*Daschle withdraws after tax flap
*Obama takes responsibility for mistakes in process
*Second nominee also felled by tax questions
By David Alexander
WASHINGTON, Feb 3 Barack Obama's choice to head
U.S. healthcare reform withdrew in a flap over personal taxes
on Tuesday, prompting the president to admit "I screwed up" and
distracting from his drive for a nearly $900 billion economic
Tom Daschle, a former Senate Democratic leader and key
Obama adviser who was named as health secretary, withdrew after
a storm over late tax payments raised questions about Obama's
pledge to bring high ethical standards to the White House.
Daschle said he did not want to become a "distraction"
after paying $140,000 in back taxes for failing to report as
income the use of a company car and driver for several years.
Obama said in a statement he accepted the decision "with
sadness and regret" because Daschle was highly qualified for
the post, and he acknowledged in television interviews later
that he had erred in not anticipating the problems.
"I think this was a mistake. I think I screwed up and I
take responsibility for it," Obama told CNN, adding he did not
want to send a message there is one standard for the powerful
and another standard for ordinary people.
"Ultimately I have to take responsibility for a process
that resulted in us not having an HHS (Health and Human
Services) secretary at a time when people need relief on their
healthcare costs," he told Fox.
White House spokesman Robert Gibbs said Daschle made the
decision to withdraw himself and it did not mean Obama's
healthcare plans were in trouble.
"The issue of affordable healthcare ... is bigger than one
person," Gibbs said. "I don't think the effort slows down for
health care reform."
But some Democrats said the removal of Daschle, who had
written a book on healthcare reform and had broad experience in
Washington, was a significant setback.
"It hurts, because Tom Daschle brought special experience
and qualities to this undertaking that almost no one can
match," said Senator Richard Durbin. "It does slow us down."
Daschle's withdrawal came shortly after Obama's nominee to
become the first U.S. "chief performance officer" also dropped
out on Tuesday because of tax questions.
Nancy Killefer, Obama's choice to oversee budget and
spending reform, said she did not want her problems to create
"distraction and delay." [ID:nWAT010894]
She was the third Obama nominee to have tax problems,
following Daschle and Treasury Secretary Timothy Geithner, who
was approved after facing questions about late payments.
DISTRACTION FOR OBAMA
The staff issues put Obama, who is just two weeks into his
presidency, on the defensive. On Monday, he said he
"absolutely" backed Daschle.
Obama, a Democrat, succeeded Republican George W. Bush on
Jan. 20 after an election campaign in which he pledged to bring
high ethical standards and transparency to Washington.
On Tuesday, Obama sought to highlight his ability to work
across party lines by naming a third Republican to his cabinet
as commerce secretary and pressing ahead with his drive to pass
a nearly $900 billion stimulus package to revive the economy.
But Daschle, after he received backing from Obama and
Democratic senators on Monday, was hammered in newspaper
editorials on Tuesday over his taxes as well as his work as an
adviser to a private equity firm.
"Surely President Obama can find qualified people to serve
in his cabinet who aren't hustling to write overdue checks to
the IRS," the Philadelphia Inquirer said. "Daschle's error is
too serious to ignore; it should disqualify him from serving in
DASCHLE ISSUE GRABS SPOTLIGHT
The recurring tax embarrassments threatened to grab the
spotlight as Obama pushed for rapid passage of an economic
stimulus bill aimed at pulling the U.S. economy out of its
worst crisis in decades.
"The only measure of my success as president when people
look back five years from now or nine years from now is going
to be did I get this economy fixed," Obama told CNN. "I'm going
to be judged on did we pull ourselves out of recession."
He said he viewed Feb. 16 as a firm deadline for passing
the stimulus bill, telling Fox, "Nobody disagrees with the idea
that if we keep on putting this off that we're going to end up
seeing more months with half a million people losing their job
each month. We can't afford to wait."
The Senate was debating the stimulus proposal on Tuesday,
but Republicans are putting up increasing resistance to
Democratic proposals they say favor government spending over
tax cuts to revive the economy.[ID:nN03512070]
Obama on Tuesday nominated Senator Judd Gregg as commerce
secretary, the third prominent Republican in his Cabinet, but
avoided shouted questions about Killefer's withdrawal from her
Gregg, 61, is the top Republican on the Senate Budget
Committee. He could play a key role in selling Obama's stimulus
package to skeptical members of his party.
"Judd is a master of reaching across the aisle to get
things done," Obama said at a White House ceremony.
Gregg's nomination followed an earlier embarrassment
when New Mexico Gov. Bill Richardson, Obama's first choice for
commerce secretary, withdrew in the face of a legal inquiry
into a company that did business with the New Mexico state
government. Richardson denied any wrongdoing.
(Additional reporting by Ross Colvin, Jeff Mason, Matt
Spetalnick, Susan Cornwell, Tom Ferraro and Susan Heavey,
Editing by Frances Kerry and Cynthia Osterman)