U.S. President Barack Obama's choice for health secretary in his cabinet, Tom Daschle, withdrew his nomination on Tuesday over tax problems.

Secretary-designate for Health and Human Services Tom Daschle speaks to the media after meeting with Senate Finance Committee about his pending nomination on Capitol Hill in Washington February 2, 2009. [Xinhuanet.com]

"This morning, Tom Daschle asked me to withdraw his nomination for secretary of health and human services," Obama said in a statement. "I accept his decision with sadness and regret."

Daschle said that he made the decision because he is not a leader who can have the full faith of Congress and will be a distraction to Obama's administration.

"We need the best care in America to be available to all Americans," Daschle said in the statement issued from the White House. "Lives and livelihoods are at stake."

Daschle was the second nominee to the Obama administration that withdrew on Tuesday, following the former nominee for White House chief performance officer, Nancy Killefer, who was also plagued by a personal tax issue.

U.S. media reports said earlier that Daschle, a former Senator from South Dakota, was forced to pay on Jan. 2 more than 120,000 U.S. dollars in back taxes for failing to report using a car and driver service provided by a wealthy friend for over three years.

Daschle apologized on Monday in a letter to the Senate Finance Committee, which would decide on his confirmation, saying that he was "deeply embarrassed and disappointed" about his failure to pay taxes.

"I am deeply embarrassed and disappointed by the errors that required me to amend my tax returns," said Daschle. "I apologize for the errors and profoundly regret that you have had to devote time to them."

Apart from the tax issue, Daschle's nomination was also haunted by his financial disclosure filed about a week ago, showing he made more than 200,000 dollars in the past two years by speaking to the health care industry that he is tasked to reform.

Nevertheless, Obama voiced his "absolute" support for Daschle on Monday.

The nation's leading newspaper, the New York Times, called for Daschle's withdrawal in its Tuesday editorial, saying "only after the Obama transition team flagged unrelated tax issues that would require filing amended returns did Mr. Daschle and his accountant address the need to report the personal use value of the car service -- more than 255,000 U.S. dollars over three years -- as income."

It was considered another embarrassment for the Obama administration, which has witnessed three key designees give up their nomination for scandals related to corruption cases and tax problems.

Obama's first choice for commerce secretary, Bill Richardson, withdrew his nomination last month due to involvement in a corruption case still under investigation. The president on Tuesday nominated Republican Senator Judd Gregg as a replacement.

However, Treasury Secretary Timothy Geithner, who was also criticized for not paying enough tax but in a smaller scale, survived the Senate confirmation last week.

(Xinhua News Agency February 4, 2009)