Why Daschle Stepped Down

By Dan Froomkin
12:46 PM ET, 02/ 3/2009

Daschle at the Senate yesterday. (Melina Mara/The Washington Post)

President Obama's good friend, trusted advisor and would-be health czar withdrew his nomination as secretary of health and human services today as the controversy over his failure to pay back taxes threatened not only to distract attention from the president's agenda but tarnish the president's image.

A good deal of the public's excitement over Obama's presidency has to do with his repeated promise to make "a clean break from business as usual."

That's why his making exceptions from the rules for the people he considers really important had been rubbing so many people the wrong way.

Peter Baker wrote this morning in the New York Times: "During almost two years on the campaign trail, Barack Obama vowed to slay the demons of Washington, bar lobbyists from his administration and usher in what he would later call in his Inaugural Address a 'new era of responsibility.' What he did not talk much about were the asterisks.

"The exceptions that went unmentioned now include a pair of cabinet nominees who did not pay all of their taxes. Then there is the lobbyist for a military contractor who is now slated to become the No. 2 official in the Pentagon. And there are the others brought into government from the influence industry even if not formally registered as lobbyists....

"[W]hen faced with the perennial clash between campaign rhetoric and Washington reality, Mr. Obama has proved willing to compromise.

"'This is a big problem for Obama, especially because it was such a major, major promise,' said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington. 'He harped on it, time after time, and he created a sense of expectation around the country. This is exactly why people are skeptical of politicians, because change we can believe in is not the same thing as business as usual.'"

Michael Scherer wrote in Time: "Barack Obama promised during his campaign that lobbyists 'would not get a job in my White House.'"

And while not technically a lobbyist, "Daschle, in fact, made millions of dollars since he left government doing stuff that looks, smells and tastes a lot like lobbying — work that led to the taxes flap that forced him to apologize to his former colleagues on Monday for what he called a 'completely inadvertent' mistake," Scherer writes. "And while it's that failure to pay that more than $128,000 in back taxes and interest that has briefly marred his confirmation as Secretary of Health and Human Services, it's the ethical gray area Daschle's advisory work represents that has called into question Obama's promises of changing the culture of Washington."

Daschle of course was only the second (of now three) nominees with a tax problem. Treasury Secretary Timothy F. Geithner was confirmed last week despite his failure to pay more than $25,000 in self-employment taxes.

Peter S. Canellos wrote in his Boston Globe column that the "cost to Obama could be considerable.

"Already, the tax avoidance of his nominees is giving fuel to the late-night comedians who have struggled to develop a take on the new administration. And Obama, whose high-mindedness at times verges on aloofness, will inevitably be attacked for putting his own team's sense of superiority - the belief that Geithner and Daschle are so talented that they're irreplaceable - ahead of the normal sense of accountability that would apply to people who fail to pay their taxes on time.

"Tolerating such lapses could also diminish Obama's moral leadership, the strong voice that rang out in condemning last week's news of the Wall Street bonuses. The president's ability to call a halt to irresponsible behavior by powerful people is needed to fulfill his pledge to reform the political system....

"Obama, whose righteousness has struck a chord with Middle America, would do well to express his own outrage, rather than try to shield his nominees behind his own considerable presence."

The New York Times editorial board this morning called for Daschle to step aside: "The American tax system depends heavily on voluntary compliance. It would send a terrible message to the public if we ignore the failure of yet another high-level nominee to comply with the tax laws."

And, the Times argued: "Mr. Daschle's financial ties to major players in the health care industry may prove to be even more troublesome as health reform efforts proceed....

"Mr. Daschle is another in a long line of politicians who move cozily between government and industry. We don't know that his industry ties would influence his judgments on health issues, but they could potentially throw a cloud over health care reform."

The San Francisco Chronicle editorial board wrote: "Obama needs to remember his campaign promise to restrict the influences of lobbying. Daschle, for all of his experience and knowledge of health care, has disqualified himself from this important position because of his own personal greed. The Senate should reject his nomination."

George Packer blogged for the New Yorker: "You can't usher in a shining period of good government by fudging your principles when it matters — with those closest to you....

"For Obama, it's especially important not to have a double standard. A lot of his influence in cleaning up the corruptions of the private sector will be rhetorical. To do what needs to be done with Wall Street, he'll need all the moral authority he can muster. If he allows two tax cheats into his cabinet, he's going to lose a portion of it before his Presidency is one month old."

And then along came number three this morning.

Michael D. Shear and Ed O'Keefe wrote for The Washington Post: "Nancy Killefer, the management consultant and former Treasury official who had been picked by President Obama to serve as the country's chief performance officer, has withdrawn from consideration for the post, White House officials confirmed this morning.

"In a two-paragraph resignation letter, Killefer indicated that controversy over failure to pay taxes by two other high-profile nominees of Obama's had convinced her to decline the new president's request to join his administration. Killefer had a tax lien placed on her house by the D.C. government in 2005 because she had not paid unemployment taxes for her household help."

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