Gregg also announced that he will not seek re-election to the Senate.
"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," Gregg said in the statement.
The census issue stems from the White House's desire to assert more direct control over the population survey, which is issued by the government every 10 years.
"It sounds like the critical issue became the director of the census reporting directly to the White House instead of to the commerce secretary," government professor Dean Lacy said in an interview.
Gregg said in his statement that his withdrawal was unrelated to his vetting process.
Concerns regarding tax returns and state contracts led to the withdrawal of earlier Obama cabinet candidates, including another commerce secretary nominee, Gov. Bill Richardson, D-N.M., and former Sen. Tom Daschle, D-S.D., who had been slated to head the Department of Health and Human Services.
John Thompson, CEO and Chairman of the Board of Directors of Symantec Corporation, a computer software company, is likely to become the frontrunner for commerce secretary, Lacy said.
Gregg's withdrawal in all probability will not affect the recently announced 2010 Senate campaign of Rep. Paul Hodes '72, D-N.H., according to Joan Ashwell, chair of the Strafford County Democratic Committee and a long-time New Hampshire political operative.
"Paul Hodes was intending to run whether Gregg steps down or not," she said. "For [Hodes], it really doesn't make any difference except he's in earlier than he maybe would have been."
Ashwell added that Hodes will still be competitive in the race. The withdrawal might have hurt Gregg's Senate re-election campaign if he had decided to run again, she said.
"This was rude to do something like this or a little bit arrogant at least," she said.
Many New Hampshire polticians "bended over backwards" to support Gregg's nomination, Ashwell said.
"I realize that to withdraw at this point is really unfair in many ways," Gregg said at a Thursday press conference in Washington, D.C.
Gregg, who was elected to the House of Representatives in 1981, served as governor of New Hampshire from 1989 to 1993 and was then elected to the Senate. Gregg has three children, all of whom attended Dartmouth -- Molly Gregg '00, Sarah Gregg '02 and Joshua Gregg '06. Gregg received an honorary degree from Dartmouth in 2006.
Gregg worked to channel millions of dollars in federal funds to Dartmouth during his time in the Senate, according to federal documents. The College received almost $100 million in non-shared earmarks between 1993 -- the year that Gregg started his first Senate term -- and 2003, according to a database compiled by The Chronicle of Higher Education.
Calls to the White House press office, Gregg's office and Hodes' office were not returned by press time.
