a change of heart."
Gregg had kind words for the president, saying the administration is "doing an extraordinary job in trying to manage this financial crisis." He acknowledged that his withdrawal now is "unfair in many ways," but said that he could not be a "100 percent" team member.
"The president asked me to do it, and I said yes," Gregg said. "That was my mistake, not his."
Gregg is Obama's second commerce nominee to withdraw his name; the first was New Mexico Gov. Bill Richardson. Gregg said he could not reconcile his economic beliefs with some aspects of the soon-to-be approved stimulus package. And he objected to the White House's plans to increase its oversight of the U.S. Census bureau, which is under the jurisdiction of the Commerce Department.
Gregg said he'll return to the Senate but won't run for re-election when his term expires in two years. He said he told the president earlier this week of his plans.
Gregg said that his decision to withdraw was a question of "being me ... being a fiscal conservative." He said that the census issue was "only a slight catalyzing issue."
Gregg, 61, the scion of a prominent New Hampshire family and top Republican on the Senate's budget committee, said he will have to "reflect on" why he didn't crystallize his thoughts earlier and avoid having to withdraw.
On the day he was nominated, Gregg lauded the president for outlining "an extraordinarily bold and aggressive, effective and comprehensive plan for how we can get this country moving."
In a statement, Gibbs said that Gregg had "reached out to the president and offered his name for secretary of commerce. He was very clear throughout the interviewing process that despite past disagreements about policies, he would support, embrace, and move forward with the president's agenda.
"Once it became clear after his nomination that Sen. Gregg was not going to be supporting some of President Obama's key economic priorities, it became necessary for Sen. Gregg and the Obama administration to part ways."
Gregg's withdrawal dealt another blow to Obama's attempt at bipartisan outreach, which had taken a hit in recent weeks when, with the exception of three GOP senators, Republicans in Congress rejected en masse the administration's economic stimulus plan.
Said Gregg in a prepared statement: "I have found that on issues such as the stimulus package and the Census, there are irresolvable conflicts for me. I greatly admire President Obama and know our country will benefit from his leadership, but at this time I must withdraw my name from consideration for this position."
Republicans have harshly criticized the Obama administration's decision to exert greater control over the Census Bureau, saying it was an attempt to politicize the once-in-a-decade event.
The outcome of the census has deep political implications, since congressional districts are drawn based on population. Much federal funding is distributed on the basis of population, as well.
Both of those factors mean there is a premium on counting as many residents as possible. Historically, the groups believed to be most undercounted are inner-city minorities, who tend to vote Democratic.
The Congressional Black Caucus and a group representing Latino elected officials had raised questions about Gregg, noting that as chairman of the Senate panel overseeing the Census Bureau budget, he frequently sought to cut funds that they believe led to an undercount of minorities.
To allay concerns over Gregg, the White House initially indicated that it might take greater control of the bureau. But amid GOP criticism it has since clarified that the White House will "work closely with the census director" and that the Census Bureau would not be removed from the Commerce Department.
Republicans Cheer Decision
The president at the time of Gregg's announcement was making a speech on the economy at the Caterpillar plant in East Peoria, Ill.
But Republican leaders in the Senate said they were thrilled at the prospect of Gregg's remaining in the Senate.
"This is excellent news," said Don Stewart, spokesman for Senate Minority Leader Mitch McConnell.
In a statement, McConnell said that Gregg "made a principled decision to return and we're glad to have him."
Following the high-profile withdrawal of other Obama nominees over tax issues — including former Sen. Tom Daschle, whose nomination to head the Health and Human Services Department was thwarted by tax troubles — Gregg insisted his departure had nothing to do with anything that came up during due diligence leading to his nomination hearing.
"Nothing about the vetting process played any role in this decision," Gregg said. "I will continue to represent the people of New Hampshire in the United States Senate."
Obama had roiled many in the Democratic Party when he named the conservative two-term senator, who would have been the third Republican named to a Cabinet position. The others are former Rep. Ray LaHood of Illinois, who is transportation chief, and Defense Secretary Robert Gates, held over from the Bush administration.
New Hampshire Republican Bonnie Newman had been tapped by the state's Democratic Gov. John Lynch to serve out the remaining two years of Gregg's term under a deal struck with the White House and Gregg to keep a Republican in the seat.
Gregg's withdrawal not only upsets the Obama administration's plans for finalizing the Cabinet but also throws open the New Hampshire Senate race in 2010. Gregg had been considered by many a shoo-in for re-election.
Here is the statement from Gregg on his decision Thursday to withdraw his nomination as commerce secretary:
"I want to thank the president for nominating me to serve in his Cabinet as secretary of Commerce. This was a great honor, and I had felt that I could bring some views and ideas that would assist him in governing during this difficult time. I especially admire his willingness to reach across the aisle.
"However, it has become apparent during this process that this will not work for me as I have found that on issues such as the stimulus package and the Census there are irresolvable conflicts for me. Prior to accepting this post, we had discussed these and other potential differences, but unfortunately we did not adequately focus on these concerns. We are functioning from a different set of views on many critical items of policy.
"Obviously the President requires a team that is fully supportive of all his initiatives.
"I greatly admire President Obama and know our country will benefit from his leadership, but at this time I must withdraw my name from consideration for this position.
"As we move forward, I expect there will be many issues and initiatives where I can and will work to assure the success of the president's proposals. This will certainly be a goal of mine.
"Kathy and I also want to specifically thank Governor Lynch and Bonnie Newman for their friendship and assistance during this period. In addition we wish to thank all the people, especially in New Hampshire, who have been so kind and generous in their supportive comments.
"As a further matter of clarification, nothing about the vetting process played any role in this decision. I will continue to represent the people of New Hampshire in the United States Senate."
With additional reporting by the Associated Press