Former Senate Democratic Leader Tom Daschle on Tuesday withdrew his nomination to oversee the Health and Human Services Department, just a few hours after another Obama nominee also withdrew.
Both had controversies with taxes and cited distractions over that as their reasons for withdrawing.
In a White House statement, President Barack Obama said he accepted Daschle's withdrawal "with sadness and regret." "Now we must move forward," Obama added. A day earlier, Obama had said he "absolutely" stood by Daschle.
Daschle has been battling for his nomination since it was disclosed he failed to pay more than $120,000 in taxes. He later paid $128,203 in back taxes and $11,964 in interest.
Daschle, in a separate statement, said he would have not been able to operate "with the full faith of Congress and the American people."
"I am not that leader, and will not be a distraction" to Obama's agenda, he said.
Daschle also was facing questions about potential conflicts of interests related to the speaking fees he accepted from health care interests.
Daschle also provided advice to health insurers and hospitals through his post-Senate work at a law firm.
The withdrawal comes after Republicans and major newspapers questioned Obama's decision to stick with Daschle.
Republican Sen. Jim DeMint of South Carolina said Obama was "losing credibility" with his statements in support of Daschle. "Part of leadership is recognizing when there has been a mistake made and responding quickly," the Republican said.
In an editorial, The New York Times described Daschle's ability to move "cozily between government and industry" as a cloud over any role he might play in changing the nation's health care system.