"I recognize that your agenda and the duties facing your chief performance officer are urgent," Killefer said in the letter released by the White House. "I have also come to realize in the current environment that my personal tax issue of D.C. unemployment tax could be used to create exactly the kind of distraction and delay those duties must avoid."
"Because of this I must reluctantly ask you to withdraw my name from consideration," she said.
The White House has been stung in recent days by reports that two of President Barack Obama's nominees -- former South Dakota Sen. Tom Daschle and Tim Geithner -- failed to pay back taxes. Daschle has yet to be confirmed as the U.S. Department of Health and Human Services secretary and Geithner recently was sworn in as Treasury secretary.
During his campaign, Obama proposed creating the position of chief performance officer who would work with federal agencies and the Office of Management and Budget to eliminate government waste and improve efficiencies.
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