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 Just before the Commerce announcement, news broke that Nancy Killefer had withdrawn her name from nomination to the chief performance officer job.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): 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: Later in the day, President Obama sat down for a series of previously scheduled network TV interviews. During a conversation with Fox News, he stressed that Daschle decided on his own to withdraw. But he added this.
Pres. OBAMA: I take responsibility for this mistake.
GONYEA: The president called the problem with Daschle's taxes an honest mistake. Mr. Obama said that he himself had made the judgment that despite the tax troubles, Daschle was the best person to bring people together in the way that real health care reform will require.
Pres. OBAMA: But, you know, what became clear to me is that we can't send a message to the American people that we got two sets of rules: one for prominent people and one for ordinary people. And, you know, so I consider this a mistake on my part, and one that I intend to fix, and correct and make sure that we're not screwing up again.
GONYEA: White House spokesman Gibbs said the search for a new nominee is underway. Gibbs also insisted that these tax problems do not tarnish the administration's reputation. 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. Transcript provided by NPR, Copyright NPR.
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