Tom Daschle Withdraws as Obama's Health Secretary Nominee

Feb. 3, 2009— -- In a stunning setback for President Obama, Tom Daschle abruptly withdrew his nomination to become secretary of Health and Human Services today, following an admission that he failed to pay about $140,000 in back taxes.

In a joint Obama-Daschle statement, Obama accepted Daschle's withdrawal "with sadness and regret."

"Tom made a mistake, which he has openly acknowledged. He has not excused it, nor do I," Obama said.

Daschle, a former Senate majority leader from South Dakota, who had been one of Obama's closest advisers throughout his presidential campaign, said his tax problems meant he had lost the faith of the American people and was therefore unable to serve.

"This work will require a leader who can operate with the full faith of Congress and the American people, and without distraction," Daschle said in a statement released by the White House.

"Right now, I am not that leader, and [I] will not be a distraction," he said.

In addition to being nominated to be HHS secretary, Daschle was also slated to lead Obama's healthcare initative as health czar, a post from which he also withdrew.

Daschle's retreat raises questions about whether Obama can keep his promise to make more affordable healthcare one of the cornerstone of his agenda in his first 100 days in office.

Daschle's decision to quit the nominating process was surprising because Democratic senators had rallied around him Monday and Obama said he "absolutely" stood by Daschle.

Obama's backing didn't stop criticism of Daschle's fitness to join the White House cabinet. Sen. Jim DeMint, R-S.C., said Obama was "losing credibility" by continuing to support Daschle. "Part of leadership is recognizing when there has been a mistake made and responding quickly," DeMint said.

Daschle's withdrawal came just hours after Nancy Killefer, Obama's nominee to be chief performance officer, withdrew her nomination following the revelation that she had a $946.69 lien on her property in 2005 for failure to pay taxes.