Daschle withdraws as HHS nominee clouding Obama’s health reform plans

WASHINGTON In a surprise announcement this afternoon, former Senate Democratic Leader Tom Daschle said he is withdrawing his nomination to head the Dept. of Health & Human Services.

Daschle’s decision to withdraw – following revelations of delinquent tax payments that have dogged his Senate confirmation process over the past week – has knocked the Obama Administration’s plans for an orderly Cabinet confirmation process off balance. Worse, Daschle’s exit has clouded the new president’s plans for sweeping and rapid reform of the U.S. health care system.

In a statement, President Barack Obama said he was informed of Daschle’s decision this morning. “I accept his decision with sadness and regret,” said the President.

In recent weeks, Senate approval of the former senator to head the powerful agency – as well as a new White House office in charge of health-reform efforts – seemed all but assured. But revelations that Daschle had failed to pay $120,000 in taxes stemming from use of a limo and driver gained traction in the Senate, and a rapid erosion of support among Republican lawmakers that culminated in a closed-door meeting in which he announced his decision to pull out of the confirmation process.

Some lawmakers, including Senate Democratic Whip Richard Durbin of Illinois, are reportedly predicting that Daschle’s withdrawal could be a serious impediment to efforts by the President to overhaul the U.S. health system and expand coverage to more of the nation’s estimated 46 million uninsured Americans.

Daschle was the powerful Senate majority leader until he lost his seat in the 2004 elections, and has been busy in recent years promoting cost-effective health reform proposals. Many of those proposals were laid out in a book titled Critical: What We Can Do About the Health Crisis, which the former Democratic senator from North Dakota co-authored with Jeanne Lambrew, who has been tapped by President Obama for the new post of deputy director of the White House Office of Health Reform.

Daschle has long a broader system of insuring Americans for medical expenses, including pharmaceuticals, with federal aid. He also proposed creating a federal board—modeled after the Federal Reserve Board and “independent from politics,” in Daschle’s words—to oversee federal health care expenditures by “determining which medicines, treatments, and procedures are most effective—and identifying those that do not justify their high price tags.”

Prospects for those proposals are muddled by Daschle’s exit, but it’s certain that the Obama Administration will continue to champion broader coverage, lower drug costs through generic drugs and follow-on biologics, drug importation, health information technology and other health reform initiatives. What’s more, the nomination for deputy HHS secretary of William Corr, an ardent proponent of generics as a cost-saving tool and of more preventive-health programs, appears to be on track despite Daschle’s withdrawal.