Carl Paladino, a co-chair of President-elect Donald Trump's New York campaign, is facing a backlash over crude remarks about Barack and Michelle Obama.
Asked by a newspaper what he would most like to happen in 2017, Mr Paladino said he hoped President Obama would die from mad cow disease and the first lady would "return to being a male".
He later said his remarks were meant to be humorous.
But New York Governor Andrew Cuomo said the comments were "racist" and "ugly".
Many Twitter users also condemned Mr Paladino, with one saying there was "something deeply, horribly wrong" with him.
Meanwhile, the Parent Teacher Organisation in the city of Buffalo called on Mr Paladino to resign from its school board.
The White House has made no public comment.
Mr Paladino, the unsuccessful Republican candidate for the post of New York governor in 2010, was asked by Buffalo's Artvoice newspaper for his hopes for the next year.
This is Artvoice's traditional end-of-the-year feature, where prominent local figures give their predictions.
Referring to Mr Obama, Mr Paladino said he hoped the president "catches mad cow disease after being caught having relations" with a cow and would die and be buried "in a cow pasture".
On Mrs Obama, Mr Paladino said: "I'd like her to return to being a male and let loose in the outback of Zimbabwe where she lives comfortably in a cave with Maxie, the gorilla."
The 70-year-old businessman later said his remarks were "about a little deprecating humour which America lost for a long time".
And he added: "Merry Christmas and tough luck if you don't like my answer."