WASHINGTON (AP) - Tom Daschle withdrew Tuesday as President Barack Obama's nominee to be health and human services secretary, dealing potential blows to both speedy health care reform and Obama's hopes for a smooth start in the White House.
"Now we must move forward," Obama said in a written statement accepting "with sadness and regret" Daschle's surprise request to be removed from consideration. A day earlier, Obama had said he "absolutely" stood by Daschle in the face of problems over back taxes and potential conflicts of interest.
Daschle, the former Senate Democratic leader and a strong backer of Obama's presidential bid, said he would have been unable to operate "with the full faith of Congress and the American people."
"I am not that leader, and will not be a distraction" to Obama's agenda, he said.
Asked repeatedly whether the White House sought Daschle's withdrawal, White House press secretary Robert Gibbs said Daschle himself decided to remove his name from nomination. Daschle "did not get a signal" from the White House to step aside, Gibbs said.
Obama had given Daschle two jobs-to be White House health czar on top of the post leading the Health and Human Services Department-and Daschle is relinquishing the czar post too. The developments called into question whether Obama will be able to move as quickly as he has promised on sweeping health care reform-one of the pillars of his first 100 days agenda.
"It really sets us back a step," said Sen. Dick Durbin, D-Ill. "Because he was such a talent. I mean he understood Congress, serving in the House and Senate he certainly had the confidence of the president."
Daschle's stunning statement came less than three hours after another Obama nominee also withdrew from consideration, and also over tax problems. Nancy Killefer, nominated by Obama to be the government's first chief performance officer, said she didn't want her bungling of payroll taxes on her household help to be a distraction.
"They both recognized that you can't set an example of responsibility but accept a different standard of who serves," Gibbs said. He said neither wanted to be a distraction or get in the way of Obama's agenda.
Gibbs also said Obama has confidence in both his vetting process and in the people who serve in the White House. Still, he added: "the president takes responsibility" for the nomination troubles.
Daschle was the third high-profile Obama nominee to bow out. Obama initially had tapped Bill Richardson to be Commerce secretary, but the New Mexico governor withdrew amid a grand jury investigation into a state contract awarded to his political donors.
Obama, Vice President Joe Biden and Daschle's former Democratic colleagues had rallied to his defense in the wake of questions about his failure to fully pay his taxes from 2005 through 2007. Last month, Daschle paid $128,203 in back taxes and $11,964 in interest.
"Tom made a mistake, which he has openly acknowledged," Obama said. "He has not excused it, nor do I. But that mistake and this decision cannot diminish the many contributions Tom has made to this country."
"I was a little stunned. I thought he was going to get confirmed," said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, the panel that would have voted on Daschle's nomination. "It's regrettable. He's a very good man."
Daschle also was facing questions about potential conflicts of interests related to the speaking fees he accepted from health care interests. Daschle also provided advice to health insurers and hospitals through his post-Senate work at a law firm.
It all proved too bitter a pill for senators to swallow, even for a former member of their club. Last week, the Senate confirmed Timothy Geithner as Treasury secretary despite his tax problems.
The controversy also has undercut Obama's promise to run a more ethical, responsible and special interest-free administration.
The withdrawal came after Republicans and major newspapers had been questioning Obama's initial decision to stick with Daschle.
Republican Sen. Jim DeMint of South Carolina said Obama was "losing credibility" with his statements in support of Daschle. "Part of leadership is recognizing when there has been a mistake made and responding quickly," the Republican said.
In an editorial, The New York Times described Daschle's ability to move "cozily between government and industry" as a cloud over any role he might play in changing the nation's health care system.