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Tom Daschle Removes Himself from Cabinet Consideration

Aired February 03, 2009 - 13:00   ET


KYRA PHILLIPS, CNN HOST: All right, T.J., thank you so much.

And if you're just joining us, obviously, you have heard Tom Daschle has withdrawn his nomination to be the health and human services secretary. We've got Ed Henry. Dana Bash with us. This news just coming to us within about five minutes ago.

And I just received the statement coming from President Obama. I'll go ahead and read it in its entirety right now. He goes on to say, "This morning Tom Daschle asked me to withdraw his nomination for secretary of health and human services. I accept his decision with sadness and -- and regret." The president goes on to say, "Tom Daschle has devoted his life to public service and health-care reform so that every American has access to health care that they can afford."

The president goes on to say, "I had hoped that he could bring this passion and expertise to bear, to finally achieve that go, which is so essential to the progress of our economy and the well-being of business and families across our nation."

The president goes on to say in this statement that "Tom made a mistake which he has openly acknowledged." We heard that just a few moments ago. We rolled that sound from yesterday, actually. "He has not excused it, nor do I," the president says. "But that mistake and this decision cannot diminish the many contributions Tom has made to his country -- to this country, from his years in the military to the decades of public service. Now we must move forward with our plan to lift this economy and put people back to work."

Ed Henry, let me go to you and ask you a question. Do you think that this was the typical -- no, let me ask you this question first. Let's go back to Geithner and how the issues were exposed in his background with regard to taxes. He admitted it. He made it through the hearings. He got the pass.

OK. Now we have round two, Tom Daschle finding out the same type of thing. He's apologized; he's admitted it. Why is he not getting a pass?

ED HENRY, CNN CORRESPONDENT: Well, I think the climate has changed dramatically. And Tim Geithner is fortunate that his nomination was dealt with a couple of weeks ago, frankly.

Think back to last week when all of this broke. The day before that, when we first learned about Tom Daschle and the chauffeur and all of that, the president of the United States had summoned reporters into the Oval Office to blast Wall Street for over $18 billion in bonuses at a time when the American people are suffering through an intense financial crisis.

The image of Tom Daschle having a car and driver, not paying taxes on that, to the tune of over $100,000, certainly was an image this White House did not need politically.

Then you add to it the fact that this morning we were learning that Nancy Killefer, who is the president's choice to be the chief performance officer, was supposed to scour the federal budget, help shake up the government, had a tax problem of her own, and now she's withdrawing her nomination. That was ratcheting the pressure up on Tom Daschle, especially because they're going to be in the inevitable questions of whether there was a double standard, whether Nancy Killefer as a woman had to step down, but Tim Geithner as a man, now Tom Daschle as a man, that maybe they didn't have to step aside.

And in fact, just about an hour and a half ago, when the president unveiled his new commerce secretary, Senator Judd Gregg, at the very end, I shouted out to him, "Mr. President, why are so many people in your administration having a hard time paying taxes?"

And he stopped and sort of looked at me, thought about it, and I think going to the microphone but thought better of it, turned around and kept walking. What we now know is at that moment the president already probably knew that Tom Daschle had stepped down. Because as you said, this statement from the president says that earlier today Tom Daschle asked the president to withdraw his nomination. So those signals were undoubtedly being, at least privately, sent to the White House before that phone call from Tom Daschle.

And so all of this was coming to a head, and I think the politics of this has changed so rapidly since Tim Geithner's nomination was up. Tim Geithner's was in the range of $30,000 to $40,000 in back taxes, my recollection. Tom Daschle's was far more.

But I think also the climate had just changed so dramatically. This was a fight the White House no longer wanted to wage, Kyra.

PHILLIPS: So let me ask you this then, Ed. OK. Is it the -- this change that has taken place in our country, is it the Obama administration, is it the fact that he's come forward and said, "I'm taking ethics to a different level. I'm not -- I'm going to put limitations on lobbyists. I'm going to do all types of different things within this administration that is going to be completely different from any other administration because our country is in big trouble." Is it that? Is it what Obama represents within his administration?

Or, is it Wall Street and the fact that greed has been exposed in ways that we have never seen before. We're finding out things about people, whether it's Madoff to other types of banking industries, and so that has influenced this, as well? Or is it a combination of both?

HENRY: It's a combination of both, Kyra. Because as I mentioned, the president throwing out the charge that it was irresponsible and the like for Wall Street people to be accepting big bonuses during this financial crisis, that clearly had to play a factor. Then it was revealed that Tom Daschle had this car and driver, didn't pay taxes on it.

But then secondly, you're right. On his first full day in office, the president, with great flourish, signed a new executive order saying he was going to have the toughest regulations on lobbyists of any administration.

We need to point out: Tom Daschle has never been registered as a federal lobbyist, but he has been working at a lobbying firm, Alston Bird, here in Washington, with a salary of some $1.2 million a year.

Just yesterday Robert Gibbs, the White House press secretary, took a question at the podium about that kind of cashing in on access, the appearance that, even if you're, you know, technically not registering as a lobbyist, clearly Alston Bird, the firm, was using Tom Daschle's connections in the Senate. So however you call and how you characterize him, that could be seen as a problem when you stack it up against the change this president is promising.

Also, the fact that some top officials other than Daschle have been getting -- seeking waivers to get around the president's own tough rules, cracking down on lobbyists. He's brought in some lobbyists in senior positions.

So all of this is coming to a head. And I think, clearly, the fact that the president is talking so much about shaking up Washington, this whole appearance of the Daschle situation just blew up in the White House's face, frankly, Kyra.

PHILLIPS: And we're hearing now from Tom Daschle now, Ed. Stay with us.

Dana Bash, what's the statement saying?

