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Gracious Rahm Walks Back Harsh Gregg Press Release

Reporters from the major papers, print wire sources — and Politico — were scheduled to sit down with Barack Obama’s Chief of Staff Rahm Emanuel early this evening to discuss the stimulus bill. Instead, the announcement by Judd Gregg, 30 seconds before Barack Obama took the stage at a Caterpillar plant in Peoria, Illinois, that he was withdrawing from the Commerce Secretary nomination, threw the meeting into quick topical recalibration.

FiveThirtyEight was not in the room with Emanuel, but was at the White House at the time. Via piecing together reporting from those articles and other sources, we have a pretty good triangulated idea of what was said.

According to Emanuel, Gregg’s decision was not unexpected — Gregg had called Emanuel to express “second thoughts” about the post three days ago. “You could tell by Monday, it was the sense that, you know, he must’ve over the weekend been kind of noodling on something and he just kind of became uncomfortable with what this was.”

During the initial conversation with Emanuel, Gregg requested to speak to the President. Obama and Gregg met yesterday at the White House, but it was unclear whether that was where the final decision was made.

Gregg had wanted to wait on the announcement, until possibly after the stimulus bill had passed, but his withdrawal had leaked to a few of his Republican Senate colleagues this afternoon and he felt he couldn’t wait.

When pressed about the seeming surprise in the White House press office about the timing of the announcement, Emanuel remained gracious, in contrast to the blunt release put out earlier. “I think you’ve got to take what (Gregg) said at his word.”

“There’s not hard feelings. I want to repeat it to you,” said Emanuel.

Emanuel said the idea for Gregg as Commerce Secretary had come to the White House through Harry Reid, that it was not the White House’s original idea.

Moreover, while Emanuel didn’t want “to play psychologist, to get into (Gregg’s) head,” he insisted that the Census was not the root cause. “Trust me, the Census was not” the issue, he insisted.

Emanuel admitted the situation with the withdrawal of a second Commerce Secretary, sandwiched around Tom Daschle’s aborted bid for HHS Secretary, was “unfortunate” and “disappointing” for the White House, but that was as far as he went, and continued to strike a gracious tone.

“I think (Gregg’s) a very principled person. And he takes his role seriously. I believe he seriously wanted to do the Commerce job, he went into it eyes open, and realized after awhile it was just not going to be, as he said, the right fit. Full stop. I don’t think you can go back from that.”

Beyond the discussion of Judd Gregg, Emanuel discussed the stimulus negotiations, defended the White House on criticism of its handling of Tuesday’s Geithner announcement, and pointed to the upcoming agenda.

On the stimulus, Emanuel was questioned about the alternative minimum tax that many had argued was not stimulative, but was a key Obama concession. He admitted that while he might regret the statement, the $70 billion AMT piece of the bill was “the price for getting the deal done.”

“In the end, what does it take to produce 3.5 million jobs and X amount of votes?”

He also explained that Obama’s initial concessions on reducing the size of the “make work pay” program was a critical signal for fostering an attitude of compromise. “We thought that by putting some skin in the game first, it would get people off of positions that they were trying to hold. And at the end of the day when you look at it, that’s exactly what happened.”

Emanuel was asked the dreaded “some say” question frame — as in, “What is your reaction to some who are saying it’s ‘amateur hour?'”

He scoffed at the premise. “We’ve passed some of the most major comprehensive sweeping legislation as it relates to economic activity. Ever. In a three week period of time.”

Emanuel ticked off the list: 11 million more children with health care, Lily Ledbetter on gender pay equity, new policy on Guantanamo, torture, new car fuel efficiency standards, and a process begun for a national energy policy.

Pressed on lessons learned from the recent stimulus negotiations, Obama’s Chief of Staff acknowledged that during the second week of the stimulus “where for about four days I don’t think we were sharp” on messaging. “That’s where we allowed, rather than jobs being the message, bipartisanship being the message.”

“There’s an insatiable appetite for the notion of bipartisanship” in Washington, he said.

Emanuel also disputed the accuracy of any public polling showing a drop in stimulus support: “It never dipped, unlike indicated, not in our stuff.”

As for what’s next on the agenda, Obama’s top aide listed financial regulatory reform and a “major” housing initiative as other legs of the economic stool, as well as renewable portfolio standards on energy and stem cell legislation. Of course, Obama’s first State of the Union and the budget bill presentation are also on the docket.