A member of Congress has cleared the way for New York Attorney General Eliot Spitzer to run for governor.[@@]

Sen. Charles Schumer, D-N.Y., a potential rival, announced today that he will stay in the U.S. Senate rather than trying to run for governor.

Incoming Senate Minority Leader Harry Reid, D-Nev., persuaded Schumer to stay in Congress by making him head of the Democratic Senatorial Campaign Committee through the 2006 midterm elections. Reid also gave Schumer a seat on the powerful Senate Finance Committee, apparently in exchange for Schumer’s commitment to stay in Washington.

Schumer, who raised more than any other senator for his re-election campaign this year, agreed to the deal after Reid said he would allow Schumer to retain his seats and seniority on the equally important Banking and Judiciary committees.

Schumer’s move gives Spitzer a greenlight to run for governor in 2006 against the Republican incumbent, George Pataki.

Joel Wood, a senior vice president at the Council of Insurance Agents and Brokers, Washington, says Schumer’s decision will benefit the insurance industry and the state of New York. Schumer’s “clout will only be increased,” Wood says. “He has been a good friend of the New York insurance industry.”

But the decision also may encourage Spitzer to sustain his assault against the insurance industry. He has been investigating allegations of bid-rigging and conflicts of interest in the placing of all types of insurance, including property-casualty, life, health and group insurance, and his staff still is combing the records of annuity underwriters to determine whether consumers are being short-changed by practices in that industry.

Schumer attracted a record-setting 71% of the vote in winning re-election to his second term several weeks ago.