DANA BASH, CNN CORRESPONDENT: I actually believe that we just got it. I will pull it up on my BlackBerry and here. I think that -- here we go. I'll read it to you.

He said, "I've just informed the president that I am withdrawing my name from consideration for secretary of health and human services." He went on to say, "To be chosen by President Obama to run the Department of Health and Human Services and to lead the reform of America's health-care system is one of the single honors of an improbable career."

But then he went on to say, "But 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. Right now I am not that leader, and I will not be a distraction."

And then he went on to say that "the focus of the Congress should be the urgent business of moving the president's agenda forward." So there you heard Tom Daschle himself in this statement that we are just getting on our BlackBerries, Kyra, basically saying that he believes that he certainly has the qualifications and he made mistakes, but he understands that he is, in his words, a distraction right now, which is why he withdrew his nomination.


And if you're just tuning in, we just want to bring you up to date quickly. We're hearing a statement there from Tom Daschle. We've also heard from the president of the United States. Ed Henry covering that beat for us. Tom Daschle withdrawing his nomination to be health and human services secretary. This just came across within the past ten minutes. It came out through the White House, our Ed Henry bringing it to us, the president going forward saying he's accepted the withdrawal with sadness and regret.

As you know, Daschle has been battling for his nomination since it was disclosed that he failed to pay more than $120,000 in taxes, including that driver and car. He said that he's withdrawing because he's not a leader who has the full faith of Congress and will be a distraction, as we heard, from our Dana Bash.

Gloria Borger now joining us with the breaking news. It happened within the ten minutes.

Gloria, what's your take? We've been covering, obviously, the news as it's been developing, giving a little background once again to our viewers about what Tom Daschle was battling.

We've heard now from Tom Daschle, also the president. The president extremely disappointed.

What do you make of what is happening, I guess, day by day within all the, I guess, the glory surrounding the new administration? We're seeing the challenges and the struggle, as well. This is not going perfectly for the new president.

GLORIA BORGER, CNN POLITICAL ANALYST: You know, I think it's very difficult for President Obama. You came to Washington to change the way Washington does business. And in the case of Tom Daschle, who's a close personal friend of his, you have a story that's made it look like it was just another insider doing business with another insider. And that's damaging to Barack Obama.

And I think Tom Daschle, being an honorable man, knew that he was, as he put it in his statement, a distraction to the new president, and that he didn't want to stay that way. He was facing another day of hearings before a very divided committee. Suddenly, his nomination had become very partisan. Health care is one of the new president's priorities.

And Tom Daschle's been around Washington for a while, and I think he knew that it was probably time for him to pull the plug on this, on his own. By all accounts that is what he did, that the president did not nudge him at all. But he knew that, you know, he just didn't want to stand in the way. And I think -- I think that this could have become a real problem for Barack Obama.

PHILLIPS: And like you say, the president has said he wants to change the way that Washington does business. I remember the very first day that he spoke to his staff, Gloria, and he mentioned that.

And he also said, "I'm going to do away with the way Washington has dealt with its secrets, the secrecy within Washington."

So what is your sense, as you sort of monitor the first almost two weeks here, I guess, of his presidency? Is it what's happening? And I asked this of Ed Henry, as well. Is it what's happening on Wall Street and what's sort of being exposed beneath all the greed and corruption there that's sort of parlaying into politics now? Or is this Barack Obama taking on a totally new approach to knock out sort of the old-school ways of doing politics?

BORGER: You know, like most things that happen in a campaign, Kyra, it's easier said than done. It's easier to promise that you're going to change the way Washington does business than to come to Washington and change Washington. And I think that's what -- that's what Barack Obama is up against right now.

Not only that, but of course he's got to deal with the additional problems presented to him by the Wall Street bailout, a stimulus package in which he's trying to get Republican support. And he can't afford to have this kind of a problem on his plate right now.

You know, one of the first things he did, Kyra, when he came into office was sign very, very strict ethics rules, getting rid of the resolving door in Washington.

So, you know, this is really a matter of perception. And I think he -- one of his good friends had to sort of step aside, because he didn't want to stand in the way of changing the tone in Washington. And I think it's probably pretty sad for folks inside the White House.

PHILLIPS: Gloria, stay with us. Sad is probably an understatement. Right?

BORGER: Right. Absolutely.

PHILLIPS: If anything, they wanted to keep going and dealing with Timothy Geithner.


PHILLIPS: They thought they got over one hump. Here they are dealing with the second.

Gloria, stay with me. Apparently, our Dana Bash getting a number of statements through all her sources, now hearing from the financial committee chair.

Dana, what you got?

BASH: Well, I think this is very telling in terms of what Gloria was just talking about, that this was a problem of optics and perception for the White House, much more than the question of whether or not Tom Daschle actually could have gotten the votes to pass and become the secretary of health and human services.

Because we're hearing from Democrats already that they believe that he did actually have the votes to pass, and he probably would have gotten through. It would have been tough; it would have been bruising, but he could have likely made it.

In fact, that's precisely what we're hearing from the chairman of the Senate Finance Committee, Max Baucus. He just spoke to our Ted Barrett. And he said it was unfortunate, tragic, regrettable. He called Tom Daschle a really good man.

And again, he said he was surprised, because Max Baucus was ready to fight very hard for Tom Daschle, as we saw yesterday. You see that picture there on the side of the screen, Tom Daschle standing in front of about a half-a-dozen of his fellow Democrats, who made a decision that they were going to come out and that they were going to sing his praises and say that he made a mistake, but they were going to fight for him.

And this is just one statement we're getting.

You know, I spoke with, for example, Senator Claire McCaskill just before this news break -- broke, really minutes before, Kyra. And she was somebody who actually campaigned against lobbyists before she came in here. She never served with Tom Daschle.

