Phil Gramm became the latest dropout in the race for the Republican Presidential nomination. Margaret Warner reports from New Hampshire where Bob Dole is still the favorite among likely Republican voters.

MARGARET WARNER: The New Hampshire Presidential primary is six days away, but for today at least, much of the media attention shifted to Washington, where Texas Senator Phil Gramm announced his run for the presidency was over. Gramm finished fifth in Monday's Iowa caucuses. One New Hampshire poll that's been tracking 600 voters over the last three nights showed Gramm a distant fifth here as well. This afternoon, Gramm told a room full of disappointed supporters he could not ignore the obvious.

SEN. PHIL GRAMM, Former Presidential Candidate: Over a year ago when I started to campaign for President, I started with a conviction that America needed less government and more freedom. I believed then, as I believe now, that Washington has too much to say about how your income is spent, how your business is run, how your children are educated, and I have been committed as a candidate for President to taking that decision-making power back from Washington and giving it back to your family where it belongs. I believe that America has got to come to grips with the fact that we can't have unlimited government and unlimited opportunity at the same time. We're going to have to choose, and I choose unlimited opportunity. I believe that my greatest failure in this campaign was my inability to make that fundamental choice that our nation must make the focal point of this campaign. I am today ending my campaign for President of the United States. When the voter speaks, I listen, especially when the voter is saying someone else's name. As a member of the Senate, I'm going to continue to fight for less government and more freedom, and I am going to be the strongest supporter of the ultimate nominee of our party in this country. I believe we must beat Bill Clinton. I believe we must balance the federal budget. I believe we must let working people keep more of what they earn. I believe we must bring back the American dream and share it with the people who missed it the first time around. I wanted to carry our banner to victory. I believed then and I believe now that I was the best candidate to do it. I also believed then and I believe now that I am the person who could have changed America. My problem was an inability to convince voters that I was right. It is not my plan now to endorse any other candidate. Obviously, when you get involved in a race like this, you dedicate not just the year you're running but several years in preparation to it. I think it is very important to step away to reflect on the race and its message. I have not decided whether I will endorse anyone, but I certainly have decided that I'm going to stand up on important issues.

MARGARET WARNER: In New Hampshire, this morning, Bob Dole said he had called Gramm to wish him well.

SEN. ROBERT DOLE, Republican Presidential Candidate: We're all adults in this business, and we know each other very well. We've worked together a long time.

MARGARET WARNER: The Iowa first place finisher then went on with his own campaign, built on the theme that this Washington experience is his strongest asset.

SEN. ROBERT DOLE: If a crisis occurs, maybe on the first day of someone's watch as President of the United States in 1997, or maybe in the first week or the first month or the first six months, it's good to have somebody around the White House who's had some experience--(applause)--who's met with foreign leaders.

MARGARET WARNER: And this afternoon, Dole touted two more endorsements from prominent politicians, Republican Governors George Allen of Virginia and William Weld of Massachusetts.

GOV. WILLIAM WELD, (R) Massachusetts: Well, I think Dole is a true blue guy who can win this election. Obviously, other candidates have their, their niches, but I'm for Dole.

GOV. STEVE MERRILL, (R) New Hampshire: Hang on just one second. I understand that Sen. Dole, who is in the air, is on the phone, is that correct?

SEN. ROBERT DOLE: (on phone) That's right, Steve. How are you doing?

GOV. STEVE MERRILL: I'm great, Senator. Hello.

SEN. ROBERT DOLE: (on phone) Could I just say a word too?

GOV. STEVE MERRILL: Absolutely.

SEN. ROBERT DOLE: (on phone) I want to say thank you to both George and Bill. I'll have to see George at the airport and thank him personally. What you're--what you have there, of course, three of our outstanding young, bright young governors who are the way up in the Republican Party, one from the South, one from--two from New England, and I appreciate very much their willingness to come to New Hampshire today to endorse my candidacy for the nomination for President.

MARGARET WARNER: Dole is fighting to hold onto his apparent lead in New Hampshire, and the latest New Hampshire polls show Dole's still the favorite among likely Republican voters. But the poll also shows that Pat Buchanan, after his strong second-place finish in Iowa, is now running a strong second in New Hampshire as well.

PATRICK BUCHANAN, Republican Presidential Candidate: I would say to Sen. Gramm's supporters we had a great battle, a full year, we fought to become the conservative challenger to Bob Dole, I have won that battle. I have won it fair and square, with tough campaigning. Our campaign is wide open to you. Moreover, we can't win without you. If the conservatives do not unite, we're going to get another establishment Republican.

MARGARET WARNER: Millionaire publisher Steve Forbes returned to New Hampshire today. Campaign officials said they have pulled all of Forbes' negative ads in New Hampshire, the same kind of attack ads that many analysts say contributed to Forbes' disappointing fourth-place Iowa finish. Forbes was at a Rotary Club lunch in Milford, New Hampshire today.

STEVE FORBES, Republican Presidential Candidate: I do understand how government works and more importantly, where it fails. I do understand that. And many of my opponents do not.

MARGARET WARNER: But the latest polls suggest that Forbes, who once was challenging Dole for first place here, is now in a struggle to hold onto third place against a strong challenge from former Tennessee Governor Lamar Alexander. Alexander's support in New Hampshire, while still in the teens, has grown steadily since his third-place finish in Iowa.

MAN ON STREET: I'd like you to balance the budget, sir. I hope if you get in there that you balance the budget--the lack of cooperation form our Democratic partners.

LAMAR ALEXANDER, Republican Presidential Candidate: Here is the argument from me. I'm the only one running for President now who has ever balanced the budget. I would balance the budget and with respect to Sen. Dole, he's been there for thirty-five years and he's got a $5 trillion deficit.

MARGARET WARNER: Alexander also campaigned in Milford, New Hampshire, this morning with former Education Secretary William Bennett. Bennett endorsed Alexander and will become chairman of his national campaign.