Gregg withdraws as commerce secretary nominee

WASHINGTON - Saying, "I made a mistake," Republican Sen. Judd Gregg of New Hampshire abruptly withdrew as commerce secretary nominee on Thursday and drew a testy reaction from the White House, suddenly coping with the third Cabinet withdrawal of Barack Obama's young presidency.

Gregg cited "irresolvable conflicts" with Obama's handling of the economic stimulus and 2010 census in a statement released without warning by his Senate office.

Later, at a news conference in the Capitol, he sounded more contrite.

"The president asked me to do it," he said of the job offer. "I said, 'Yes.' That was my mistake."

Obama offered a somewhat different account from Gregg.

"It comes as something of a surprise, because the truth, you know, Mr. Gregg approached us with interest and seemed enthusiastic," Obama said in an interview with the Springfield (Ill.) Journal-Register. "But ultimately, I think, we're going to just keep on making efforts to build the kind of bipartisan consensus around important issues that I think the American people are looking for."

White House spokesman Robert Gibbs said once it became clear Gregg was not going to support some of Obama's top economic priorities, it became necessary for Gregg and the administration "to part ways," Gibbs said. "We regret that he has had a change of heart."

Gregg said he'd always been a strong fiscal conservative. "It really wasn't a good pick." When the Senate voted on the president's massive stimulus plan earlier this week, Gregg did not vote. The bill passed with all Democratic votes and just three Republican votes.

The unexpected withdrawal marked the latest setback for Obama in his attempt to build a Cabinet. It came as the new president expended political capital in Washington - and around the country - for his economic package.

Treasury Secretary Tim Geithner was confirmed despite revelations that he had not paid some of his taxes on time, and former Senate Democratic Leader Tom Daschle withdrew as nominee as health and human services secretary in a tax controversy.

New Mexico Gov. Bill Richardson of New Mexico was Obama's first choice as Commerce Secretary. He withdrew several weeks ago following disclosure that a grand jury is investigating allegations of wrongdoing in the awarding of contracts in his state. Richardson has not been implicated personally.

Gregg was one of three Republicans Obama had put in his Cabinet to emphasize his campaign pledge that he would be an agent of bipartisan change.

White House Chief of Staff Rahm Emanuel said Obama and Gregg met in the Oval Office on Wednesday and there were no hard feelings.

"It's better we figured this out now than later," Emanuel said. "It's unfortunate. ... There's a disappointment."

In an interview with The Associated Press, Gregg said, "For 30 years, I've been my own person in charge of my own views, and I guess I hadn't really focused on the job of working for somebody else and carrying their views, and so this is basically where it came out."

Gregg, 61, said he informed the White House "fairly early in the week" about his decision. He said he changed his mind after realizing he wasn't ready to "trim my sails" to be a part of Obama's team.

"I just sensed that I was not going to be good at being anything other than myself," he said.

The New Hampshire senator also said he would probably not run for a new term in 2010.

Sen. Jay Rockefeller, D-W.Va., chairman of the Senate Commerce Committee, said he wished Gregg "had thought through the implications of his nomination more thoroughly before accepting this post."

Senate Majority Leader Harry Reid, D-Nev., called Gregg a friend and said, "I respect his decision."

In his statement, Gregg said his withdrawal had nothing to do with the vetting into his past that Cabinet officials routinely undergo.

Gregg's reference to the stimulus underscored the partisan divide over the centerpiece of Obama's economic recovery plan. Conservatives in both houses have been relentless critics of the plan, arguing it is filled with wasteful spending and won't create enough jobs. Gregg has refrained from voting on the bill - and on all other matters - while his nomination was pending.

The Commerce Department has jurisdiction over the Census Bureau, and the administration recently took steps to assert greater control. Republicans have harshly criticized the decision, saying it was an attempt to politicize the once-in-a-decade event.

The outcome of the census has deep political implications, since congressional districts are drawn based on population. Many federal funds are distributed on the basis of population, as well.

Both of those factors mean there is a premium on counting as many residents as possible. Historically, the groups believed to be most undercounted are inner-city minorities, who tend to vote Democratic.

Gregg's announcement also undid a carefully constructed chain of events.

The New Hampshire senator had agreed to join the Cabinet only if his departure from the Senate did not allow Democrats to take control of his seat.

New Hampshire Gov. John Lynch, in turn, pledged to appointed Bonnie Newman, a former interim president of the University of New Hampshire.

She, in turn, had agreed not to run for a full term in 2010, creating an open seat for Democrats to try and claim.

In a statement, Senate Republican leader Mitch McConnell of Kentucky said Gregg "made a principled decision to return and we're glad to have him."

Lynch, who spoke to Gregg several hours before the announcement, said he respected Gregg's decision to withdraw and remain in the Senate. He thanked Newman for her willingness to serve.

A day after Gregg's nomination had been announced, the AP reported that a former staffer was under criminal investigation for allegedly taking baseball and hockey tickets from a lobbyist in exchange for legislative favors while working for Gregg.

The former staffer, Kevin Koonce, has been identified in court papers only as "Staffer F" in the sprawling corruption probe stemming from disgraced lobbyist Jack Abramoff.

Gregg said at the time that he had been told he was neither a subject nor target of the investigation, and would cooperate fully.


Associated Press Writers Andrew Taylor in Washington and Holly Ramer in Concord, N.H., contributed to this report.