And she said, "Look, this is going to be a bitter pill for me to swallow." And she said she's working on swallowing it, meaning that she was another Democrat who said that it was going to be tough, but she likely would have done it.

However, we were also hearing from Republican after Republican that this was problematic. Again, not just on Tom Daschle's tax issue, which was a big, big problem, but also because of the work that he had done since he was defeated from the Senate in 2004, work he'd done for health care, the health-care industry that was going to come up in -- in his confirmation hearing. So that's the kind of dynamic that Tom Daschle was facing here.

And I think it is, again, important to underscore that, in talking to Democrats, because they have such a big majority here in the Senate, it was -- it was likely that he could have gotten through. But it was probably, obviously, just a big perception problem that the White House did not want to fight anymore.

PHILLIPS: Dana, thanks.

Dana brings up an interesting point. John King, I know we have you with us now. And maybe I sort of move aside from the tax issue for a moment. And Dana points out, there are a lot of politicians in Washington who sort of, you know, run this fine line with this relationship between government and industry. And if you look at Tom Daschle's resume and the connections he has had, you tend to wonder, OK, there are a number of other politicians out there that have had the same sort of cozy relationship. And you wonder, OK, is this something that is going to be tolerated in any way, shape or form?

JOHN KING, CNN CORRESPONDENT: Well, Kyra, you make a great point. Because remember, Barack Obama has one thing right now, which is huge goodwill and support from the American people. Why does he have it? Even those who didn't vote for him view him as new and different and are counting on him to change the way Washington works.

And the last thing he can afford right now -- he's asking the American people, "Stay with me. The unemployment rate is going to go up in the short term, not down. It could be years before the -- a year or more before the economy starts to turn itself around. And as all that happens, as you're struggling at home, I want to deal with some pretty big, difficult issues in Washington." The last thing he can afford, Kyra, is to be seen as a hypocrite.

He promised to do things differently here in Washington. Well, his treasury secretary, the man who runs the IRS, had a tax problem. Just this morning, the woman he wanted to be the chief financial officer for the government withdrew because she had a tax issue. So was she going to withdraw, to then have another man join the Obama cabinet who had a tax issue?

So the perception problem, the integrity, the credibility, the credibility issue with the American people, for him to be able to say, "Trust me. This is going to be a new and different way of doing business in Washington," was being undermined by this.

And as Gloria noted, I think Senator Daschle understands politics. He gets the math. He would have probably been confirmed in the Senate, as Dana says, but what is the price that Barack Obama, the new president, might pay down the road?

Just today, Kyra, you know, Barack Obama is president in part because of a revolutionary campaign on the Internet. There's an old Tom Daschle ad now being run around an e-mail. We're all getting it. Every reporter is getting it. It's an old ad from his days in Congress, and he's driving around in an old Pontiac, saying, "In a town -- in a town where all these people have limousines and drivers, Tom Daschle still drives to work every day."

So this was becoming a huge political problem for the new administration. And Barack Obama proved this during the campaign. When he has a problem, he cuts his losses and moves on.

PHILLIPS: And it really makes you wonder, the longer you've been in politics, will Barack Obama be able to find the right people with the right kind of experience, the right kind of background that are just ethically clear?

KING: He set -- he is a victim of his own standard. And I don't say that to be cynical. He set a very high standard, and this is an example of him being held accountable. In the halls of Congress, Republicans were preparing to brace themselves for this fight, even though they knew Tom Daschle would get through. Late-night comics have been having a field day with these tax issues.

But on the specific point of Tom Daschle, why was he picked? Because, Kyra, they thought he was capable of doing what the Clinton administration failed at, which was, because he was a member of the club in the Senate, trying somehow to bring the vastly competing sides of the health-care debate together and to finally get some sort of comprehensive health-care reform that would help the 47 million or nearly 50 million Americans who don't have health insurance. He was picked for a very specific reason, because of his insider skills in the Congress. And those skills will be very hard for the new president to replace, which is why this is such a difficult choice for him.

But the politics of this, again, Dana I think said it best earlier, this was more a President Obama problem than a Tom Daschle problem, because this president needs to keep the foundation of trust and credibility he has with the American people because he has so many huge challenges.

PHILLIPS: Do you know what year that Pontiac was? He probably should have kept it. It might be worth some money now.

KING: That's not necessarily fair to Tom Daschle in the sense that that was way, way back when he was in Congress. But Tom Daschle knows as well as anybody in this town that politics is not always fair, Kyra.

PHILLIPS: That's so true. Neither is our business.

John King, thank you so much.

KING: Thank you.

PHILLIPS: We are awaiting the White House briefing. I'm sure Robert Gibbs will have a lot to say about this issue. We will take that live as soon as it happens.


PHILLIPS: The road to recovery. Is it really a road? A bridge? A sewer? Are houses the key to getting our financial houses in order? You can find "yeses" to all those questions in the Senate today, where issue No. 1 is economic stimulus at the lowest possible cost.

Senators are trying to streamline a package that tips the scales at $885 billion, tens of billions more than the package that cleared the House without a single Republican vote. Democrats want to increase spending on infrastructure, public works projects that add jobs, while Republicans want to stimulate home buying and borrowing.

Well, you may have just seen live here on CNN, President Obama today implored lawmakers to avoid partisan gridlock. For his part, the top Senate Republican insists that nobody is trying to block a recovery plan, but that doesn't mean that anybody's giving ground yet.

On Groundhog Day plus one, Republican Chuck Grassley raised the specter of a never-ending crisis.


SEN. CHUCK GRASSLEY (R), IOWA: On this bill before us, we need to learn from "Bill and Phil's Adventure." We cannot, and we should not, legislate in a hasty manner and place ourselves in an infinite loop of repeating the same exercise.

