Tuesday, February 3, was a terrible, horrible, no good, very bad day for Barack Obama. First, his appointee for White House chief performance officer resigned, apparently because she had failed to pay unemployment taxes on household help several years ago. Then, in the early afternoon, before the president was scheduled to have interviews with five television news anchors, former Senate Majority Leader Tom Daschle wrote Obama asking that his nomination to be secretary of health and human services (and to serve as a White House staffer on health) be withdrawn because of his tax problems. He had failed over the past three years to pay about $142,000 in taxes. Even more embarrassing, most of the unpaid taxes were for the value of a car and driver service he had enjoyed for three years. He had come a long way since his intensive personal campaigning elected him to the House from South Dakota in 1978 by 139 votes—out of 129,000 cast—at age 30.
Daschle was the second cabinet nominee with a tax problem. Timothy Geithner was confirmed as treasury secretary despite having failed to pay about $26,000 in self-employment taxes when he was employed by the International Monetary Fund. The argument was made on behalf of both Geithner and Daschle that they were uniquely qualified for their jobs—but uniquely qualified in different ways. Geithner is arguably uniquely qualified to make policy. As head of the New York branch of the Federal Reserve, he may have had more knowledge of the workings of financial markets than anyone else in the world, with the additional advantage that he had not been working for any of the financial firms that have encountered turbulence. And, with Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Henry Paulson, he has been making decision after decision in the financial crisis.
Daschle was uniquely qualified for his job not on policy but on politics. He evidently knows a lot about healthcare policy, but many other people acceptable to the Obama administration do too. The unique value that Daschle has is that he knows the legislative process and the players (he served with 69 current members of the Senate, and 21 of the rest are Democrats). As majority or minority leader for 10 years, he knows how to put legislation together, overcome objections, negotiate deals, and reach compromises. Obama got it right when he told Fox News's Chris Wallace just hours after Daschle's withdrawal that he was the "best person to achieve healthcare reform and get people together." It's hard to think of anyone else who has that combination of knowledge and political skills. (One I'd suggest looking at is Tennessee's Democratic Gov. Phil Bredesen, who fashioned a state health insurance program that has turned out to cost less than projected.)
So it looks less likely now that the Obama administration is going to be able to put together a health insurance program and pass something resembling it through Congress anytime soon. Getting 218 votes in the House for any Democratic plan will be easy. Getting 60 votes in a Senate that currently has only 58 Democrats (and will have 59 if Minnesota's Al Franken is seated) will be much harder. And there's another problem when you tackle healthcare. America does not have one healthcare and healthcare finance system; it has many healthcare and healthcare finance systems. That means that different states and different regions have players with different interests—interests that will generally get a hearing from their members of Congress. Those who will be negatively affected by an Obama plan will lobby their representatives, including Demo-crats, and many of them may be heard and heeded.
You can imagine what the outcry will be. Special interests! Lobbyists! But remember that the unique qualification that Daschle brought to the table was not policymaking but lobbying. The First Amendment of the Constitution gives all of us, "special interests" included, the right "to petition the government for a redress of grievances." When government channels vast flows of money or when it decides moral issues on which people have strong views, Americans are going to lobby to affect its decisions. Candidate Obama denounced the influence of lobbyists and said they would have no place in his administration. President Obama found it necessary to ask for exceptions for his deputy secretary of defense and his HHS and agriculture secretaries.