(Adds comment on Gibson from veterans group)
By David Lawder and Mark Felsenthal
WASHINGTON, May 30 (Reuters) - U.S. Veterans Affairs Secretary Eric Shinseki resigned on Friday after a political firestorm over widespread delays in veterans' medical care, leaving President Barack Obama with a freer hand to address systemic problems bedeviling the agency.
Obama announced that he accepted Shinseki's resignation "with considerable regret," after the two met on Friday to review initial findings of an internal audit of scheduling abuses at VA facilities across the country.
The audit found that patient appointment wait times had been misrepresented at least once at over 60 percent of the 216 VA sites surveyed. It also said, with growing demand for services, a 14-day goal for medical appointments instituted under Shinseki was "simply not attainable" for the VA and should be scrapped.
Earlier this week, the VA's inspector general released a scathing report that confirmed allegations that staff in Phoenix had masked months-long wait times and were motivated by meeting the two-week targets used for salary and bonus awards.
Over the past few days, calls for Shinseki to step down grew louder. Dozens of both Democratic and Republican lawmakers said it was time for new leadership at the VA.
Obama praised Shinseki's military career and accomplishments in other veterans issues such as reducing homelessness, but said the 71-year-old retired Army general told him he "does not want to be a distraction" to fixing the VA's problems.
"That was Ric's judgment on behalf of his fellow veterans, and I agree. We don't have time for distractions. We need to fix the problem," Obama said.
Obama said Sloan Gibson, deputy secretary of the VA, would take the helm on an acting basis while he looked "diligently" for a new permanent VA secretary. Gibson, an Army veteran and former banker, had joined the VA just three months ago after running the USO military service organization.
Some lawmakers and veterans service group said Gibson would be a credible candidate for permanent secretary because of his work transforming the USO to meet the needs of a new generation of military service members and veterans.
"Sloan is a great leader," said Tom Tarantino, policy director for the Iraq and Afghanistan Veterans of America. "If he wants the job, he would definitely be on that short list."
Others mentioned as possible successors to Shinseki include former Army Chief of Staff Ray Odierno, former Virginia Senator Jim Webb, and Representative Tammy Duckworth, a Democrat who lost both legs in an Iraq war helicopter crash and is a former VA assistant secretary.
Members of Congress applauded Shinseki's departure as a step toward restoring confidence in the embattled agency that provides healthcare and other benefits to veterans.
"The denial of care to our veterans is a national disgrace and it's fitting that the person who oversees the Department of Veterans Affairs has accepted responsibility for this growing scandal and resigned," said Senate Republican leader Mitch McConnell of Kentucky.
Representative Patrick Murphy, a Democrat whose south Florida district is home to many military retirees, said: "We think it's the right thing to do. We have to restore some faith and confidence in the VA and at this point, that was probably the only way to do it."
PRESSURE ON OBAMA
The scandal over the cover-up of veteran care delays has grown into a top national issue just five months before congressional elections in which all 435 House of Representatives seats and one third of Senate seats are up for grabs. Republicans, who dominate the House, need to gain just six seats to take control of the U.S. Senate.
Republicans sought to keep Obama on the defensive over the VA problems, which along with the botched launch of health insurance reforms, they say is another example of his administration's mismanagement.
"One personnel change cannot be used as an excuse to paper over a systemic problem," said House speaker John Boehner. "We'll hold the president accountable until he makes things right."
Inspector general probes into scheduling abuses are now active at 42 VA locations. In Phoenix, doctors have said some 40 veterans died while waiting months for care.
Shinseki's resignation came just after he addressed the National Coalition for Homeless Veterans and apologized to veterans, lawmakers and the American people for the abuses.
Shinseki announced to the group that the Phoenix VA medical center's senior leaders would be removed and he would use all authority at his disposal to hold accountable those "who instigated or tolerated dishonorable or irresponsible scheduling."
Shinseki said no senior executives of the Veterans Health Administration would receive performance awards this year and said the VA would quickly get appointments for 1,700 Phoenix veterans still waiting to see a doctor.
"That breach of integrity is irresponsible, it is indefensible and unacceptable to me," Shinseki said. (Reporting by Susan Heavey, David Alexander, Mark Felsenthal, Richard Cowan and David Lawder; Editing by Caren Bohan and Gunna Dickson)