Declaring himself “bone tired,” House Appropriations Chairman David Obey (D-Wis.), the third-most-senior Member of the House, announced Wednesday he will not seek re-election in November.

The move surprised even senior Democrats, outside the top leaders, and amounts to a severe morale knock to a party already facing grim midterm elections losses.

Obey, 71, has served for more than four decades as the Representative of Wisconsin’s northwestern 7th district, and though he won most of his races by overwhelming margins, he was facing his toughest re-election fight in years. But he said he has already accomplished much of what he had hoped and could reasonably expect to get done — pointing to the $787 billion economic stimulus package he shepherded last year and the sweeping health care overhaul enacted earlier this year. “There’s a time to stay and a time to go, and this is my time to go,” Obey said at a midday news conference on Capitol Hill.

But Obey also highlighted nagging frustrations with the inability of the political system to make other fundamental changes, namely correcting growing income inequality and implementing public financing of campaigns. He called them the biggest disappointments of his career. The famously irascible Wisconsin Democrat said he first eyed retirement from the House after the 2000 elections but became “so angered by the policies of the Bush administration, I decided to stick around as long as he was here.”

This year brought the decision back into focus. Obey saw two longtime allies on the panel — Rep. John Murtha (D-Pa.) and former Rep. Charlie Wilson (D-Texas) — die, both of whom were only about five years older than him. He said he was wary of facing another grueling round of redistricting. And he pointed to the frustrations of dealing with a national press corps that he said is “increasingly focused on trivia,” calling the decline of the news industry “a national catastrophe.”

House Democratic leaders have been in talks with Obey for months about his future, according to one aide who said the lawmaker’s inclination to retire became increasingly clear in recent days. House Majority Whip James Clyburn (D-S.C.) said the move “was not entirely unexpected” but said he was still “highly disappointed.”

“It’s just another example of the frustrations that a lot of people have with the way things are being done here,” he said.

Rep. Charlie Rangel (D-N.Y.), ousted as Ways and Means chairman earlier this year, likewise struck a sympathetic note. “I don’t remember when the atmosphere of this Congress has been more polarized,” he said. But Rangel said he didn’t expect Obey’s decision to inspire other Democratic retirements. “I don’t see in any way how that has an adverse effect on our ability to maintain the majority. Not at all,” he said.

The news of Obey’s decision had barely begun reverberating around Capitol Hill early Wednesday before discussion turned to possible successors to the top Democratic slot on the Appropriations panel. If the party follows seniority, Rep. Norm Dicks (D-Wash.) — who only recently ascended to replace Murtha as chairman of the Defense subcommittee — would rise to replace Obey.

But Rep. Chaka Fattah (Pa.), more than halfway down the roster as the 21st-ranking Democrat on the panel, said he will seek the gavel. Acknowledging his lack of seniority, Fattah argued that his candidacy would not break some great precedent, noting that Obey himself beat out a more senior Member, as did Henry Waxman (D-Calif.) when he wrested the Energy and Commerce gavel from Rep. John Dingell (D-Mich.). “Obey was selected in the same manner that I offer my own candidacy,” he said. “I think there will be a lively debate, and we’re probably making a decision for the next decade.”

Fourth-ranking Rep. Marcy Kaptur (D-Ohio), who said the panel “respects seniority,” nevertheless would not rule out a bid for the gavel. Kaptur ran for a leadership post in 2008 on the platform that coastal states were overrepresented in Democrats’ top ranks — and she stressed Wednesday that Obey’s retirement amounts to a “huge loss” for the Upper Midwest.

Obey, for his part, noted Dicks was next in line. “I think Norm would do a fine job,” he said. Dicks cautioned that the decision would be up to the Caucus. But he said he expects to succeed Obey while retaining his chairmanship of the Appropriations Subcommittee on Defense. Dicks said that such dual roles have been the precedent on the committee, noting that Obey retained the chairmanship of the Subcommittee on Labor, Health and Human Services and Education while leading the full panel.

The stakes, of course, would be scaled down if Democrats lose control of the chamber, though there could still be competition for the ranking member slot.

In the shorter term, lawmakers were struggling with the question of how a lame-duck chairman would preside over a panel that still has considerable work to do: determining spending levels for a possible budget, assembling a supplemental to fund ongoing operations in Iraq and Afghanistan, forging smaller-bore jobs measures and passing measures to fund the government.

And they were beginning to assess the meaning — for their Caucus, and the institution — of the loss of an old-line liberal lion and powerhouse chairman who is one of the last of his kind. House Democratic leaders — the three most senior of whom served under Obey on the Appropriations Committee — used superlatives to describe him. Speaker Nancy Pelosi (D-Calif.) called him a “legislative genius” and a “transformational figure.”

Elected in 1969 at the height of the Vietnam War, Obey styled himself an unabashed social progressive in the tradition of Wisconsin liberal leader Robert La Follette — following a political philosophy that Kaptur said proceeded from his Roman Catholic faith. “He planted his cross in the public realm,” she said.

After the Democrats lost the House in 1994, Obey spent 12 years as the party’s pit bull defending federal programs in the face of a Republican Party intent on slashing spending.

Since he took back the gavel in 2007, Obey instituted a series of reforms that brought some sunshine to the discredited earmarking process, but he defended the practice — the heart of his committee’s power — against efforts to shut it down.

Lately, Obey has been urging lawmakers to push off cutting the deficit until the economy is on firmer footing, but he has run up against resistance from moderates.

In announcing his retirement, Obey talked proudly of the earmarks and other largess he brought back to his district, passing out a booklet detailing projects for everything from dental clinics to dairy subsidies to cranberry growers.

He denied that the prospect of a difficult campaign scared him off, dismissing talk that he could have lost in November. “There isn’t a chance of a snowball in Hades,” he said. And while he acknowledged popular opposition to the stimulus — “Herbert Hoover seems to have won the argument,” he said — he said his “only apology is that it should have been larger.”

Obey said that he hopes to still pass another jobs package for cash-strapped states. “If we don’t act, we’re going to lose half of the jobs we saved last year,” he said.

But Obey said he’s grown weary of the constant budget battling.

“I’m just tired of fighting that fight,” Obey said. “I want somebody else to step in with fresh legs and a new pair of boxing gloves.”