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Tax Lapses Derail Daschle and Killefer Nominations

Two prominent Obama nominees, Tom Daschle and Nancy Killefer, withdrew their nominations Tuesday over controversies surrounding tax lapses. Political reporters mull the impact.

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    President Obama today lost two people he had chosen for top government positions over unpaid taxes and other problems. Tom Daschle withdrew from consideration as secretary of health and human services. Nancy Killefer dropped out as the choice for chief performance officer.

    NewsHour correspondent Kwame Holman has our lead story report.


    It was not the way the Obama White House hoped to spend this day, to say the least. But Daschle, the former Senate majority leader, faced mounting criticism. He'd been forced to pay $140,000 in back taxes and interest for a car service he used from 2005 to 2007.

    Shortly after midday, he issued a surprise statement saying, "This work will require a leader who can operate with the full faith of Congress and the American people and without distraction. Right now, I am not that leader, and I will not be a distraction."

    Hours earlier, Nancy Killefer issued her own statement. She ran into trouble in the form of unpaid unemployment taxes. She, too, said she did not want to be a distraction.

    At the White House, press secretary Robert Gibbs was peppered with questions over the withdrawals.

    ROBERT GIBBS, White House spokesman: The president understands that each of these individuals has served this country with distinction, appreciates that service. Each asked to withdraw their nomination, and the president on each case accepted those withdrawals.

    Each also decided they couldn't distract from the agenda that the president was pursuing, that the agenda that he was pursuing is bigger than them, it's bigger than me, it's bigger than any of us that serve at the pleasure of the president of the United States.


    Gibbs also defended the Obama team's vetting process for nominees, and he insisted the administration's ethical standards are the highest ever.

    At the Capitol, a senior adviser to the president, David Axelrod, met with Democratic senators today. The Senate already had confirmed Treasury Secretary Timothy Geithner despite his failure to pay taxes, but Axelrod said Daschle knew he would have faced a tougher time and a lengthy confirmation process.

    Republican Sen. John Ensign of Nevada said Daschle's background as a policy adviser to a lobbying firm also posed a problem.


    President Obama has said that he wants to stop the revolving door, that he doesn't want lobbyists as part of his administration. Well, I don't know how you get paid $2 million by a lobbying firm and not call yourself a lobbyist. That just seems disingenuous to me and I don't think passes the smell test.

    So I personally think that Senator Daschle, you know, was going to face some tough questions. And to stop an embarrassment from happening for this president, I think he saved the president from being embarrassed next week in a public hearing.


    But Daschle also had his defenders, among them Majority Leader Harry Reid.

    SEN. HARRY REID, D-Nev., Senate majority leader: Senator Daschle served here for many years. He was a Democratic leader for 10 years. He served on the Finance Committee even longer than that. He was the face, in the Senate at least, of the Clinton health care plan. He's written a book on health care.

    He is a person who is really ideally suited to be the secretary of HHS, but there were some things that came up and, as everyone knows, Senator Daschle is like a brother to me, and he made the decision personally to withdraw. I support his decision.


    In his own statement, President Obama said he accepted Daschle's decision with sadness and regret. He also named a new nominee for commerce secretary, Republican Sen. Judd Gregg of New Hampshire.


    Now, clearly, Judd and I don't agree on every issue, most notably who should have won the election. But we do agree on the urgent need to get American businesses and families back on their feet.

    We see eye to eye on conducting the nation's business in a responsible, transparent, and accountable manner. And we know the only way to solve the great challenges of our time is to put aside stale ideology and petty partisanship and embrace what works.

    JUDD GREGG, Commerce secretary-designate: This is not a time for partisanship. This is not a time when we should stand in our ideological corners and shout at each other. This is a time to govern and govern well.

    And, therefore, when the president asked me to join his administration and participate in trying to address the issues at this time, I believed it was my obligation to say yes, and I look forward to it with enthusiasm.


    The Democratic governor of New Hampshire today named Republican Bonnie Newman to fill out the remainder of Greg's Senate term. The president's first choice for Commerce was New Mexico Gov. Bill Richardson. He withdrew a month ago amid a grand jury investigation of state contracts.


    Late this afternoon, President Obama made his own public statement in an interview with ABC News.


    That's an issue. And, you know, as I've said publicly, you know, ultimately I take responsibility for the situation that we're in.

    But what I also think is important is to stay focused on the overarching theme of this administration, which is making sure that we get this economy back on track, that we provide health care for people who are in desperate need of it.

    You know, I think Tom Daschle would have been the best person to help shepherd through a health care bill through a very difficult process in Congress. And so, you know, I regret the fact that he's not going to be serving, but we're going to move forward.