Democrats and Republicans and the president need to get this right, particularly in a time of the terrible economic recession that we're in. We cannot casually deficit spend and ask American taxpayers to clean up the fiscal mess with high taxes down the road.

SEN. BARBARA BOXER (D), CALIFORNIA: The deepest recession since the Great Depression. Jobs being lost at 500,000, 600,000 a month, and all of a sudden, some of our Republican friends have said, "Whoops. Now that we can't give tax breaks to the people who are earning over $1 million, and now that the Iraq war is winding down, we're not that interested in spending money."


PHILLIPS: Supporters of the "fix housing first" approach say that's what threw the economy off the rails, and that is what will get it back on track.

The real-estate Web site Zillo points out that the median U.S. home price last year was just over $192,000. That's an 11 percent drop from 2007. For the year, a staggering $3.3 trillion in home equity evaporated.

Roughly one home sale out of 5 last year was a bank repro -- repo, rather. More than 1 in 10 were so-called short sales, where the sellers owed more than the homes were worth. That's also called being under water, and it tends to lead to more foreclosures, as you know, which drives prices down even further.

Well, the president has set aside some time for CNN's Anderson Cooper. They're talking today, and there is obviously a lot to talk about, especially considering the news about Tom Daschle. You can see that interview tonight on "AC 360." That's at 10 p.m. Eastern right here on CNN.

And you've seen the new White House Web site? Well, Senator Kilmary (ph) or Grover Cleveland wouldn't know what to do with themselves. But the smart-phone savvy President Obama wants your feedback online. And we're holding him to it.

What questions do you have for the administration? And is there something you're not hearing the press ask the president? E-mail me your questions at We're going to make our daily visit to that site. And I'll type in your questions, and hopefully, we'll get some answers from the White House, and I'll read them to you directly.

And the press will be asking more questions at 1:30. That's for sure. That's when the next White House briefing is scheduled. Our cameras and microphones are ready when they are. We'll have that for you live in just a bit.

But first our top story today, and that was the news about Tom Daschle withdrawing his nomination to be health and human services secretary after issues over his taxes. John King still with us there in Washington.

What does the president do now?

KING: Well, he has to try to move on, Kyra. And as we were talking a little bit earlier, Tom Daschle debuted at the White House as perfect for this job. He was not just going to be the secretary of health and human services. Unlike any other cabinet member, he was going to also have an office in the White House so that he could shepherd health-care reform through the Congress.

And they thought, because of the memories of what happened to Hillary Clinton in the Clinton administration back in the early '90s, they saw how that plan collapsed. And they wanted somebody who could work the inner workings of the United States Senate and across the halls in the House, as well, to try to bring everybody together on the most difficult policy question or one of the most difficult policy questions in Washington.

Now he is gone, stepping out because of this tax problem and leaving a big hole in the administration. It's a critical job, and he was viewed again as what they thought was the perfect person for that job. It will be quite interesting to see where they go from here and whether whoever gets this nomination next for the very important job as health and human services secretary, also will have what Daschle wants to have, which is that office in the White House in a new health-care reform office.

So it's an embarrassment for the president. Tom Daschle himself said yesterday it was an embarrassment from him. The politics of this have just turned against him.

And again, individually, Tom Daschle could have won the votes with his old friends in the United States Senate. The bigger issue was how much, to what degree was this undermining Barack Obama's central promise when he ran for president, which is that he would change the way Washington works. The lobbyists wouldn't have the influence; the old rules wouldn't be in play.

He already has a treasury secretary, the man who heads the IRS, who admitted paying more than $30,000 in back taxes. He had another nominee withdrew from consideration early this morning. I think Tom Daschle could see the writing there, that the perception issue was well beyond whether or not he could have been confirmed to do his job, Kyra.

And when you're a new president in your second week in office, you need to keep your credibility and your trust and political support from the American people. And that is a bigger factor in this decision than Tom Daschle's specific individual problem.

PHILLIPS: OK. Let me -- let me ask you this question. You bring up some interesting words: "trust," "Undermining." You and Dana have both talked about the fact that the president and Tom Daschle are good friends; they've known each other for a while. So -- so just thinking of the word "undermining."

Was there -- could there have been a point that Tom Daschle knew this was probably going to be an issue? And what happens behind the scenes? You just kind of hope it doesn't come up? Do you mention it and hope to get through the process? Do you -- I mean at what point do you admit to your friend, the new president of the United States, "Boy, I know I've got the experience. I know you want me to do this. I probably could do a pretty good job, but I have this skeleton"?

KING: They -- they had those conversations, Kyra. Tom Daschle, it just came to his attention back in June of 2008. They knew at the White House he had this issue. And then they saw how the Geithner confirmation process played out. And it became a cumulative question of what would the risk be.

And again, Tom Daschle could have worked his way through this. But consider the moment and consider the specifics of the tax issue. Hundreds of thousands of Americans are being thrown out of work. Corporations are closing down. They're shedding jobs, whether it's Home Depot, whether it's Macy's, whether it's Caterpillar, where I was last week, Boeing. And these are Americans who are about to get on unemployment. And they're -- it's the little guy. The little guy is supposed to be the guy the Democratic Party represents.

And they're watching Tom Daschle have to pay more than $100,000 in back taxes because he had a car and driver that he didn't declare as income. That is a "this does not compute" to the little guy sitting in Peoria, Illinois. And that is the person Barack Obama needs to stay with him. Now, it also happens to be the person who probably needs Tom Daschle's skills in the health-care debate. So it is a trade-off. We have a lot of talk of trade-offs here in Washington.

But this one was reaching the point, if you watch late-night television, if you go around the Internet, where it was becoming too much of a joke for a president who has a long list of serious problems and needs to keep that basic trust with the American people. It was undermining a central premise of his campaign. And they clearly decided, despite the high price -- losing somebody of great caliber and great skills inside Washington -- that it was possibly going to create a bigger problem outside of Washington.

