Daschle gives up Cabinet bid
Says he would be distraction with tax issues
WASHINGTON - Tom Daschle, a powerful former senator and one of President Obama's confidants, withdrew his nomination for Health and Human Services secretary yesterday, a stunning reversal that could sidetrack Obama's push for healthcare reform - and that underscored the difficulty of carrying out the new president's pledge to change the ways of Washington.
Daschle, who six years ago was the top Democrat in the US Senate, had been expected to win confirmation after apologizing Monday for waiting until last month to pay more than $128,000 in taxes, incurred partly on the use of a private luxury car and driver. But Republicans had also signaled that they would grill Daschle on conflict-of-interest issues, noting that the president's choice to lead a healthcare overhaul had accepted more than $5 million in speaking and consulting fees from the healthcare industry in the past two years.
Daschle said yesterday that he dropped his nomination because he did not want to be a distraction for the new administration, and because if confirmed he would not have been able to work on healthcare "with the full faith of Congress and the American people."
In a series of later TV interviews that aired last night, Obama said Daschle had made a seri ous mistake, but took some of the blame for his withdrawal. "Did I screw up in this situation? Absolutely," he said on NBC. "And I'm willing to take my lumps."
The White House said that Daschle and deputy budget director-designate Nancy Killefer - who also withdrew her nomination yesterday after failing to pay employment taxes on household help - recognized that their problems went against the standards that Obama set by signing directives on ethics and lobbying with great fanfare on his first full day in office.
"We can't send a message to the American people that we have two sets of rules - one for prominent people and one for ordinary people," Obama said on Fox News Channel.
Government watchdog groups said yesterday that Daschle and Obama were forced to yield to political reality, spurred, in part, by Obama's high standards and Daschle's failure to consider the appearance of impropriety.
"What we're seeing here is kind of the old way of doing business smacking up against the new, higher bar that Obama had put into place," said Mary Boyle, communications director for Common Cause, a nonpartisan group that advocates for government accountability.
"I believe the president when he says he wants to create the most ethical, transparent administration in history," added Ellen Miller, executive director of the Sunlight Foundation, which advocates for the use of technology to promote ethics in government. But letting Daschle go, she said, "must've been a tough one."
After Daschle's withdrawal, Senator John Ensign, a Nevada Republican, told reporters on Capitol Hill that there were "serious problems" with Daschle's activities, which he said were in conflict with Obama's pledge to shut the revolving door between lobbyists and government. "He saved the president from being embarrassed next week in a public hearing," Ensign said.
White House press secretary Robert Gibbs reminded reporters that Obama has been president for less than a month. "Is changing the way Washington works going to be more than a two-week job? Yes it is, and thankfully we've got four years to try."
But some Democrats worried that Daschle's departure will slow progress on getting health insurance to 47 million Americans without coverage. Besides heading the Department of Health and Human Services, Daschle was to have led the new White House Office of Health Reform.
"This was no ordinary appointment and today is not a good day for the cause of healthcare reform," said Senator John F. Kerry of Massachusetts.
Reform advocates, particularly liberal Democrats, desperately wanted to get a bill ready within the first 100 days of Obama's administration, looking to pass it this summer and have it signed into law before campaigning begins for the 2010 midterm elections. Daschle's withdrawal could set the clock back - or it could give Congress an opening to act ahead of the administration. Daschle and Senator Edward M. Kennedy of Massachusetts had already been working on major healthcare legislation for the better part of a year.
The White House, however, said the healthcare effort will not slow. "We will move forward and someone else will have to carry the flag and lead the effort," said senior adviser David Axelrod.
Daschle's surprise withdrawal capped perhaps the rockiest of Obama's 15 days on the job. In public and in private on Monday, Daschle had expressed remorse for his tax transgression, saying that while it was unintentional, he had "no excuse" and wanted to "deeply apologize to President Obama, to my colleagues, and to the American people."
Obama had said he "absolutely" stood by him.
Nearly a month after Obama announced his nomination, Daschle told the president about the tax problem, then filed amended tax returns for 2005-07 to report $128,203 in back taxes and $11,964 in interest. Part of the unpaid taxes involved the car service he received from Leo Hindery Jr., a major Democratic donor who paid Daschle as an adviser, and other portions were from his healthcare consulting income. Daschle also faced questions from the Finance Committee about whether he deducted more in charitable contributions than he should have.
Harry Reid, the top Democrat in the Senate, called Daschle "like a brother to me" and said he was "ideally suited" for the job.
Analysts said Daschle's withdrawal is a heavy blow to prospects for healthcare change.
Jonathan Oberlander, a health policy professor at the University of North Carolina-Chapel Hill, said the former senator from South Dakota had a singular set of skills: a detailed understanding of healthcare policy, firsthand knowledge of the failed effort to overhaul the healthcare system under President Bill Clinton, good relationships with key lawmakers, and the full support and confidence of the president.
"I think he was a very important asset in the health reform battle, so losing him is significant," Oberlander said.
Healthcare observers and advocates were hard pressed to name an obvious replacement; some spoke of Kansas Governor Kathleen Sebelius, a Democrat and a former state insurance commissioner, but she has relatively few Washington contacts. Former Democratic National Committee chairman Howard Dean, who was also governor of Vermont and a trained physician, has the qualifications, but critics point to Dean's prickly demeanor and his clashes not only with Republicans but with Rahm Emanuel, Obama's chief of staff.
Obama, himself, lamented losing Daschle. "I think nobody was better equipped to deal both with the substance and policy of healthcare," the president said on CNN. "He understands it as well as anybody, but also the politics, which is going to be required to actually get it done."
Sasha Issenberg and Lisa Wangsness of the Globe staff contributed to this report.