(Updates with withdrawal letter, background; adds byline)
By Jeff Mason
WASHINGTON Feb 3 U.S. President Barack Obama's
choice to oversee budget and spending reform, Nancy Killefer,
withdrew her nomination on Tuesday because of tax problems, she
said in a letter released by the White House.
Killefer is the third high-profile Obama appointee to be
plagued by tax-related issues, putting a blot on a transition
to power that the Obama administration had hoped would be
Killefer, a director at management consulting firm McKinsey
& Company and a former assistant Treasury secretary in the
Clinton administration, had been named to a newly created
position working with economic officials to increase
efficiencies and eliminate waste in government spending.
"I recognize that your agenda and the duties facing your
chief performance officer are urgent," Killefer wrote in the
letter to the president, asking for her nomination to be
"I have also come to realize in the current environment
that my personal tax issue of D.C. unemployment tax could be
used to create exactly the kind of distraction and delay those
duties must avoid."
Obama declined to answer a shouted question about the issue
during a ceremony announcing his pick for commerce secretary,
Republican Sen. Judd Gregg of New Hampshire.
A White House spokesman said Killefer's request had been
"She has withdrawn and we accepted her withdrawal," he
said. Killefer, who would have served as the deputy director of
the Office of Management and Budget, would have required
confirmation by the U.S. Senate for her position.
Tax problems are plaguing Tom Daschle, the former Senate
majority leader selected by Obama to spearhead U.S. healthcare
reform. Treasury Secretary Timothy Geithner's nomination was
also held up for tax issues, although he was eventually
Killefer did not go into detail about the unemployment tax
mentioned in her letter. She said her request for withdrawal
was made with reluctance.
Obama has repeatedly promised that his administration would
go "line by line" over its budgets with a focus on fiscal
responsibility even as he seeks huge amounts of money to
stimulate the U.S. economy.
(Editing by David Wiessler)