Obama Picks Gregg For Commerce Secretary President Obama is set to announce his choice of Judd Gregg for commerce secretary on Tuesday. The Republican senator from New Hampshire helped craft the $700 billion Wall Street bailout package last year. The state's Democratic governor vows to appoint a Republican to replace him.

Obama Picks Gregg For Commerce Secretary

President Obama on Tuesday announced another Republican appointee to his Cabinet, saying as commerce secretary that Sen. Judd Gregg would be a trusted member of the Cabinet who shares an urgent desire to get Americans "back on their feet."

If confirmed, the 61-year-old New Hampshire Republican could help Obama push past GOP resistance to the more than $800 billion economic stimulus package winding its way through Congress.

Obama joked that Gregg was "famous, or infamous on Capitol Hill for his strict fiscal discipline," adding that the two "agree on the urgent need to get businesses and families back on their feet."

Gregg's reputation as a fiscal conservative could bolster the administration's credibility among Republicans who have objected to the stimulus plan's price tag. He helped craft the Wall Street bailout last year and was one of a handful of Republicans who voted to release the second half of the $700 billion financial rescue package to the new administration.

Now is the time to put aside "stale ideology and partisan politics," Obama said.

Gregg will be charged with helping promote U.S. business at home and abroad and will have a voice in crafting administration policy. He currently is the ranking Republican on the Senate Budget Committee.

The nominee praised Obama for his administration's "bold, comprehensive plan to get this country moving again." He said it was "a time to govern and govern well."

Gregg had said he would not accept the appointment if a Democrat were appointed to serve out his Senate term.

On Monday, New Hampshire's Democratic Gov. John Lynch said there's an "understanding" that he'll nominate a Republican replacement for Gregg so as not to upset the current political makeup of the Senate. Bonnie Newman, a former chief of staff to Gregg, is expected to serve out the remaining two years of his term and not run for another.

Obama's first pick for commerce secretary, New Mexico Gov. Bill Richardson, withdrew from consideration in January in the face of a legal inquiry in an embarrassing misstep for the incoming administration.

Two Obama picks, Tom Daschle and Nancy Killefer, withdrew their nominations on Tuesday because they ran into trouble with tax problems. Daschle, who had been tapped for health and human services, withdrew Tuesday afternoon hours after Killefer, who had been picked for the post of chief performance officer, had retracted her name from consideration.

Timothy Geithner also faced questions about his taxes before he won Senate confirmation as Obama's Treasury secretary.

From NPR staff and wire reports

Deal For Gregg's Senate Seat Riles N.H. Democrats

If President Obama, as expected, names Republican Sen. Judd Gregg of New Hampshire to lead the Commerce Department, the move would no doubt burnish Obama's bona fides as a leader seeking to ameliorate Washington partisanship.

And it would certainly please the Chamber of Commerce and the anti-tax organization Club for Growth, both of which have awarded Gregg high ratings for advocating their agendas.

But in New Hampshire, the prospect of Obama tapping the conservative two-term senator — and a behind-the-scenes deal to ensure that the state's Democratic governor names a Republican to serve out the 21 months remaining in Gregg's term — has uncorked a world of controversy.

Brouhaha In The Granite State

"It's a terrible position that President Obama has put Gov. John Lynch and New Hampshire in," says state Rep. Jim Splaine, a Democrat from Portsmouth. "The governor is between the White House sandstone and the statehouse granite."

White House officials confirmed on Monday that Obama will name Gregg, 61, the scion of a prominent New Hampshire political family and top Republican on the Senate's budget committee, to the Commerce post. Monday, Gregg announced that he would not accept the appointment unless Lynch guarantees a Republican replacement in the Senate. In recent days the senator, who won re-election in 2004 with 66 percent of the vote, has assured his party leadership of the same.

And the names of potential placeholders have emerged, from J. Bonnie Newman, who served in both the Reagan and George H.W. Bush administrations and was an interim president of the University of New Hampshire, to former Gov. Walter Peterson.

"John Lynch knows that if Barack Obama nominates Judd Gregg, he absolutely wants Judd Gregg in the Cabinet," Splaine says. "To make that work, the governor would have to agree to Gregg's request for his filler."

In a statement released Monday, Lynch as much as confirmed that he would name a Republican to Gregg's seat if a vacancy occurs.

"It is important that President Obama be able to select the advisers he feels are necessary to help him address the challenges facing our nation," he said. "Sen. Gregg has said he would not resign his seat in the U.S. Senate if it changed the balance in the Senate. Based on my discussions, it is clear the White House and Senate leadership understand this as well."

The state's political circles have been buzzing about the potential fallout — particularly for the highly popular governor. Lynch was elected to a third term last fall with 70 percent of the vote; he captured 74 percent of the vote in 2006.

The governor could be seen as ceding to Republicans a seat that, if Gregg leaves, could have been used to give the Senate's Democratic caucus the 60 votes needed to block a filibuster. (That number includes independent Sens. Joseph Lieberman of Connecticut and Bernie Sanders of Vermont and an assumption that Democrat Al Franken of Minnesota would eventually prevail on challenges to his election.)

"What's going to happen, only Gov. Lynch knows," says Lenore Patton, chairwoman of the Rockingham County Democrats in southern New Hampshire. "But what I feel is that people shouldn't be making deals like that."

"You can't mortgage the future," Patton says.

A Risk For 2010

Democrats are nervous about a replacement deal because it could leave a Republican placeholder in office until 2010 and potentially help soften the ground for another run by former Republican Sen. John Sununu.

Sununu, who was defeated last fall by Democrat Jeanne Shaheen in a state that has been slowly turning Democratic, could devote his energies to getting elected in 2010, they say. And he also would be guaranteed the support of the state Republican Party: Sununu's father, also John Sununu, a former state governor and White House chief of staff to President George H.W. Bush, was just elected state party chairman.

But Republicans are also skeptical.

Fergus Cullen, who just stepped aside after two years as GOP chair in New Hampshire, says he's puzzled by the rumored Gregg deal.

"The politics don't make sense," Cullen says. "If Lynch puts a Republican in the seat, he becomes a paper-pusher in someone else's deal that will cause him political pain."

But Andrew Smith, who heads the University of New Hampshire's Survey Center, says that he believes New Hampshire Democrats are fretting over nothing. Gregg is "the second most popular politician in the state, next to the governor," Smith says. So if Gregg decided to stay and run for re-election in 2010, he would still "win fairly easily."

"The state may be going Democratic, but not that quickly," Smith says.

By helping move Gregg out of his Senate seat, Lynch could conceivably be easing the way for a Democrat to take it over, while also being seen as a proponent of bipartisanship — just like the president. And with his historic popularity, the governor can afford to do a little political engineering.

Obama won the state by 9 points last fall, and many Democrats say they disagree with Smith's assertion that Gregg would be a shoo-in in 2010. With the political winds blowing in the Democrats' favor, party leaders like Patton say that Gregg would face stiff challenges.

"If he were that entrenched, you'd have to scrape the barrel to convince someone to run against him to help the party," Patton says. "But I know of at least five people who are interested in running against him."

But, Smith says, "You can spin this in a lot of good ways if you're John Lynch."

With a nomination expected soon, that spinning is expected to begin shortly.