PHILLIPS: So Dana Bash, if you look at what's happened, then, to our economy, and you go to Wall Street, and you look at how Wall Street, hopefully, is going to be cleaned up, so will the cleaning up of Wall Street actually help clean up Washington, which therein lies what we all want, and that is a new trust in Washington and politics in general, and the new administration? BASH: Boy, that is certainly the hope, I think it's fair to say, among -- among everybody here. But that is still an open question. And I think we're seeing a lot of the issues with regard to the economy.

We're seeing senators grapple with it as we speak on the Senate floor with regard to spending and how much does the American people -- or do the American people trust us to spend nearly $1 trillion of their money to stimulate the economy and whether or not that's going to work. That is sort of the broad debate that is, frankly, going on when you get past all of the amendments and the dollar signs.

But I wonder, if you will, Kyra, just go back to the issue of Tom Daschle. Because I think it's also interesting to note from the perspective of Capitol Hill and of the Senate that -- to remind our viewers that this was an extraordinarily difficult thing for many of these senators, because Tom Daschle was one of them. He was the leader in the Democratic Party for the Senate. He was the majority and minority leader for a total of ten years.

And I just want to mention that because I want to give you a couple of quotes that our Ted Barrett is getting from senators as they learn about this news, Kyra. Senator Dianne Feinstein, who was on CNN this weekend talking about how much Tom Daschle would be OK, she said she was shocked. Senator Tom Harkin from Iowa who served for years and years with Tom Daschle, he told Ted Barrett that he was too emotional to talk about the fact that Tom Daschle had withdrawn. And then he went into the cloak room inside the Senate chamber, we think perhaps to take a call from Tom Daschle.

So, those are the kinds of things you're hearing from Democrats. And it's actually part of the reason why it made it so complicated, because, you know, in talking to senators over the past couple of days on this, Kyra, especially Democrats, one of the questions that I've had and others have had is, you know, are you giving Tom Daschle a bit of a pass on this major issue that he's had because he's one of you, because he is a member of the club. And it is something that these senators have had to grapple with.

On the other side, I want to actually play something for you from a Republican senator on the Senate Finance Committee, Senator John Ensign. I spoke with him before Tom Daschle decided to withdraw. And he was talking about the kind of questions that he would have if this hearing would have gone on next week. Listen to what he said.


SEN. JOHN ENSIGN (R), NEVADA: I think that Tom Daschle's nomination presents real problems for our new president. This is I think the third or fourth person that's been brought up for his administration that has serious tax problems, and the tax problems that Tom Daschle has are very serious in that he was on the tax- writing committee almost the whole time that he was in the Senate.

These are simple laws that anybody who's in business understands. He should have complied with them. The fact that he didn't pay his taxes until just a couple of weeks ago is very problematic. His explanation to me seems to have some holes in it, and I think that we're going to ask him some very, very tough questions next week when it comes to the Senate finance hearing.


BASH: So, that was the kind of thing that Tom Daschle and the Obama administration, much more importantly here, had in store for them. And I just happened to be standing with John Ensign off the Senate floor when we got the news on our BlackBerrys about Tom Daschle withdrawing. And I went up to him, said what do you think, without missing a beat, based on what I saw, that's the right call.

You definitely are seeing, I mean, let's be honest about it, a partisan divide over Tom Daschle, but it would have been a very, very, very tough hearing for Tom Daschle next week and one again that clearly the Obama administration just didn't want to deal with, and they wanted to get past regardless of the fact of where the votes would have been. And even talking to Democrats up to just a few moments ago, Kyra, they still believe that Tom Daschle probably would have gotten through had he not withdrawn his nomination.

PHILLIPS: OK, well, Dana, I can tell you right now that, you know, we plugged this segment that we're going to be doing. We're going to link in to the White House Web site and actually send in questions that our viewers want to know. Say, for example, they don't hear the questions in the White House briefing.

And I am telling you right now, we are getting flooded with e- mails and so many about the tax issue. I mean, just to give you an example, this one coming through from one of the writers, says, OK, let those who have no fault throw the first stone. I say let's release all the IRS auditors on the Congress members and audit each one of them. If found to be guilty of any tax problems, I hope the media forces them out of Washington the same way they are scrutinizing Obama's Cabinet. We're all hypocrites, the news media included. This is coming from Johnny A.

But that's just one example. I've never seen so many people respond so quickly, which goes to show, Dana, that there's this -- I think a lot has to do that there are so many Americans standing by waiting to see what Obama's going to do with regard to changing the way government -- or politics operates in Washington.

BASH: You're exactly right, and it's what you and John were just talking about. And I think this gets to the heart and to the core of why Tom Daschle withdrew his nomination just a few moments ago. And it is because of that question, that overarching question about Barack Obama and is he here to change Washington.

We've been talking about it with regard to the stimulus package and why didn't he get any Republican votes and why didn't he get any Republican votes, and will he get any Republican votes this week in the Senate. And those are important issues in terms of the bipartisan tone with regard to the substance of what they're doing here in Washington, which is critically important. But beyond that, it's also the way people operate, the way people function in Washington that there was a lot of hope that Senator Obama would change that. And, you know, fair or not, what Tom Daschle did or didn't do in paying his taxes, this has taken on a life of its own, and it's something that really ran counter to the whole theme of the Barack Obama campaign and his presidency.

PHILLIPS: And Dana, my e-mail's taking on a life of its own -- God help me! Dana Bash, on the Hill, thanks so much. Stay with us. John King also staying with us from Washington.

Gloria Borger, I'm getting flooded with these e-mails. Let me just throw one thought to you here. This Matthew, sending an e-mail saying he was thrilled to see the president lay down the law firmly in the first few days in office. It was so refreshing. Then, poof -- where did the change go? Where did the transparency go?

