Senator Gregg withdraws as Obama commerce pick

U.S. Senator Judd Gregg (R-NH) speaks to the media about the bailout package for the current financial and banking crisis, on Capitol Hill in Washington, September 28, 2008.

WASHINGTON (Reuters) - Republican Senator Judd Gregg said on Thursday he was withdrawing as President Barack Obama's nominee to be Commerce secretary because of political differences, another blow to the president's attempt to broaden support across party lines.

Gregg said he pulled out because of disagreements with the Democratic president over issues including the economic stimulus package and the country's census, which the Commerce Department would be responsible for implementing.

"Prior to accepting this post, we had discussed these and other potential differences, but unfortunately we did not adequately focus on these concerns," the New Hampshire senator, considered a moderate Republican, said in a statement.

"We are functioning from a different set of views on many critical items of policy," he said. "Obviously the president requires a team that is fully supportive of all his initiatives."

In a news conference, Gregg apologized for a decision he said he realized was "unfair in many ways."

"I just realized it wouldn't be a good fit," Gregg said, adding that it "would be a bigger mistake" to stay.

The withdrawal will send Obama to the well for a second time to look for a new commerce secretary. His first pick, New Mexico Governor Bill Richardson, withdrew because he was facing a legal inquiry.

In a scathing rebuke, the White House said that it regretted that Gregg withdrew after he had pursued the job.

"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," said White House spokesman Robert Gibbs.

Gregg said there was nothing in background checks that had played a role in his decision, a problem that has plagued other Obama nominees.

In addition to these two withdrawals, Obama has seen two high-profile nominations implode because of tax problems -- former Senator Tom Daschle to head the Department of Health and Human Services and Nancy Killefer to be the country's chief performance officer.

Obama's Treasury Secretary, Timothy Geithner, also had problems during his Senate confirmation process because he failed to pay certain taxes on time.

Obama took over from President George W. Bush last month vowing to boost bipartisan cooperation in Washington, where political bickering has stalled most legislation over the last several years.

He has spent his first three weeks in office struggling to build broad bipartisan support for a massive economic stimulus package, which is headed for passage in Congress this week. Entrenched philosophical differences with most Republicans over tax cuts and spending stymied that effort.

OTHER CANDIDATES IN THE WINGS

Gregg's withdrawal could prompt Obama to reconsider Silicon Valley executive John Thompson to head the commerce department. Many lobbyists believed he had been in line to get the post before Gregg was tapped.

Thompson is chairman and chief executive officer of Symantec Corp, the No. 1 software security company best known to consumers for its Norton product line.

Another name sometimes mentioned for the post has been former Representative Harold Ford, a Democrat from Tennessee who now heads the Democratic Leadership Council.

On the census, several Republicans in Congress have complained the Obama administration was taking control of the count away from the Commerce Department -- a politically sensitive move as the 2010 census will help determine redistricting of congressional seats.

The White House issued a statement saying the Census would remain "free from politicization" and would not be moved from the Commerce Department.

Gregg had said he wanted to vote for Obama's economic stimulus plan as it was being developed, but when he was nominated by Obama earlier this month he did not participate in votes as the measure worked its way through the Senate.

The New Hampshire lawmaker, seen as a moderate representing a state that has increasingly shifted toward supporting the Democratic party, was welcomed with open arms by his Republican colleagues in the Senate.

"Senator Gregg made a principled decision to return and we're glad to have him," said Senate Minority Leader Mitch McConnell.

(Additional reporting by Doug Palmer; editing by David Storey)