In a speech on the House floor, Armey, 61, a member of Congress from Texas for 17 years and the chamber's Republican leader since 1995, said the conservative causes he has championed, "peace through strength and supply-side economics," have changed the world for the better.
His brief remarks focused on the legislative victories the Republicans have achieved in the past seven years.
Armey said the GOP had twice lowered the tax burden on America's working families and had "honored America's prosperity" by holding the line on spending.
To applause from Democrats and Republicans alike, Armey said it was time "to stand down as majority leader and as a member of Congress, to take my leave of this place and the people I love so much and return home to my beloved 26th District of Texas, and more important, to my beloved wife and family."
He made no mention of the race that's already under way to succeed him in his leadership position.
House Majority Whip Tom DeLay, like Armey, a conservative Texan, is widely seen as the front-runner to succeed Armey.
"I'm saying today that Tom DeLay will be our next majority leader," declared Rep. Tom Reynolds, a New York Republican. "He is the right person for the job."
DeLay, nicknamed "The Hammer" for his hardball style, received dozens of calls from colleagues Tuesday, after Armey informed members he might retire, urging him to run and promising their support, aides and lawmakers said.
The House Republican leader is the chamber's second-ranking Republican, behind only House Speaker Dennis Hastert of Illinois.
Other possible candidates for the No. 2 job include House Conference Chairman J.C. Watts of Oklahoma and Rep. John Boehner of Ohio, chairman of the House Education Committee.
Boehner said Wednesday, "I have not ruled it (a run for the job) in or out." An aide to Watts said the Oklahoma Republican had not made a decision either.
The election for House Republican leader will not be held until January 2003, two months after the 2002 congressional races.
Rep. Rob Portman of Ohio, who chairs the House Republican leadership, and House Deputy Whip Roy Blunt of Missouri, had also been seen as possible successors to Armey.
Both both Portman and Blunt had decided to back DeLay for the post as House Republican leader, senior leadership aides said.
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