After Tom Daschle met with his former colleagues on the Senate Finance Committee behind closed doors on late Monday, the Obama Administration's nominee for Secretary of Health and Human Services told close associates the session had gone well. Daschle said privately that it looked as though he would weather the controversy that had begun with revelations that he had failed to pay $128,000 in taxes, most of which arose from his use of a car and driver provided to him by a private-equity firm for which he had consulted.
But by Tuesday morning, it became apparent that the storm was only intensifying, and Daschle, recognizing the change in the political winds, withdrew his name from consideration for the Cabinet post. Several editorial pages including the New York Times's had called on him to withdraw. And there was a new allegation, reported by Politico, that Daschle had recommended the very businessman who had supplied him with the car service for two Cabinet posts in the Obama Administration. As one close adviser put it, the case for Daschle had "appreciably deteriorated from 24 hours ago." (See who's who in Obama's White House.)
The decision to withdraw his name was Daschle's alone, the adviser said, adding, "The President was fine, was more than ready to hang tough on this." But Daschle had begun to realize that even though he probably would prevail in the end and win Senate confirmation, it would come at great cost to the Obama Administration.
Between his tax problems and the growing scrutiny of his lucrative ties to the health industry, the former Senate majority leader's nomination had become a repudiation of the very things Obama had promised to change in Washington. And coming on the heels of Treasury Secretary Timothy Geithner's failure to pay nearly $40,000 in taxes, Daschle's nomination was turning into fodder for political opponents and late-night comedians. It didn't help matters that on Tuesday morning, another Obama appointee, Nancy Killefer, withdrew her name from consideration for the position of chief White House performance officer amid reports that she had failed to pay unemployment taxes for household help in the District of Columbia.
Daschle acknowledged as much in his statement announcing his withdrawal. "If 30 years of exposure to the challenges inherent in our system has taught me anything, it has taught me that this work will require a leader who can operate with the full faith of Congress and the American people, and without distraction," he said. "Right now, I am not that leader, and I will not be a distraction."
But Obama is losing a most trusted ally, someone who had been one of the first Democratic establishment figures to support his presidential bid. Obama had tapped many of Daschle's former aides as he built his political organization. Between Daschle's expertise on the medical system and his understanding of the workings of Congress, he had seemed like the perfect choice to guide the health-care reform that Obama promised on the campaign trail. "I accept his decision with sadness and regret," said Obama, who spoke with Daschle by phone on Tuesday and was said to be surprised by the withdrawal, according to White House senior adviser David Axelrod. "Tom Daschle has devoted his life to public service and health-care reform so that every American has access to health care they can afford. I had hoped that he could bring this passion and expertise to bear to finally achieve that goal, which is so essential to the progress of our economy and the well-being of businesses and families across our nation." (Read "The Year in Medicine 2008: From A to Z.")
While many Senators greeted Daschle's withdrawal as a sad but necessary move in order for the Obama Administration to move forward, some said the controversy didn't warrant the move and that such levels of scrutiny could make it increasingly hard to find qualified individuals to enter public service. "Tom made it very clear he'd made a mistake, and he took responsibility for it," Senator John Kerry said in a prepared statement. "I believe that when the smoke clears and the frenzy has ended, no one will believe that this unwitting mistake should have erased 30 years of selfless public service and remarkable legislative skill and expertise on health care."
It is not clear who Obama will nominate to replace Daschle or whether that person will hold a dual post in the White House as health-care czar, as Daschle had insisted upon. "There's a lot of impetus and momentum behind health reform, and it will continue," Axelrod said. "We'll miss Senator Daschle's leadership, but the issue has great power of its own. People feel it in their own lives, businesses feel it, and it's part of our approach to helping this economy recover."
With reporting by Jay Newton-Small and Michael Scherer / Washington