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Obama s cabinet headache

WASHINGTON, Jan 5 – President-elect Barack Obama arrived in Washington to start a new life, but already faced his first major embarrassment over his cabinet line-up as his choice for commerce secretary was forced to pull out.

New Mexico Governor Bill Richardson said he was withdrawing his name from contention for the economic job owing to an investigation into a financial company doing business with his state.

Richardson’s withdrawal came hours before Obama left Chicago for Washington to join his family at a hotel overlooking the White House and begin the final countdown before his inauguration as president on January 20.

After winning plaudits for a smooth transition process thus far, Obama must now rapidly find a replacement to Richardson on top of crafting a mammoth economic rescue bill that Democrats in Congress hope to pass early next month.

The package, worth up to one trillion dollars, is needed to prevent a "much deeper economic downturn" with the United States already in the grip of recession, Obama said Saturday in a weekly radio address.

In a joint statement issued with Obama, Richardson said he had asked the president-elect to pull his name from the Senate confirmation process with "great sorrow."

"But a pending investigation of a company that has done business with New Mexico state government promises to extend for several weeks or, perhaps, even months," he said in the statement, without going into details.

The Commerce Department is not in the front lines of US economic policy-making, but Richardson, a heavy-hitter who was said initially to be in consideration for the State Department, becomes the first big name to quit the putative Obama administration.

The withdrawal came a month after Obama nominated the top Hispanic politician to the Commerce Department on December 3, when a federal grand jury investigation into the company was already under way.

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"It is a measure of his willingness to put the nation first that he has removed himself as a candidate for the cabinet in order to avoid any delay in filling this important economic post at this critical time," Obama said.

The federal grand jury in Albuquerque is investigating how the company, CDR Financial Products, won lucrative contracts to advise New Mexico state authorities four years ago after donating money to Richardson.

Richardson, insisting he had done nothing wrong, said he would continue as New Mexico governor "for now" as the investigation into the California-based firm plays out.

On Monday, the president-elect was to hold a flurry of meetings on Capitol Hill and convene his economic team — now shorn of Richardson.

Obama landed at Andrews Air Force Base, at 7:00 pm (0000 GMT), and then shuttled by motorcade to Washington to join his wife, Michelle, and their two daughters Malia, 10, and Sasha, 7, who are preparing to enter the exclusive Sidwell Friends School Monday.

The incoming first family are staying at the luxury Hay-Adams Hotel, with a view of the White House before moving to the president’s official guest home, Blair House, on January 15.

About 100 well-wishers and two dozen Gaza-offensive protesters braved the winter chill to greet Obama, many straining to catch a glimpse of him over a heavy security presence encircling the historic hotel.

Discussing Obama’s top domestic priority, House of Representatives Majority Leader Steny Hoyer told Fox News Sunday that Democrats in Congress hope to approve the economic stimulus plan by early February.

While confirming the package would total from 775 billion to one trillion dollars, Hoyer said it was unlikely lawmakers would get the recovery package passed before inauguration day as initially hoped.

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Senate Majority Leader Harry Reid was more circumspect about the bill’s timing, but also stressed that speed was essential.

"We’ll be working nights. We’re going to be working weekends. We’re going to get this done," he said on ABC, pledging to reach out to Republicans who are fretting about the prospect of a far-reaching expansion of government.

Obama got a taste of Republican opposition to come after the New York Times reported Sunday that he was considering a major expansion of government health care insurance and unemployment benefits in the stimulus bill.

Senate Minority Leader Mitch McConnell said those proposals amounted to "very big systemic changes" that would permanently alter the economy, and demanded further debate.


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