'I Couldn't Be Judd Gregg'

Republican Sen. Judd Gregg abruptly withdrew his nomination as President Barack Obama’s commerce secretary Thursday, telling Politico that he “couldn’t be Judd Gregg” and serve in the Cabinet.

The White House – where some aides were caught off guard by the withdrawal — responded harshly to Gregg’s announcement, portraying Gregg as a fickle candidate.

In a statement, White House Press Secretary Robert Gibbs said that Gregg had “reached out” to Obama and sought the Commerce nomination – and that he’d promised that, “despite past disagreements about policies, he would support, embrace, and move forward with the president’s agenda.” 

Obama himself told the Springfield, Ill., State Journal Register this afternoon that the Gregg move was “something of a surprise.”

Although one White House aide said he was “blindsided” by the news, another official said the White House knew it was coming Wednesday. Gregg signaled to the White House earlier in week he was having second thoughts and Obama met with him Wednesday at the White House to urge him to stay, White House Chief of Staff Rahm Emanuel said in an interview.

“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,” Gibbs said. “We regret that he has had a change of heart”.

In an interview with Politico Thursday afternoon, Gregg said he “should have faced up” to the conflicts he felt earlier. 

“I’ve been my own person, and I began to wonder if I could be an effective team player,” the New Hampshire Republican said. “The president deserves someone who can block for his policies. As a practical matter I can contribute to his agenda better—where we agree—as a senator and I hope to do that.”

“The fault lies with me,” Gregg continued. He refused to discuss any conversations he had with Obama, saying, “I may have embarrassed myself but hopefully not him.”

In a press conference Thursday evening, Gregg also said he will “probably not” run for reelection to the Senate in 2010. If he retires from the Senate, Democrats may get a consolation prize for this embarrassing turn of events – one of their own in Gregg’s Senate seat.

Emanuel, speaking to reporters Thursday afternoon, said there aren’t any “hard feelings. It is better that it happened now than after the fact.” But Emanuel added that “If I said it wasn’t a disappointment that would lack any credibility.”

Gregg seemed to dispute the White House's statement that he had approached the administration seeking a job. "Well, one of the nice things about the job is that everybody has a different recollection of what happened ... The simple fact is that I did not campaign for this job."

"I don't think they sought me out and I don't think I sought them out. I think an intermediary suggested me and they thought it was a good suggestion."

In his statement announcing his withdrawal, Gregg cited his problems with the economic stimulus bill, as well as partisan disagreements over how to run the Census as reasons for pulling his nomination. He was quick to point out that there was nothing in the vetting process that made him yank his own nomination – steering clear of the controversies that killed the Health and Human Services nominee Tom Daschle and chief performance officer nominee Nancy Kileffer, who both withdrew after tax problems.

Ultimately, Gregg said he and Obama “are functioning from a different set of views on many critical items of policy.”

Now, Obama has to make a third try in his effort to find a Commerce secretary. New MexicoGov. Bill Richardson withdrew last month due to an ongoing investigation in his home state.

Further, the president will face fresh questions about his deliberation and vetting process for cabinet nominees as he continues to build his administration.

A senior administration official, plainly annoyed at the Gregg’s change of heart, emphasized that the Republican was the one who reached out to them.

“He approached [Senate Majority Leader Harry] Reid and said he’d be interested in serving,” recalled the official. “Sen. Reid contacted us and we reached out.”

Gregg, in his statement, said he admires Obama’s “willingness to reach across the aisle.”

“However, it has become apparent during this process that this will not work for me as I have found that on issues such as the stimulus package and the Census there are irresolvable conflicts for me,” Gregg said. “Prior to accepting this post, we had discussed these and other potential differences, but unfortunately we did not adequately focus on these concerns. We are functioning from a different set of views on many critical items of policy.” 

Sen. Patty Murray (D-Wash.), a member of Democratic leadership, said she expected Gregg to have a smooth confirmation and learned about the decision when the news broke Thursday afternoon.

"I had heard no objections whatsoever," Murray said. "I'm as surprised as anybody."

While the Obama administration now has another embarrassing cabinet nomination withdrawal to deal with, Republicans were already celebrating Gregg’s decision to stay in the Senate.

“Sen. Gregg made a principled decision to return and we’re glad to have him,” said Senate Minority Leader Mitch McConnell (R-Ky.). “He is among the smartest, most effective legislators to serve in the Senate—Democrat or Republican—and a key advisor to me and to the Republican Conference. It’s great to have him back.”

Gregg had been talking to McConnell about withdrawing for the last couple days, according to a Senate aide.

"It dawned on him that it was a bad call on his part," a GOP aide said. "[Gregg] came to the conclusion that he would have a bigger impact as a senator than as a Cabinet officer."

Sen. Lamar Alexander (R-Tenn.) was equally happy to have one of the top financial minds in the GOP securely on the Republican side of the Senate aisle: “Judd Gregg would have been a strong Cabinet member, but it is good for the country and the Senate that he will continue to be a Republican senator.”

At least one group of Democrats was happy with the development – the Congressional Black Caucus – which was worried about how Gregg would handle counting of minorities in the 2010 Census, which will be one of the major tasks of whoever ends up becoming Commerce Secretary.

"When Sen. Gregg was first nominated members of the CBC expressed concerns about his commitment to core functions of the commerce department like the census and minority and women owned businesses,” said Rep. Barbara Lee, Chairwoman of the Congressional Black Caucus. “In his statement today, Gregg expressed 'irresolvable conflicts' on these very same issues. In light of this, we feel that his decision to withdraw is in the best interest of all parties."

The Gregg news comes as a caretaker Republican, Bonnie Newman, prepared to serve out the remainder out Gregg’s term and prominent members of both parties in the Granite State begin to line up for the 2010 race.

Ben Smith, Amie Parnes, Manu Raju and John Bresnahan contributed to this story.