WASHINGTON — Former Sen. Tom Daschle withdrew his nomination as secretary of Health and Human Services chief on Tuesday, saying his tax problems meant he could not operate "with the full faith of Congress and the American people."
Daschle's decision came under mounting pressure from his former Senate colleagues, even as many publicly stood by him. It was announced by the White House hours after the president's nominee for chief performance officer, Nancy Killefer, dropped her bid because of her own tax woes.
Daschle's failure to initially pay what became $146,000 in back taxes, even as he leveraged his former role as Senate majority leader into $5 million in income in just two years, was a problem for Obama. The president campaigned on a promise to change Washington and reduce the prevalence of special interests and revolving-door interests.
But Daschle's withdrawal could complicate Obama's plans to work with Congress to enact universal health care coverage, on which Daschle was to have been point man.
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Obama issued a printed statement just before 1 p.m. saying he had accepted Daschle's decision with "sadness and regret."
"Tom made a mistake, which he has openly acknowledged. 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 . . . Now we must move forward."
Said Daschle, "I will not be the architect of America's health system reform, but I remain one of its most fervent supporters."
Daschle was headed for big trouble on Capitol Hill. Republicans had been largely mum Monday, but by Tuesday, found e-mails, phone calls and radio talk shows were exploding with messages of opposition.
"The story kept getting worse and worse," said Sen. John Cornyn, R-Texas.
"On my gosh. The calls and e-mails to our office just erupted," said Senate Republican Policy Committee Chairman John Ensign of Nevada.
The grass roots network was revving up, fast. Grover Norquist, president of Americans for Tax Reform, which supports conservative causes, said Geithner got confirmed because lawmakers were eager to show they could be bipartisan and collegial. But Daschle suggested an arrogance that didn’t play well in the heartland.
Too often, said Norquist, "people in this town seem to pass laws for other people to obey."
Not only were people angry about the tax problems, they were disgusted by Daschle's lobbying ties.
"Geithner, at least, seemed to have a plausible explanation for his tax problems," Ensign said. Treasury Secretary Timothy Geithner failed to pay $34,000 in self-employment taxes, and repaid the amount with $8,000 interest. He was confirmed last month, but largely without Republican support.
But Daschle was another matter. "He got $2 million from a lobbying firm. How does that make him not a lobbyist?" Ensign said before Daschle withdrew. "Does that pass the smell test with most of America? I submit it probably doesn't."
He met privately with Senate Finance Committee members Monday night for an hour and 15 minutes, and Democrats remained resolutely supportive. Even Tuesday, Sen. John Kerry, D-Mass., said Daschle should "absolutely not" quit. And after Daschle's withdrawal, they continued to praise him.
"Sen. Daschle is one of the most honorable, decent people I've ever known. I would trust my life to Tom Daschle. This is a tragedy," said Senate Budget Committee Chairman Kent Conrad, D-N.D. "I always have great faith in him," said Sen. Dianne Feinstein, D-Calif.
Democrats insisted they put no pressure on Daschle to quit. "I really hadn't decided how I would vote," said Sen. Ben Nelson, D-Neb.
But privately, they noted that he was headed for trouble because the confirmation vote would not occur until next week, allowing the grass roots effort against him to grow, and at least one Senate committee was likely to hold another public hearing on his nomination.
"This hadn't reached the 'grocery line' test yet," said Nelson, meaning people back home were not talking about it casually, "but we found it was something they were concerned about."
Democrats were uncertain how the withdrawal would affect Obama's health care effort. Not only is Daschle no longer a player but Sen. Edward Kennedy, D-Mass., chairman of the Senate health plan, is ailing. That deprives Obama of two of Washington’s most respected players.
Losing Daschle on health care, Conrad said, "is a tremendous loss for our country."