• This is a rush transcript from "The Journal Editorial Report," February 8, 2009. This copy may not be in its final form and may be updated.

    PAUL GIGOT, HOST: Up next on the "Journal Editorial Report," Obama hits turbulence. Will the Daschle withdrawal and his left turn on stimulus take a toll on his image as a reformer?

    Plus, Senator Dodd plays peek-a-boo with the press giving a handful of reporters a quick look at papers related to his sweetheart mortgage deals. Why so coy? We'll find out.

    And South Carolina police consider charging Michael Phelps for his drug use. Should the Olympic swimmer get a pass?

    The "Journal Editorial Report" begins right now.

    Welcome to the "Journal Editorial Report." I'm Paul Gigot.

    The new administration has hit a run of turbulence as a high-profile cabinet nominee quits over tax problems, and the economic stimulus package faces increasing criticism at home and abroad.

    Here with a look at what turned out to be President Obama's first rough week, Wall Street Journal columnist and deputy editor Dan Henninger; editorial board member, Jason Riley; and Washington columnist, Kim Strassel.

    Kim, first, the president said he was absolutely behind Tom Daschle, and two days later said he had screwed up after Daschle withdrew. What does this episode tell us about President Obama's management style? And how well did he handle it?

    KIM STRASSEL, WASHINGTON COLUMNIST: Well, I think that they thought they were just going to maybe be given a pass on some of these things. The problem that they have at this point is not even necessarily will any one particular nominee be confirmed or not, although that is an issue. It's increasingly becoming an image problem. Remember, this is a guy who campaigned -- he was going to have strong ethics, very strong accountability, an era of responsibility. And they're putting through all these people that are doing one thing even as American people are told they have to do something else.

    GIGOT: But it seems to me he's cutting his loses pretty fast on Daschle. This could have lasted a couple weeks. Daschle was his key guy on health care. He didn't want to lose him. So to set him loose this early, maybe it's a smart move.

    STRASSEL: I think what they knew that other people didn't know -- although we're starting to find out -- is they have yet other problems in the administration. The most recent one is their nominee to be the secretary of labor, Hilda Solis. Turns out, her husband had a number of tax problems. They only recently got taken care of. This was something they were asked about earlier in the week, any more of this stuff coming out. They didn't really give an answer. We know there is and there may yet be more to come. So they might be trying to get this stuff done and out of the way. As long as it's going on, it was diverting attention from the stuff they want to take care of, which is the stimulus.

    GIGOT: All right.

    JASON RILEY, EDITORIAL BOARD MEMBER: But in addition to the damage done to Obama's image as a reformer this week, this could also be a setback for health care reform. Daschle brought certain attributes to the issue. He had written a book on this issue. He was a former member of Congress.


    GIGOT: Where a key action will be.

    RILEY: Yes. And he had ties with the business community. Finding those three attributes in another nominee isn't impossible, but could be difficult.

    DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: I think this explains a lot, why they're getting in trouble with these nominees. Health care is fundamentally -- doing this big health care thing is fundamentally a legislative process. You need a guy that can work that system, as well as being an ambassador to the business community in Washington to sell it to them.

    This is an -- Washington is an insiders game. You need insiders to play it. Not new people from the outside, not the change we've been waiting for, but the old guys. And the old guys, who have been there a long time, tend to have problems like Tom Daschle.

    GIGOT: Kim, on Dan's point, one of the interesting things, the vote from Daschle came not only from conservatives or Republicans, it came from the left. You saw a lot of people on the left say, look, he's made too much money talking to health care groups. He's too much of an insider, as Dan said. Too close to business, as Jason pointed out, although you need business buy-in if you get healthcare reform. Is this a harbinger of maybe the left giving Obama some problems?