Today, however, he decided to withdraw from consideration for the post, saying in a written statement that he realizes the job requires "the full faith of Congress and the American people, and without distraction."
There is no question that the issues surrounding his back taxes had become a major distraction. This was "[Treasury Secretary Timothy] Geithner on steroids," Sen. John Cornyn, R-Tex., put it today. Sen. Jim DeMint, R-S.C., said President Obama was "losing credibility" the more he defended Daschle.
Issues regarding conflict of interest were also beginning to dog Daschle. The New York Times, in an editorial this morning, called for Daschle to withdraw his name. "Although Mr. Daschle was not a registered lobbyist, he offered policy advice to the UnitedHealth Group, a huge insurance conglomerate," the Times wrote.
Daschle was also a trustee of the Mayo Clinic in Minnesota, on whose behalf he voiced opposition to a federal loan for a freight rail line near the clinic's headquarters in Rochester, Minn.
"Mr. Daschle is another in a long line of politicians who move cozily between government and industry," the editorial read.
At a time when President Obama is working on getting an economic stimulus through Congress by the self-imposed deadline of mid-February – in addition to figuring out how to distribute the remaining $350 billion of the financial bailout package – the Daschle mess threatened to become a problem for Obama in his dealings with Congress.
The Daschle story would have continued to be front page news between now and next week, when his second confirmation hearing was scheduled, and, based on Daschle's statement today, he saw the writing on the wall: distraction is not what the president needs right now.
Daschle, Geithner, today's withdrawal of Mr. Obama's nominee for "chief performance officer" Nancy Killefer, as well as the nomination of former lobbyists to deputy secretary posts at the Pentagon and Health and Human Services have all given the president's critics some ammo.
Questions are starting to arise about Mr. Obama's sincerity during his campaign when he repeatedly vowed to "change Washington" and when he said during his inaugural address that the country needs to usher in a "new era of responsibility."
But whether it's nominees with income tax issues or lobbyists being brought on by a president who promised not to deal with lobbyists, it may be that putting yourself out there as an ethics crusader is easier said than done.
"Sometimes you can over promise," former Sen. Warren Rudman, R-N.H., told the Associated Press.
"The difference between campaigning and governing is immense," Stuart Rothenberg, a non-partisan political analyst, told CBS News' Chip Reid.
"There's a huge gap there and when you are governing, you are trying to get the best people, you understand that you have to make trade offs, its all about not the perfect, but the best, and I think the administration is finding that on personnel matters as well," he added.
Steve Chaggaris is the CBS News Political Director.