Obama: 'I screwed up' in Daschle withdrawal

WASHINGTON - President Barack Obama on Tuesday abruptly abandoned his nomination fight for Tom Daschle and a second major appointee who failed to pay all their taxes, telling NBC News: "I screwed up."

"I’ve got to own up to my mistake. Ultimately, it's important for this administration to send a message that there aren't two sets of rules — you know, one for prominent people and one for ordinary folks who have to pay their taxes," Obama said on NBC’s "Nightly News with Brian Williams."

The admission came little more than 24 hours after Obama had said he was "absolutely" committed to Daschle's confirmation as secretary of health and human services, a job in which he would taken the lead in the president's ambitious plans for the nation's health care system.

"I'm frustrated with myself, with our team. ... I'm here on television saying I screwed up," Obama said on NBC. He repeated virtually the same words in interviews with other TV anchors.

Hours earlier, the White House had announced that Daschle had asked to be removed from consideration and that Nancy Killefer had made the same request concerning what was to be her groundbreaking appointment as a chief performance officer to make the entire government run better.

Worried about 'a distraction'
Daschle said in a brief letter to Obama that he refused to "be a distraction" from the new president's drive for health care reform. Obama said neither he nor Daschle excused the former Senate Democratic leader's tax errors but that he accepted his friend's decision "with sadness and regret."

Personal tax problems had been piling up for the new administration. Last week, the Senate confirmed Timothy Geithner as treasury secretary, but only after days of controversy over the fact that the man who would oversee the Internal Revenue Service had only belatedly paid $34,000 in income taxes.

Bill Richardson bowed out, too, though his difficulties didn't involve personal taxes. The New Mexico governor, who was Obama's first choice for commerce secretary, withdrew amid a grand jury investigation into a state contract awarded to his political donors.

Video   ‘Daschle had become a distraction’ Feb. 3: Chief White House Correspondent Chuck Todd reports on the Washington reaction to news of  Tom Daschle’s withdrawal. Nightly News

Questions about Daschle's failure to fully pay his taxes from 2005 through 2007 had been increasing since they came to light last Friday. Daschle overlooked taxes on income for consulting work and personal use of a car and driver, and also deducted more in charitable contributions than he should have. To resolve it, he paid $128,203 in back taxes and $11,964 in interest last month.

Daschle, chosen to lead the administration's push for sweeping health care reform, also was facing questions about potential conflicts of interests related to speaking fees he accepted from health care interests and about the advice he provided to health insurers and hospitals through his work at a law firm.

The car and driver were lent by Leo Hindery, head of a firm called InterMedia Advisors and former chief executive of the Global Crossing telecom company. Hindery is a longtime friend of Daschle and a veteran Democratic Party donor.

Tax lien on Killefer
Killefer, an executive with consulting giant McKinsey & Co., had been chosen by Obama to serve in two roles: as the first chief performance officer in a White House and as a deputy director at the Office of Management and Budget.

When Obama announced Killefer to much fanfare in early January, The Associated Press reported that the District of Columbia government had filed a $946.69 tax lien on her home in 2005 for failure to pay unemployment compensation tax on household help. She resolved the tax error five months after the lien was filed. Since then, administration officials had refused to say whether her tax problems extended beyond that one issue.

Video   Daschle 'emotional' Feb. 3: NBC's Andrea Mitchell recounts her conversation with an emotional Tom Daschle, in which he talked about how a New York Times editorial affected his decision to withdraw. MSNBC

By Tuesday, the tax questions had reached critical mass.

“Today was an embarrassment for us,” Obama said on NBC. He said he was “angry,” “disappointed” and “frustrated with myself” over the Daschle episode.

But the president claimed credit for appointing hundreds of “top notch” executive branch officials who have no tax problems.

“It’s important not to paint (with) a broad brush here, because overall not only have we gotten in place a functioning government in record time, but overall the quality of these people is outstanding.”

Still, the dual-withdrawal fiasco is “something I have to take responsibility for,” Obama told Williams.

“I appointed these folks. I think they are outstanding people. I think Tom Daschle, as an example, could have led this health care effort, a difficult effort, better than just about anybody. But as he acknowledged, it was a mistake. I don’t think it was intentional on his part, but it was a serious mistake. He owned up to it and ultimately made a decision that we couldn’t afford the distraction.”

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