King said he's already overstayed the rule's six-year limit -- he's been the committee's top Republican for more than seven years, after first taking the gavel in September 2005.
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Come January, King will lose the "bully pulpit" he used to help keep 9/11 plotter Khalid Sheik Muhammad's trial out of Manhattan, keep Guantanamo Bay's prison open, and draw worldwide attention and controversy with hearings on American Muslims and terrorism.
"It was the greatest experience I've ever had," King said. "I'm very satisfied. As far as I'm concerned, I achieved everything I set out to do."
As King steps down, the New York congressional delegation not only loses its only committee chairman in the House, but a member among GOP leadership who fought to keep federal homeland security money flowing to New York at a time of federal budget cuts.
But the committee also loses a chairman who became a lightning rod for criticism, particularly from liberal and Muslim groups, for his hearings on American Muslims and terror.
Farhana Khera, executive director of the lawyer's group Muslim Advocates, said she "breathed a sigh of relief" at the news. She said King's hearings were a "witch hunt" that sowed "fear and hatred towards American Muslims."
But Frank Cilluffo, director of the Homeland Security Policy Institute at George Washington University, said, "King poured his heart and soul into his job as chairman."
He added, "He will be missed as chairman, but I expect will continue to be an important voice on security issues."
King said he will remain on the committee as chairman of the terrorism subcommittee. He said he also will again be appointed as a member of the House Intelligence Committee.
"I'm not going anywhere," King said. "I'm just moving over a seat." He said he didn't want to leave the post, but he won't stage a fight to keep it.
But, he said, Boehner told him the only waiver to the term limit would be granted to Rep. Paul Ryan (R-Wis.), Mitt Romney's vice-presidential running mate, so he can return as the House Budget Committee chairman.
King served as chairman from September 2005 until December 2006, when Democrats won control of the House. He was ranking Republican from 2007 until 2010. After the GOP won back the House, King became chairman again in 2011.
"I established the committee. I made it a force. I got attention for the committee," King said. "I also set the tone. I made Islamic terrorism the focus of the committee."