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Obama Says He Erred in Nominations

Daschle and Another Pick Withdraw Over Tax Problems

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Katie Couric speaks with President Obama, who admits that he "messed up" in his selection of Tom Daschle for Health and Human Services secretary.
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By Anne E. Kornblut and Michael D. Shear
Washington Post Staff Writers
Wednesday, February 4, 2009

President Obama acknowledged yesterday that he had "made a mistake" in trying to exempt some candidates for positions in his administration from strict ethics standards and accepted the withdrawal of two top nominees, including former Senate majority leader Thomas A. Daschle, in the first major setback of his young presidency.

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Obama officials had sought a seamless transition, nominating most of his Cabinet at record pace and taking office ready to implement a raft of new policies. His reversal yesterday suggested that speed may have come at a cost, and that Obama, despite the overwhelming popularity he had upon taking office and the major challenges facing the nation, will not be spared from the same kind of scrutiny his predecessors have faced.

In jettisoning one of his closest and earliest political allies, the president appeared eager to make a course correction after days of criticism that his administration was not abiding by its own stated ethical standards and questions about his ability to bring change to the capital.

"Did I screw up in this situation? Absolutely. I'm willing to take my lumps," Obama told NBC's Brian Williams, one of five interviews he gave yesterday afternoon. Obama told the network anchors that there are "not two sets of rules" for people, and said that average taxpayers deserve to have public officials who pay their taxes on time.

Daschle's exit from consideration to lead the Department of Health and Human Services after a firestorm over his failure to pay $146,000 in taxes on time came as a shock to the president's supporters in Washington. Just a day earlier, Obama had pledged his full support for the former Democratic Senate leader who was widely expected to be confirmed. And just hours before Daschle bowed out, Nancy Killefer, Obama's nominee for the newly created position of chief performance officer, also stepped aside because of a tax problem.

Daschle's withdrawal came as a jolt to the administration, serving as a rebuke to Obama officials who had privately and publicly brushed aside the idea that personal tax issues would reach a boiling point. Senior officials had insisted that the public was too concerned with the ongoing economic collapse to fixate on the foibles of the people being marshaled to try to set the nation back on course.

And perhaps most significant, the move threatened Obama's plans to overhaul the health-care system, a central policy initiative and one so important that he had chosen Daschle for a perch both at the Department of Health and Human Services and in the White House itself. Daschle withdrew from consideration for both posts yesterday, and advisers said they did not know whether the next nominee would serve in dual roles, a measure of the disarray the controversy had caused.

Daschle disclosed the decision in a joint statement with Obama, acknowledging that questions about his tax lapses had become "a distraction." "I will not be the architect of America's health system reform, but I remain one of its most fervent supporters," he said.

Obama, in that statement, described Daschle's tax problems as a "mistake" that he did not excuse. But the administration did not fully explain the sudden decision, which came only after media scrutiny and threats from some Republicans that Daschle would face a difficult confirmation process.

Daschle's exit came just hours after Killefer announced her withdrawal amid questions about a $967 tax lien that was placed on her Washington home in 2005 after she did not pay unemployment compensation taxes on household help. Both events upstaged the president's formal announcement of his choice of Sen. Judd Gregg (R-N.H.) as commerce secretary -- and a visit that Obama and the first lady made to read to students at a District charter school.

The administration had initially ignored criticism of Daschle after the disclosure last Friday that he had not paid taxes on a car and driver that a private equity firm had made available to him. As recently as Monday, it still appeared that he would be confirmed by the Senate, where he still had the near-unanimous loyalty of his former Democratic colleagues.

Key lawmakers were also caught off guard by the reversal. Sen. Max Baucus (D-Mont.), chairman of the Finance Committee, who offered Daschle his firm support after a 75-minute meeting on Monday, said he was told just 15 minutes before the news broke. "The tone was almost collegial; it was not acrimonious," Baucus said of the committee meeting, during which senators spent an hour reviewing the report on Daschle's finances and then met with him behind closed doors. "Based on that meeting, I'm a little surprised by Senator Daschle's decision," he said.


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