It's such a sad statement to think because we have such a smart man to head the IRS that it deserves a free pass. Then you go back yet with another tax problem with somebody else. Maybe you need to investigate the IRS. You might find that we do need a stimulus after checking all those in the White House.

I mean it's just amazing how people are responding to this.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Right, well, because people are hurting, and they are paying their taxes, and we're living in a hurting economy, and they want to make sure that folks in Washington are accountable just the way we hold ourselves accountable.

And again, as John King said earlier, the president set a pretty high bar for this. And he did come right out of the box and set these ethics rules. And so he cannot afford to be seen as a hypocrite here. And so the public is angry. I'm sure there's a sense -- you know, once you have a few of these things, you tend to kind of see a pattern. And that's something that the administration clearly feels that it needs to nip in the bud, right now. Because it's got a lot of other business to conduct.

And these things have a way of kind of seeping in to the water here, and they don't want that to happen. They need to pass a stimulus package. They need to do something about bailing out the banks. They need to have the trust of the American public that they will oversee all of this money in the right way. Everything else gets in the way, and they cannot afford to have that kind of distraction right now, Kyra.

PHILLIPS: Another -- a couple of folks e-mailing in, Gloria, saying, why does the president have to go after people that have been in Washington working in Washington, acting as politicians? Why can't he go outside of Washington to bring people into his administration? Which is an interesting point.

BORGER: Well, it is.

PHILLIPS: I mean, you want experienced people, but it's an interesting point and a number of people are asking it here.

BORGER: It is a very interesting point. For example, his education secretary, he took someone he knew very well from the City of Chicago. But I do think that what he found in Tom Daschle -- lets take Daschle's case in particular -- is somebody who knew the health care issue well, who could not only navigate Capitol Hill, but who could be somebody standing at his side, inside the White House, helping him navigate, because sometimes you need someone who knows how things work in Washington.

So, it's a very delicate balance, Kyra. I think it is a very good point. You have to have a combination of folks who understand the way Washington works and want to change it, and folks who come outside of Washington and who bring in fresh blood and a new way of looking at things. I think he's looking for a combination of that. I think in Tom Daschle he took the insider route, and that didn't work out.

PHILLIPS: All right, Gloria Borger, thank you so much. I'm told we're going inside the briefing now. We're waiting for Robert Gibbs to step up to the mike. Our Ed Henry inside the briefing room there. Ed, I don't know if you've been able to hear our conversation, mine with Gloria, with Dana and also with John King, but we've started -- we had this idea since the White House came out with this new Web site, this revised Web site, I should say, and you can actually send in your questions and your e-mails, so we thought, OK, we'll start doing that on a regular basis.

Say for example, our viewers don't hear the kind of questions they want to hear tossed at Robert Gibbs there, that this would give us an opportunity to send their questions directly into the White House. And Ed, we are getting flooded and flooded -- I mean, with hundreds and hundreds of e-mails. It's not stopping.

Which really goes to show -- and Gloria brought up this point -- that with this new administration and with Barack Obama coming forward talking about change and how he's going to do things completely different in Washington, get rid of the secrecy, get rid of all the advantages that lobbyists have had and clean up the issues with regard to ethics, there are a lot of people expecting a lot from this man.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: There are. And the president obviously has raised the bar himself on his first full day in office, signing that executive order, cracking down on lobbyists and saying that his administration would have the strongest ethics of any before it.

Certainly raised the bar, certainly has critics now wondering why people like Tom Daschle who, after leaving the U.S. Senate, certainly used his connections in Congress, even though he wasn't a registered lobbyist, to become a real power player in town, earn a lot of money, as we saw not just with a lobbying firm here in D.C., Alston Bird, but also this equity firm in New York which tripped him up because of the car and driver.

So, the president has set the standard very high, and the question is now whether he and his administration will live up to that standard. And that's why there are so many questions being raised right now, Kyra.

PHILLIPS: So, you know, should he have set the bar that high? Is he putting himself in a dangerous situation here? Is he setting himself up for maybe failure that he might not have expected?

HENRY: Well, it's up to the president to set the bar as high as he wants. He made that decision during the campaign long before he was elected that he, you know, ran on change, said that he wanted to shake up Washington, and so now he's obviously trying to live up to that standard. And as Gloria was pointing out, it's easier said than done, because once you come into Washington and you want to change things, you need a combination of people who are insiders like Tom Daschle who know how the system works, frankly, and a combination of some fresh blood who maybe wants to shake things up. But finding that balance can be very difficult, Kyra.

PHILLIPS: Let me ask you this, Ed. And you know, tell me whatever you know with regard to the vetting process. I'm getting a number of e-mails here, this one coming from Mike Castro (ph) saying, given the tax problems with three nominees, has there been any change or any plans to change the vetting system?

HENRY: That's a good question we'll have to ask. We haven't heard in the last 24 hours whether they've made changes, but I think an important point on the whole vetting process, because we had heard the administration brought in tougher standards, is that your system sometimes is only as good as the people who are complying with it. And as John King I think was mentioning a moment ago about Tom Daschle, that he was talking to his accountant about it back in June but didn't tell the obama people until much later. So, I think I see Robert Gibbs right now.

PHILLIPS: OK, perfect.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I got tired of watching you guys all do your live shots. Just a couple of quick housekeeping things, and we'll do some questions. The president spoke -- has spoken today with three more Republican governors who I believe have signed a letter in support of the economic recovery plan that's winding its way through Congress.

He spoke with Governor Crist of Florida, Governor Schwarzenegger of California and Governor Rell of Connecticut. Again, they signed a letter, part of 19 governors that signed a letter in support of an economic recovery plan that they understand will help them make it through tough budget times so that they don't have to cut valuable services like health care and public safety. That will put people back to work and create more than 3 million jobs, as well as get our economy moving again. So, he made those phone calls earlier today, and with that I'll take a few questions. Yes, ma'am.

