Obama taps Republican for Commerce

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WASHINGTON (CNN) -- President Barack Obama extended a major political olive branch to the GOP Tuesday, nominating New Hampshire Republican Sen. Judd Gregg to head the Commerce Department.

Gregg, a third term Republican and leading fiscal conservative, has "seen from all angles what makes our economy work ... and what keeps it from working better," Obama said at the White House. "Clearly Judd and I don't agree on every issue ... but we do agree on the urgent need to get businesses and families back on their feet."

"Judd's a master of reaching across the aisle to get things done," Obama added. He will be an "able, persuasive ambassador for industry."

"We are in the middle of a very difficult economic time," replied Gregg, who has chaired a key Senate commerce subcommittee, "This is not a time for partisanship ... This is a time to govern and govern well."

"I believed it was my obligation to say yes" when asked to join Obama's cabinet, he noted.

If confirmed, Gregg will be the third Republican to join Obama's cabinet, following Defense Secretary Robert Gates and Transportation Secretary Ray LaHood.

One potential stumbling block to Gregg's nomination had been the issue of the veteran Republican lawmaker's replacement in the Senate.

Gregg's Senate term is up in 2010. If he is confirmed as commerce secretary, New Hampshire Gov. John Lynch could name a Democrat to replace him, potentially giving the Democrats the 60-seat majority needed to overcome Republican attempts to use filibusters to block legislation.

Democrats currently hold 58 seats in the Senate, with one seat - in Minnesota - still subject to legal challenge.

In a statement issued Monday, however, Lynch said Gregg had told him he would not give up his seat "if it changed the balance in the Senate."

"It is important that President Obama be able to select the advisors he feels are necessary to help him address the challenges facing our nation," Lynch added. "I will name a replacement who will put the people of New Hampshire first and represent New Hampshire effectively in the U.S. Senate."

Senate Republican leader Mitch McConnell said Sunday that Gregg had given him a similar guarantee.

New Hampshire political sources from both parties said Monday that Lynch will name Gregg's former chief of staff, Bonnie Newman, to replace him. Newman, most recently the interim president of the University of New Hampshire, also worked in the White House during the first Bush administration and was an assistant commerce secretary during the Reagan administration.

Obama first nominated New Mexico Gov. Bill Richardson to be commerce secretary. But Richardson withdrew in early January, citing the distraction of a federal investigation into ties to a company that has done business with his state.

- CNN's Ed Henry and John King contributed to this report.