Obama seeks recovery after screw up

February 4, 2009 12:00 am

, WASHINGTON, Jan 4 – President Barack Obama sought to recover on Wednesday from his toughest day in office yet after admitting he "screwed up" in a storm over taxes that forced his pick to lead health reform to withdraw.

Obama’s carefully staged push for support of his massive economic stimulus plan was overshadowed as both health czar nominee Tom Daschle and another nominee Nancy Killefer — tapped to be government budget watchdog — withdrew because of tax issues.

In a flurry of television interviews Obama had hoped to pile pressure on lawmakers debating the near 900-billion-dollar package in the Senate, but was forced to face down the ethics questions instead.

"I don’t want to send a message to the American people that there are two sets of standards, one for powerful people, and one for ordinary folks who are working every day and paying their taxes," Obama said in an interview with CNN.

"I think this was a mistake. I think I screwed up."

Earlier, Obama said he accepted the decision by Daschle, one of his earliest supporters, with regret after the former Senate majority leader decided he could not escape a row over his payment of 128,000 dollars in back taxes plus some 12,000 dollars in interest.

The White House denied that it had any role in the decision, or that he was pushed to decline the post of secretary of health and human services and White House health czar.

Daschle’s demise came hours after Obama’s nominee for White House budget chief Killefer withdrew her nomination, reportedly over her failure to pay past unemployment taxes for household help.

Obama tried to keep the focus on the economy as he named Republican Senator Judd Gregg as his commerce secretary.

"Our economy is shrinking, unemployment rolls are growing, businesses and families can’t get credit, and small businesses can’t secure the loans they need to create jobs and get their products to market," Obama said.

"With the stakes this high, we cannot afford to get trapped in the same old partisan gridlock."

Democratic Senate leaders, meanwhile, promised to give Republican amendments a full airing as lawmakers took up debate in earnest on the stimulus bill.

Republicans complain they were shut out in the House of Representatives, and did not offer Obama a single vote when the package was passed last week.

Obama’s political strategist David Axelrod was on Capitol Hill Tuesday to lobby senators, and raised the prospect of small changes to the bill.

"We want as many votes for this package as we can possibly get — Republican, Democrat, but the key obviously is to pass it," he said.

"Obviously there are going to be nips and tucks along the way."

But Senate Republican minority leader Mitch McConnell dug in for much bigger changes to the legislation.

"Everybody agrees that there ought to be a stimulus package, the question is, how big and what do we spend it on?" he said.

"The House bill is an embarrassment, the Senate bill on the floor is not markedly better, our goal will be to pare it down and to target it right at the problem."

In an interview late Tuesday with ABC News, Obama backed off a "Buy American" provision in the bill that would bar the use of any stimulus funds to buy steel, iron or other manufactured goods for infrastructure construction projects from abroad.

"I think that would be a mistake right now. That is a potential source of trade wars that we can’t afford at a time when trade is sinking all across the globe," Obama said.

"I think it would be a mistake though, at a time when worldwide trade is declining, for us to start sending a message that somehow we’re just looking after ourselves and not concerned with world trade," he said in another interview with Fox News.

US trading partners in Europe and Canada reacted with fury to the clause, warning it could start a global round of tit-for-tat trade reprisals akin to the tariff wars of the 1930s Great Depression.

Some 20 mayors from major US cities, including Miami Mayor Manny Diaz and Los Angeles Mayor Antonio Villaraigos are set to stop by the White House Wednesday "to discuss the urgent need" for the economic recovery package, the White House said.


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