QUESTION: Thanks, Robert. Why the about-face from here on Tom Daschle. Yesterday the president said he absolutely stood by him. Today he accepts his withdrawal of his nomination. GIBBS: Well, let me step back and do a little bit broader answer. We're at a critical junction -- juncture in our nation's history, at a crossroads economically. And the president has a robust agenda to deal with many of those problems. As Senator Daschle said in the statement that we released, and told the president on the phone, that he did not want to be a distraction to that agenda.

Senator Daschle has served this country for almost three decades with distinction, and I think America can be proud of that service. The same is true for Ms. Killefer. I think they both recognize that you can't set an example of responsibility, but accept a different standard in who serves. They both decided and recognized that their nominations would distract from the important goals and critical agenda that the president put forward. Each joined in an effort to change this country. Senator Daschle's case, to help more Americans get affordable health care, to get our economy moving again, to institute some fiscal responsibility and some fiscal discipline.

The important work that the president does on those agenda items continues here today. They realize that that agenda and the president's call for change was more important and did not want to be a distraction.

QUESTION: That doesn't say who decided that this was the best move, and then if I could just follow up, are there other nominees out there with tax problems that we don't know about?

GIBBS: The president is quite confident in the people that serve in this White House and serve in this administration, that we've put a standard of ethics and accountability that's unseen and unmatched by any previous administration in our country's history. Again, Senator Daschle, as relates to your first question, Senator Daschle decided to remove his name from consideration and remove his nomination for secretary of health and human services. Jeff?

QUESTION: What about the second question?

GIBBS: I'm sorry.

QUESTION: Are there other nominees with tax problems?

GIBBS: I think the president's confident in the people he's chosen to serve in government.

QUESTION: Question on two issues. First, to follow up on Daschle, what is your time frame for finding a new secretary, and will this withdrawal affect any of the appointments to other health-related areas like the FDA and the surgeon general?

GIBBS: No. We're working on nominees for both of those positions. Obviously, families all over the country have -- understand the importance of getting somebody at the Food and Drug Administration who will set forth a regulatory structure and -- that protects American families, whether it's the medicine that they take or the food that they eat. We've all been reminded of that more so than ever just in the past few weeks as it relates to the contamination of peanuts that are affecting millions of people. I thought about it the other day when I was making a sandwich for my son. In terms of nominees for each of these positions, obviously, the administration is looking for replacements as we speak.

QUESTION: Question on another issue, just while I've still got your attention, on Iran today, the satellite launch from Iran. How does that affect President Obama's attitude about reaching out towards that country?

GIBBS: Well, obviously the White House has seen reports on Iran. Efforts to develop missile delivery capability, efforts to continue on an illicit nuclear program or threats that Iran makes toward Israel and its sponsorship of terror are of acute concern to this administration. The president is clear that he wants Iran to be a responsible member of the world community.

Again, I would underscore the responsible, that with that goes responsibilities. The actions -- this action does not convince us that Iranis acting responsibly to advance stability or security in the region. All of this continues to underscore that our administration will use all elements of our national power to deal with Iran and to help it be a responsible member of the international community.

HENRY: Robert, back on Daschle, you said a moment ago that both Daschle and Killefer realize there was a new standard of responsibility. How do you explain then sticking with Tim Geithner, who has some $34,000 in back taxes, and standing behind him for treasury secretary, because Ms. Killefer had much less money in taxes that she owed.

GIBBS: Mr. Geithner's gone through a process, Ed, that -- he's gone through the finance committee, he's gone through the full Senate with bipartisan support and serves --

HENRY: But shouldn't the principle and not just process, but shouldn't principle guide it or --

GIBBS: Well, the process has guided Mr. Geithner to be the secretary of treasury of the United States of America, a position he was approved for by the Senate with bipartisan support and serves him today.

HENRY: But what happened to the -- there was sort of -- everyone was holding it up, especially in the media, as a vaunted vetting process. It seems to have hit some bumps. How do you explain what happened to the vetting process, and are you making changes to it because of what's happened and asking people more questions about taxes, for example?

GIBBS: Well, again, the president has confidence in the system. The president has confidence in the nominees that serve his administration. We're always looking for members and people that want to serve to advance an agenda that provides more affordable health care, that gets our economy moving again. Obviously, as it relates to the positions that withdrew their nominations today, we look for good people with records of distinction that can serve in those --

HENRY: Then what happened to the vetting process?

GIBBS: The president has confidence in the process.

QUESTION: Robert, two questions. One on the Daschle issue, you talk about an era of responsibility. We talked about that yesterday. Is there anybody at the White House taking responsibility for what has been a very messy confirmation process for Richardson, Geithner, Senator Daschle and Nancy Killefer?

GIBBS: Well, we all take responsibility. And the president takes responsibility.

QUESTION: OK. And then a follow-up question -- not a follow-up question, a new question, which is, there are a lot of military experts who think that the recent incursions into Pakistan constitute a new and separate war that the president should address the nation on, and not just an aspect, a side war in Afghanistan. Does the president view the new CIA attacks in Pakistan as a new war?

GIBBS: I haven't seen those reports, and I'm not going to comment from here on intelligence matters. But I have not seen the reports that you refer to. Yes?

QUESTION: Is the White House at any level considering Leo Hendry as a possible commerce secretary throughout this process as recommended by Tom Daschle?

GIBBS: The president nominated a commerce secretary today, Senator Judd Gregg, who we believe will serve with distinction, shares the president's view on getting our economy moving again. I don't know -- I have no news on that, or no information on that. Again, the president has made a selection for that position today, announced that selection, and we look forward to his speedy confirmation.

