Kentucky Sen. Jim Bunning, the most endangered Republican up for reelection in 2010, appears headed for retirement after giving his leading GOP rival the blessing to prepare to run for his seat next year.
Bunning's retirement would be a huge victory for national Republicans who have grown increasingly nervous that the 77-year-old two-term senator would lose a critical race as the party tries to cling to its diminished minority in the Senate.
On Thursday afternoon, Kentucky GOP Secretary of State Trey Grayson announced that he would form an exploratory committee to run for Bunning's seat - a move that Kentucky GOP operatives say is a precursor to Bunning's retirement. Grayson's entry will come as a relief to Kentucky Republicans and Senate GOP leaders, who may now have reason to believe their party could hold on to this seat.
"He told Trey to do this," one senior congressional official said of Bunning. "Why else would he tell his main rival to prepare for a run?"
Added one senior Senate GOP aide: "For the first time, we now know who the Republican nominee will be next November and that's Trey Grayson. He's by far the best-positioned Republican to be competitive and hopefully win in the fall. It's not even close."
Asked to comment outside the Senate chamber Thursday, Bunning said: "I won't talk to you."
Even without Bunning in the field, the Democratic Senatorial Campaign Committee still plans on targeting the race.
"We feel that Democrats can pick up Kentucky's senate seat whether Sen. Bunning or Senator McConnell's handpicked candidate Trey Grayson is running," said Democratic Senatorial Campaign Committee spokesman Eric Schultz.
In a statement, Grayson said he doesn't plan on running against Bunning and is merely making preparations to run in case Bunning does not run for a third term.
"I have formed an exploratory committee to allow me to formally raise and spend funds as I seek support for a bid for U.S. Senate," Grayson said in a statement.
"I have no plans to run against Sen. Bunning. This exploratory committee will allow me to travel the commonwealth, meet with potential supporters and lay the foundation for a campaign."
One Kentucky Republican operative said that the seeds of Bunning's decision were planted at a public event back in Kentucky that both Grayson and Bunning attended several weeks ago. Bunning sensed that Grayson was getting anxious waiting for him to decide whether to run for re-election, so he told Grayson that he should just form an exploratory committee.
Grayson then met with GOP operatives to discuss the logistics behind forming an exploratory committee. Earlier this week, Grayson requested a face-to-face meeting with Bunning in Washington to announce he was taking his advice to run -- and made sure to qualify his statement by saying he wasn't going to challenge Bunning in the race.
Grayson has tapped Senate Minority Leader Mitch McConnell's pollster Jan von Lohuizen to handle polling for his exploratory committee - a sign that McConnell has given the green light for Grayson to run.
"Trey did this with Bunning's blessing," said van Lohuizen.
Earlier this week, Grayson flew to Washington to meet with Bunning and tell him of his plans to form the exploratory committee, according to a Kentucky-based GOP operative. The operative said it's a clear sign that Bunning does not plan to run for another term.
"Jim Bunning is the one who initiated the conversations with Trey to take this step. This wasn't Trey lashing out. This is Jim Bunning reaching out to Trey and offering this idea," said the GOP operative.
Bunning's spokesman could not be immediately reached for comment, but GOP sources expect Bunning - whose lackluster fundraising and erratic behavio has put his reelection bid in imperil - to eventually make his announcement official.
"He's either acting in a really odd manner or graciously setting the table for preparing for the strongest candidate to be viable and ready to run as soon as he officially retires," said a senior GOP aide. "Why would someone anoint the strongest statewide Republican to form a committee to run against him?"
With Bunning in the race, Democrats viewed the Kentucky Senate seat as one of their leading pickup opportunities, given the two-term senator's tenuous political standing. Two statewide Democratic officials - Attorney General Jack Conway and Daniel Mongiardo - entered the race in the last several months, and led Bunning in many public polls.
A Public Policy Polling survey conducted earlier this month showed Bunning with just a 28 percent approval rating - exceptionally weak for an incumbent who hasn't been tainted by scandal. The poll showed every prospective Democratic challenger defeating Bunning.
Given his tenuous political standing, Bunning had struggled to raise money for another term. Despite the prospect of a tough reelection in 2010, Bunning reported raising just $263,000 in the first quarter - well behind the pace set by Mongiardo. GOP sources told POLITICO in January that leading Republican fundraisers in Kentucky were hesitant to raise money for the second-term senator.
But now that Grayson appears to be Bunning's heir apparent, Republicans are more confident of holding a seat in a solidly Republican state that John McCain carried with 58 percent of the vote last year.
By Josh Kraushaar and Manu Raju