Judd Gregg’s withdrawal jolts Obama

Sen. Judd Gregg (R-N.H.) delivered a stunning blow to President Obama on Thursday, withdrawing his nomination as Commerce secretary because of “irresolvable conflicts” over two of the young administration’s most controversial policies.

He cited the stimulus package and a dispute over control of the 2010 Census as prompting his dramatic withdrawal, a move that pushed the White House into full damage-control mode.

{mosads}“Prior to accepting this post, we had discussed these and other potential differences, but unfortunately we did not adequately focus on these concerns,” Gregg said in a statement. “We are functioning from a different set of views on many critical items of policy. … Obviously the president requires a team that is fully supportive of all his initiatives..”

The White House issued a harshly worded response, hiding none of its frustration with the Republican’s decision and with his hot-and-cold attitude toward serving in the Democratic administration.

White House press secretary Robert Gibbs said it had been the senator who first approached Obama seeking the job. “Sen. Gregg reached out to the president and offered his name for secretary of Commerce,” Gibbs said. “He was very clear throughout the interviewing process that despite past disagreements about policies, he would support, embrace and move forward with the president’s agenda.

“Once it became clear after his nomination that Sen. Gregg was not going to be supporting some of President Obama’s key economic priorities, it became necessary for Sen. Gregg and the Obama administration to part ways. We regret that he has had a change of heart.”

Gregg would have elevated bipartisanship beyond tokenism in Obama’s Cabinet, but at a press conference Thursday, he said he made a mistake in accepting the nomination, citing his own independence as the cause to step aside.

“It became clear to me that it would be very difficult to serve in this Cabinet or any Cabinet for that matter and be part of the team and not be 100 percent a part of the team,” Gregg said. “This was simply a bridge too far for me. The president asked me to do it; I said yes. That was my mistake, not his.”

Gregg denied any aspect of the vetting process played a role in his decision to step aside.

“As a further matter of clarification, nothing about the vetting process played any role in this decision,” Gregg said. “I will continue to represent the people of New Hampshire in the United States Senate.”

But Gregg noted he probably would not seek reelection when his term expires in 2010.

Speaking to employees at a Caterpillar plant in Peoria, Ill., Obama did not comment on Gregg’s departure.

Gregg’s support was an important factor in helping convince three Senate Republican centrists to cross party lines and back the stimulus bill. Sens. Arlen Specter (Pa.), Susan Collins (Maine) and Olympia Snowe (Maine) each voted for the measure earlier this week, giving it enough support to secure cloture.

But his withdrawal puts another blemish on the early weeks of Obama’s administration, adding yet another chapter in the president’s difficult search to fill out his Cabinet. Obama has had other problems with vetting nominees, and several high-profile nominees have had to pull their names from consideration.

“I think [Gregg’s withdrawal] is a demonstration of inexperience,” Sen. Bob Bennett (R-Utah) told The Hill. “It has not been a good week for President Obama.”

Besides the stimulus, Gregg cited the administration’s stance on the census, which will take place after the 2010 election, as one of the factors in his decision.

The White House had taken steps to remove the Census from the Commerce Department’s jurisdiction, an issue that caused Republicans to cry foul. Last week, the administration announced the Census Bureau would be overseen by the White House, not the Commerce Department.

Republicans had put pressure on the White House to allow Gregg to oversee the bureau as Commerce secretary, with prominent lawmakers penning a letter to Obama Wednesday on the subject. Early on Thursday, House GOP Conference chairman Mike Pence (Ind.) urged Obama to give Gregg the authority or withdraw his name.

Republicans praised Gregg’s decision.

“Sen. Gregg made a principled decision to return and we’re glad to have him,” Senate Minority Leader Mitch McConnell (R-Ky.) said, calling the New Hampshire senator “a key adviser to me and to the Republican Conference.”

{mospagebreak}“Judd Gregg would have been a strong Cabinet member, but it’s good for the country and the Senate that he will continue to be a Republican senator,” Senate Republican Conference Chairman Lamar Alexander (Tenn.) said.

Asked for his reaction to Gregg’s withdrawal as a candidate, House Minority Leader John Boehner (R-Ohio) responded simply: “Wonderful.”

Sen. Mel Martinez (R-Fla.), who served as secretary of Housing and Urban Development during President George W. Bush’s administration, said he understood Gregg’s predicament.

{mosads}“It is the president that got elected; it’s not the Cabinet member. But if you find there are serious policy differences — as his statement indicated — then I believe that is the correct thing to do, not to continue to pursue service,” Martinez told The Hill.

House Oversight and Government Reform Committee ranking member Darrell Issa (R-Calif.), who was one of the most outspoken Republicans on the administration’s Census proposal, slammed Obama for his “injection of Chicago-style politics into the nonpartisan Census process.”

“I commend Sen. Gregg for his decision to stand by his principles and withdraw his name from consideration,” Issa said. “Regardless of who the president nominates to serve as secretary of Commerce, Republicans will continue to demand a fair Census that is not manipulated by White House political operatives.”

Gregg’s home-state colleague, Sen. Jeanne Shaheen (D-N.H.), refused to immediately comment.

Significant steps had already been taken in anticipation of Gregg’s confirmation as secretary. Gregg and New Hampshire Gov. John Lynch (D) had arrived at a deal before the senator took the post by which the Democratic governor would name a Republican to take Gregg’s seat.

Lynch tapped that replacement, former top Gregg aide Bonnie Newman, in a press conference on Feb. 3. Newman had already said she would fill out Gregg’s term and that she would not seek reelection when the seat came up in 2010.

Lynch thanked Newman for her willingness to serve and said he respected Gregg’s decision.

“I very much respect Sen. Gregg’s decision to withdraw and stay in the U.S. Senate,” Lynch said, Newman, who served as Gregg’s top aide when he served in the House, said she had spoken with the senator Thursday afternoon.

“I expect Sen. Gregg’s decision was not an easy one nor made lightly,” Newman said. “For me, it would have been a great honor to serve in the United States Senate.”

Rep. Paul Hodes (D-N.H.) had announced his intention to run for the open Senate seat, though he was considering a run even if Gregg had decided to seek a fourth term. In a statement, Hodes said he would be in the race regardless of whether Gregg runs again.

Asked whether he would run for reelection, Gregg said he was leaning against another bid. “Will I run? Probably not,” he said at the Thursday press conference.

 Molly K. Hooper, Walter Alarkon and Roxana Tiron contributed to this article.