QUESTION: Follow up. Do you believe that the Daschle situation has been compounded or confused or slowed by the fact that there are so many of his top advisers serving in President Obama's administration? Did that cloud any judgment here?

GIBBS: No. Chip?

QUESTION: If there's a new standard of responsibility, and it's the president's standard, why wouldn't he have been the one to make the decision to say, this guy doesn't meet the standard of responsibility? Does he wait for the nominee say, I don't meet that standard?

GIBBS: I'm not going to spend a lot of time up here today looking through the rear-view mirror or playing Monday morning quarterback on all this. The president understands that each of these individuals has served this country with distinction, appreciates that service. Each asked to withdraw their nomination. And the president on each occasion accepted those withdrawals.

Each also decided they couldn't distract from the agenda that the president was pursuing, that the agenda that he was pursuing is bigger than them, it's bigger than me, it's bigger than any of us that serve at the pleasure of the president of the United States. That's the work that continues here at the White House. Work that started many days ago, and will continue both today and tomorrow. Chuck?

QUESTION: So, if Senator Daschle hadn't withdrawn, the president would have stuck by his nomination?

GIBBS: You know, I would love to play hypothetical games with you all day long, but --

QUESTION: Well, it's obviously --

GIBBS: Well, again, Chuck, I think you were distributed through fairly rudimentary means the decision of Senator Daschle to step back. And that's where we are.

QUESTION: And on the meeting with congressional Democrats last night, there was a couple of news accounts that described that it was a terse meeting or that it was a little bit of a -- not a rallying of the troops, but of you've got to get this done. Are those fair descriptions of the meeting that the president (INAUDIBLE)?

GIBBS: I think the meeting was not described to me as tense or, I forget some of the adjectives used to describe it or I've seen describe it. The president's meeting with Democrats, both from the House and the Senate, was to talk about how to get the best bill quickly to his desk. The deadline --

QUESTION: He said it can't get over $900 billion, and you're going to have to give up some of your spending?

GIBBS: Well, I'm not going to get into a back-and-forth on that. I think the president thought the meeting was productive, that they made progress toward the goal of having the strongest stimulus package possible that will put -- I'll try to give you the best answers I can, Chuck.

QUESTION: All right.

GIBBS: And you can -- we can ask questions. The president thought, if I can, just, you know, thank you. We need lights like those debates. At least wait for mine to turn yellow. The president thought the meeting was very productive. The president thought the discussions that he had, the discussion that he had with Governor Douglas, the discussion he's had with Republican governors today, the discussion he's had with Democratic members of Congress he's going to see more this week, all of these discussions are working toward the strongest possible package to put people back to work.

I do think, again, I think people have lost sight of what the legislation does. It creates -- we think it will save or create more than 3 million jobs and get our economy moving again. And that if we fail to act, or if this town fails to act, the recession will be far worse and far deeper than it is right now.

And many in America are facing dire consequences. Again, we'll get statistics later this week that demonstrate how many people lost their jobs in the previous month. I think that will continue to underscore for people how important it is to get something to the president's desk as quickly as possible.

QUESTION: Robert, are you saying that no one at the White House whispered or conveyed the words to Senator Daschle that it might be time for him to withdraw? That was totally his decision, and he was not pushed at all?

GIBBS: I'm saying the decision was made by Senator Daschle.

QUESTION: Can you also say whether or not President Obama or anyone at the White House spoke with Governor Lynch in New Hampshire about nominating a Republican replacement for Senator Gregg?

GIBBS: When news reports surfaced of Senator Gregg's interest in, or -- that we were looking at him as a possibility for secretary of commerce, did the governor of New Hampshire call the White House and voice his support? Yes. Did this White House have anything to do with the selection of who might be picked to replace a standing senator if he were selected? No.

QUESTION: I'm sorry, could I follow up real quick? You didn't quite answer his question. Was Daschle given any kind of signal, yes or no, from the White House, that he should withdraw?

GIBBS: I don't know how much more clear I can be. The decision was Senator Daschle's.

QUESTION: No, no, no, he could have decided after he got a signal. Did he get a signal -- just say yes or no -- from the White House? You can answer that question yes or no.

GIBBS: No from the White House. He did not get a signal.

QUESTION: From anywhere else?


GIBBS: You know what I'm going to do from now? I'm going to have you guys write down your questions so I don't misinterpret it. No.


GIBBS: I don't know how much more clearer I can be with the word no. Laura, please phrase your question clearly and succinctly. Speak in slow monotones so that I can understand. Go ahead.


QUESTION: I don't know about the slow monotone but, Robert, the president and others have spoken of senator Daschle's unique qualifications to lead the health reform effort. Given his withdrawal, two questions. One, what impact do you think that will have on the opportunity to get health care reform, which was a heavy lift to start with? And secondly, was there or is there any consideration of keeping him on in a White House post which does not require confirmation?

GIBBS: The president -- well, Senator Daschle has withdrawn his nomination and withdrawn from serving in the White House in the capacity that we had talked about earlier. As it relates to your first question on health care, and I think Senator Daschle would be -- and I think he says it in essence in his statement that, much like the agenda that the president has outlined on any number of subjects, the issue of affordable health care for every American is bigger than one person.

And the job of ensuring health care reform will outlast any person nominated for the secretary of HHS, and likely anybody that serves in this administration. This is a problem that confounds federal and state governments. It confound families and businesses large and small. We watch each year as health care prices get higher and higher and higher, and more people slip through the cracks, more businesses are unable to afford to provide health care coverage for their employees.

We are hopeful to sign a bill this week that closes that gap for children by expanding the popular Children's Health Insurance Program. I don't think the effort slows down for health care reform, and I think Senator Daschle and others would admit that the effort is far bigger than any one individual.