Daschle takes himself out of the running for HHS job

In a stunning development that cost President Obama one of his most important advisers, former Senate Majority Leader Tom Daschle on Tuesday withdrew his nomination as Health and Human Services secretary and director of the new White House Office on Health Care Reform, a victim of the furor triggered by his failure to fully pay his taxes on the use of a car.

The move is a major blow to the president, denying him his hand-picked choice to steer one of his most important and controversial initiatives through Congress. The end came with none of the hoopla of Daschle's nomination.

"This morning, Tom Daschle asked me to withdraw his nomination for secretary of Health and Human Services. I accept his decision with sadness and regret," said Obama in a statement. "Tom made a mistake, which he has openly acknowledged. He has not excused it, nor do I."

In his statement, Daschle said, "I will not be the architect of America's health care reform," something he had once seen as the crowning challenge of his long political career. Calling his nomination "one of the signal honors of an improbable career," he cited the continuing unease among senators about his late payment of $140,000 in back taxes and interest.

"If 30 years of exposure to the challenges inherent in our system has taught me anything, it has taught me that this work will require a leader who can operate with the full faith of Congress and the American people, and without distraction," he said. "Right now, I am not that leader."

Obama adviser David Axelrod said the president was surprised by Daschle's decision, but he told reporters it would not interfere with the healthcare debate. "We'll miss Sen. Daschle's leadership, but the issue has great power of its own," he said.

Senators were taken by surprise by Daschle's decision. "I was a little stunned. I thought he would have been confirmed," said Senate Finance Chairman Max Baucus, D-Mont. "Tom would have been, as I said, a terrific partner at HHS on health reform, and I hope and fully expect that he will continue to play a leading and valuable role in health policy for this country."

Sen. Barbara Mikulski, D-Md., called it "a sad day," while Sen. John Kerry, D-Mass., said he wished Daschle had not withdrawn. "While Tom's decision is a reminder of his loyalty to President Obama and his determination not to be a distraction, this was no ordinary appointment and today is not a good day for the cause of healthcare reform," he said.

But Senate Majority Whip Dick Durbin, D-Ill., called Daschle's decision "the honorable thing to do rather than put the administration and the president and his colleagues through an arduous process."

Republican Sens. John Cornyn of Texas and Tom Coburn of Oklahoma were telling reporters that Daschle should withdraw when the news broke. Unpaid taxes denied Obama the early confirmation of Treasury Secretary Timothy Geithner and, earlier on Tuesday, Nancy Killefer withdrew her nomination as deputy OMB director and chief performance officer because of her failure to pay some of her local taxes in Washington.

Dan Friedman and Anna Edney contributed to this report.