Sen. Robert Byrd has voluntarily stepped down as chairman of the powerful Appropriations Committee, amid reports that Majority Leader Harry Reid wanted him replaced.

Sen. Byrd (D-W.Va.), who will turn 91 this month and whose health has been in decline, issued a statement Friday saying he would give up his gavel in the 111th Congress.

Sen. Daniel Inouye will be the new chairman in January, Reid said in a statement. Byrd had expressed his wishes for the Hawaiian Democrat to succeed him.

Byrd, the longest-serving senator in U.S. history said the Democrats victories this week led to his decision. He was named chairman of the panel in 1989, and has served in that role or as the ranking Democrat under Republican rule since. He will remain a committee member as well as chairman of the Homeland Security Subcommittee.

“A new day has dawned in Washington, and that is a good thing,” Byrd said. “For my part, I believe that it is time for a new day at the top of the Senate Appropriations Committee.”

Byrd’s health has been a question all year. He was hospitalized three times, prompting some of his colleagues to question whether he was up to one of the most demanding and important roles in the Senate.

In April, Byrd moved to quell his critics by chairing a hearing on the Iraq war and afterward telling those who questioned his capacity to “shut up.”

Despite Byrd’s own assurances, Reid has been under pressure to resolve the issue before President-elect Barack Obama takes control of the White House and Democrats return in the 111th Congress with their widest margins in decades.

Privately, senior Democratic aides say the methods used to oust Byrd were what irked the West Virginia senator — that given the chance to decide on his own, the senator eventually recognized his legacy was at stake.

“He wanted to make this decision at a time of his own choosing,” one aide said. “He did this not because Harry Reid wanted him to step down, but because he felt his career was important and he didn’t want to be remembered otherwise. He’s never let his colleagues down and didn’t want to now.”

In the end, Byrd left voluntarily without putting Reid in a position to force the issue later this month when Democrats return to reorganize for the next Congress.

“Today, Senator Robert Byrd announced his decision to hand over his gavel as Chairman of the United States Senate Appropriations Committee,” Reid said in a statement. “My Democratic colleagues and I accept his decision with tremendous gratitude for his outstanding tenure as Chairman."

Inouye was gracious toward Byrd for his confidence.

“I am humbled by Chairman Robert Byrd’s recommendation that I succeed him as the next Chair of the Senate Appropriations Committee.  I hope that I am sufficiently prepared to succeed my mentor who has assisted and guided me over the past 30 years, and in particular, during the years that he has led this important panel with distinction."

Byrd acknowledged in his own statement that it was time to move on.

"I have learned that nothing is quite so permanent as change,” Byrd said in the statement.  “It is simply a part of living and should not be feared.  To be serving in the Senate at such a momentous time in our history fills me with enormous pride.”

“I want to stress that this is a decision I made only after much personal soul searching, and after being sure of the substantial Democratic pickup of seats in the Senate. I am now confident that stepping aside as Chairman will not adversely impact my home state of West Virginia.”

Inouye, the first Japanese-American elected to Congress and only slightly younger than Byrd at 84, is decorated war hero who lost his arm in World War II.

“There is no question that Senator Byrd’s decision was eased by the knowledge that the gavel will continue to be in such capable hands,” Reid said.

Byrd’s statement was followed by tributes from members of the Appropriations Committee, including Sen. Patty Murray (D-Wash.), who has handled much of Byrd’s workload as his health deteriorated. Murray has served with Byrd on the panel for 16 years.
 
“Senator Byrd taught me, from my very first day in the Senate, that no one person is bigger or more important that the Senate as a whole,” Murray said in a statement. “Senator Byrd has always put the Constitution and the Senate ahead of himself.  Today is just one more example of that legendary affection for the Senate.”