Former senate leader, Tom Daschle withdrew his nomination to be President Barack Obama's Health and Human Services secretary on Tuesday, saying he did not want to be a distraction.

A recent tax error caused Daschle to pay $140,000 in back taxes.

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

A day earlier, Obama had said he absolutely stood by Daschle in the face of problems over back taxes and potential conflicts of interest.

Obama had given Daschle two jobs; to be White House health-care czar as well as the post to lead the Health and Human Services Department. Daschle said he will also relinquish the czar post.

It really sets us back a step, said Sen. Dick Durbin, D-Ill. Because he was such a talent. I mean he understood Congress, serving in the House and Senate he certainly had the confidence of the president.

Daschle's statement came less than three hours after another Obama nominee also withdrew from consideration, and also over tax problems. Nancy Killefer, nominated by Obama to be the government's first chief performance officer, said she didn't want her taxes in arrears to be a distraction.