Commerce nominee withdraws

WASHINGTON -- Saying "I made a mistake," Republican Sen. Judd Gregg of New Hampshire abruptly withdrew as commerce secretary nominee Thursday and left President Obama suddenly coping with his third Cabinet withdrawal.

Gregg cited "irresolvable conflicts" with Obama's policies, specifically mentioning the $790 billion economic stimulus bill 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," Obama said.

Later, he said he was glad Gregg "searched his heart" and changed course now before the Senate confirmed him to the Cabinet post.

He also said Gregg's withdrawal won't deter him from working with Republicans and trying to change the partisan ways of Washington.

"Clearly he was just having second thoughts about leaving the Senate, a place where he's thrived," Obama added.

The unexpected withdrawal came just three weeks into Obama's presidency and on the heels of several other Cabinet troubles. The new president is in the midst of expending political capital in Washington -- and around the country -- for his economic package and is seeking to move forward with an ambitious agenda in the midst of an economic recession while the country continues to face threats abroad.

Now Obama also finds himself needing to fill two vacancies -- at Commerce and at the Health and Human Services Department. Former Senate Democratic leader Tom Daschle withdrew his nomination for that post amid a tax controversy. Treasury Secretary Tim Geithner was confirmed despite revelations that he had not paid some of his taxes on time.

New Mexico Gov. Bill Richardson was Obama's first choice as commerce secretary. He withdrew in early January 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 Gregg told the White House early this week that he was having second thoughts and met with Obama about them during an Oval Office meeting on Wednesday. Emanuel said there were no hard feelings and "it's better we figured this out now than later."

"He went into this eyes open and he realized over time it wasn't going to be a good fit," Emanuel added.

Gregg said he'd always been a strong fiscal conservative and added: "It really wasn't a good pick."

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 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.

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

In his statement, Gregg said his withdrawal had nothing to do with the vetting into his past that Cabinet officials routinely undergo. He told the AP he foresaw conflicts over health care, global warming and taxes.

He also cited both the stimulus and the census as areas of disagreement with the administration.

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. Asked by reporters whether the White House could have used his vote on the plan, Gregg said "I'm sure that's true" and he said the administration had asked him to vote for it.

Conservatives in both houses have been relentless critics of the centerpiece of Obama's economic recovery plan, arguing it is filled with wasteful spending and won't create enough jobs.

The Commerce Department has jurisdiction over the Census Bureau, and the administration recently took steps to assert greater control. The outcome of the census has deep political implications, since congressional districts are drawn based on population.

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 his seat.

New Hampshire's Democratic governor, John Lynch, in turn, pledged to appointed Bonnie Newman, a Republican and 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 to 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, Kevin Koonce, was under criminal investigation for allegedly taking baseball and hockey tickets from a lobbyist in exchange for legislative favors while working for Gregg.

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

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Associated Press writers Jennifer Loven and Andrew Taylor in Washington, Ben Feller in Springfield, Ill., and Holly Ramer in Concord, N.H., contributed to this report.