Just in from the McCain campaign, a statement from Phil Gramm:

It is clear to me that Democrats want to attack me rather than debate Senator McCain on important economic issues facing the country. That kind of distraction hurts not only Senator McCain’s ability to present concrete programs to deal with the country’s problems, it hurts the country. To end this distraction and get on with the real debate, I hereby step down as Co-Chair of the McCain Campaign and join the growing number of rank-and-file McCain supporters.

UPDATE: From the Obama campaign:

The question for John McCain isn’t whether Phil Gramm will continue as chairman of his campaign, but whether he will continue to keep the economic plan that Gramm authored and that represents a continuation of the polices that have failed American families for the last eight years.