Two quick points about Daschle's withdrawal:
1.) My read of what happened: Daschle was obviously personally close to Obama--he'd supported Obama early on; stocked his campaign with key lieutenants, lobbied superdelegates on his behalf. All of that said, the only way Daschle was going to survive is if there were an important tactical/political reason to for him to survive. Think back over just about every political and personnel decision Obama has made to this point: Forgiving Lieberman, installing Hillary at State, giving John Kerry bubkes despite his critical, post-New Hampshire endorsement, exiling Susan Rice to the U.N. even though she was a strong early supporter etc., etc. What do they all have in common? They're completely unsentimental decisions.
Now, don't get me wrong. I might quibble with a decision here or there, but they were generally the right ones. In fact, one reason Obama has the makings of a great president is that he doesn't let personal feelings interfere with the job, for good or for ill. (Can you imagine Bill Clinton forgiving a Democratic senator who'd actively campaigned for his opponent?) But, once you realize that about Obama, you had to go looking for the non-sentimental reasons to stick with Daschle, and it wasn't clear they outweighed the reasons for cutting him loose. For example, while it's true that Daschle knows the Senate extremely well, is highly-respected there, and is fluent on health care policy, some of that was diminished by his longstanding rift with Montana Sen. Max Baucus, the key Senate player on health care by virtue of his Finance Committee chairmanship. So there was even less to outweigh the ugly atmospherics of Daschle's tax problems and his post-Senate career than you might have thought.
For what it's worth, I think it's a real shame. Everyone I know who's ever worked for Daschle absolutely raves about him, and, recent events notwithstanding, I think he's been a real force for good in the world. My point is just that, given the way this administration works, his departure was not unpredictable.
2.) One of the tactical arguments in favor of keeping Daschle was that it wasn't clear who had the combination of stature and health care knowledge to replace him. My suggestion: Oregon Sen. Ron Wyden. Wyden is even more of a health care wonk than Daschle was--he's the author of an innovative plan that had begun to attract bipartisan Senate support--and he currently sits on the all-important Finance Committee, meaning he has personal relationships with the senators who'll control the fate of health care reform. Having said that, I have no idea what Wyden's like as a manager, and no idea how he gets along with Baucus in particular. But my sense is that a Finance Committee Dem with significant health care experience is the way to go, and no one seems to have more than Wyden. (Also, Oregon is a blue state with a Democratic governor, so the seat should be pretty safe...)
Update: A colleague points out that Wyden is less than beloved by his Senate colleagues, so maybe it's not the most inspired idea. There's also the issue of liberal skepticism of Wyden, whom they feel is too eager to work (and compromise) with his GOP counterparts. But, from Obama's perspective, that doesn't strike me as a bad thing necessarily.
--Noam Scheiber