Obama admits he 'screwed up' as nominees withdraw

At the end of only his second full week in office, US President Barack Obama’s administration ran up against Washington’s unforgiving politics, as two key government nominees withdrew under a cloud of tax problems.

The developments threatened to blunt the new leader’s effort to take his economic message to the American people through a series of interviews with every national television network yesterday.

Mr Obama is trying to move a more than $800bn (€615bn) economic stimulus programme through Congress, but has so far been unable to gain the bipartisan support he had hoped would define his presidency.

The television appearances were seen as a bid to speak more directly to US voters who are feeling the pain of the worst US economic decline in 80 years.

But yesterday’s political developments served as a major distraction.

Former Senator Tom Daschle pulled out as Mr Obama’s choice as Health and Human Services Secretary, citing a growing chorus of criticism over his failure to fully pay taxes from 2005 through 2007. He has since paid more than $140,000 (€107,000) including interest.

Mr Obama, normally the picture of calm and confidence, apologised in a series of TV interviews following Mr Daschle’s withdrawal. “I screwed up,” he declared.

“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,” he said in one of a series of interviews with TV anchors.

“I’m frustrated with myself, with our team... I’m here on television saying I screwed up,” he told NBC’s Nightly News With Brian Williams. He repeated virtually the same words in several other interviews.

Mr Daschle’s departure was a deep blow to the White House because it not only cost Mr Obama his services as a Cabinet secretary, but removed him from the second important role he was to play in shepherding the administration’s hopes of overhauling the nation’s healthcare system – one of Mr Obama’s top campaign pledges.

News of the former Senate majority leader’s withdrawal broke just hours after Nancy Killefer dropped her candidacy to be the first chief performance officer for the federal government, saying she did not want her failure to submit payroll taxes for household help to be a distraction for the president. She had faced but subsequently settled a Washington city government tax payment of $946.69 (€728) on her home.

A day after saying the nominee had his full support, despite the tax troubles, Mr Obama said he accepted Mr Daschle’s withdrawal.

“Tom made a mistake, which he has openly acknowledged,” Mr 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.”

White House press secretary Robert Gibbs later insisted Ms Killefer and Mr Daschle decided on their own to withdraw.

“I think they both recognised that you can’t set an example of responsibility but accept a different standard in who serves,” Mr Gibbs told a White House briefing.

The climate around Mr Obama’s top nominees began changing when the Senate learned that Treasury Secretary Timothy Geithner had failed to pay taxes on a portion of his income when he worked for the International Monetary Fund.

Mr Geithner’s tax history was the first to raise red flags in the Senate. He had paid the taxes and won confirmation. But the stage had been set for greater Senate resistance as it became known that Mr Daschle and Ms Killefer had been caught up in similar problems.

The Obama White House has set itself for intense ethics scrutiny and was not backing down despite the reversals suffered yesterday over the pair.

In his daily briefing with reporters, Mr Gibbs insisted Mr Obama was determined to run a clean administration.

“The bar that we set (on ethics) is the highest that any administration in the country has ever set,” he said under intense questioning about the withdrawals.

Sandwiched between the withdrawals and the afternoon television interviews, Mr Obama took the highly unusual step of nominating a third Republican to his Cabinet – Senator Judd Gregg as commerce secretary.

Presidents rarely rely as heavily on figures from the opposition party to fill government slots. The other Republicans in the Obama Cabinet are Defence Secretary Robert Gates and Transportation Secretary Ray LaHood.

Mr Obama used the Gregg announcement at the White House to warn against allowing the “same partisan gridlock” to bog down quick action on the stimulus initiative.

The new leader campaigned for the presidency and took office promising to yank Washington out of decades of bitter bipartisanship but has struggled on the stimulus measure despite his unprecedented courting of opposition Republicans even before he was inaugurated.

Republicans want to reshape his massive stimulus plan – budgeted at $819bn (€630bn) as it passed the House of Representatives and rising to nearly $900bn (€692bn) under debate in the Senate.

While praising the highly popular president’s call for quick stimulus action, Republicans have been attacking their Democratic congressional colleagues for what they say is loading the measure down with pet projects and failing to provide larger tax cuts – the perennial Republican prescription for economic troubles.

Democratic leaders have pledged to have the bill ready for Mr Obama’s signature by mid-month. In his round of network television interviews last night, Mr Obama underscored the urgency, saying he lies awake at night worrying about the economy.

He told CNN that, even three months ago, most economists would not have predicted the economy was “in as bad of a situation as we are in right now”.

The president also signalled opposition to congressional attempts to insert “buy American” provisions into the legislation. He told Fox News: “We can’t send a protectionist message.”