Why Obama Chose Businessman William Daley as His Chief of Staff

President Obama picked former Commerce Secretary William Daley to be his new chief of staff on Thursday, bringing on board a businessman with vast political experience at a time Obama is preparing to launch his re-election bid and improve relations with the corporate community.

Though the president and Daley have known each for years from Chicago politics, Obama's quick rise from the Illinois State Senate to the White House had little to do with Daley or his brother, Chicago Mayor Richard Daley. Daley has never been part of Obama's inner personal circle -- considered a plus because he can bring an outsider's perspective to the White House.

What Obama and Daley -- and former Chief of Staff Rahm Emanuel -- have in common are close ties to Obama Senior Adviser David Axelrod, who is expected to depart at the end of the month to return to Chicago and take on duties as the main strategist for the 2012 Obama campaign.

Daley is stylistically different from Emanuel, far more measured than the harder-edged Emanuel, whose early political job was as a fundraiser for Richard Daley's 1989 mayoral campaign. The vacancy Daley is filling was created when Emanuel quit in October to run for Chicago mayor, getting in the race once Mayor Daley decided not to seek another term.

In selecting William Daley, White House officials told Politics Daily, Obama gets a very specific skill set needed as he prepares to launch his re-election bid and deal with a potentially hostile GOP-controlled House and a Senate where Democratic strength has diminished.

Daley, who is expected to join the administration in a few weeks, brings in deep links to the global business world, Cabinet experience, national political knowledge and a comfort factor stemming not only from connections to Axelrod but also to David Plouffe, Obama's 2008 campaign manager who is joining the White House on Monday.

Since May 2004, Daley has been working from Chicago as the Midwest chairman banking giant JP Morgan Chase & Co. and head of its corporate responsibility operation. Daley's last major political assignment was in 2000, when he was brought in to rescue Vice President Al Gore's presidential campaign, setting up camp in Tallahassee, Fla., during the brutal recount battle against George Bush that was eventually decided by the U.S Supreme Court.

He also was an early backer of Vice President Joe Biden's 1988 presidential bid and a veteran of Walter Mondale's presidential contest.

But Daley is as familiar with Chicago's precinct politics as he is with presidential elections. Though Daley, 62, the mayor's youngest brother, in the last 10 years flirted with runs for Illinois governor and senator, he never jumped in himself.

Obama noted how Daley straddled the government and political worlds when he announced his chief of staff pick Thursday afternoon in the White House East Room, flanked by Daley and interim chief of staff Pete Rouse.

Rouse got high grades for his work, but did not want to stay on as chief. Instead, the super low-profile Rouse, who served Obama as his chief of staff when he was an Illinois senator -- and was an architect of his presidential campaign -- will remain as a counselor to the president.

In speaking about Daley, Obama said, "He's led major corporations. He possesses a deep understanding of how jobs are created . . . And, needless to say, Bill also has a smidgen of awareness of how our system of government and politics works. You might say it is a genetic trait," Obama said, a reference to Daley's brother and father, both Chicago mayors.

Obama cited Daley's "tremendous experience, his strong values and forward-looking vision," adding, "I'm convinced that he'll help us in our mission of growing our economy and moving America forward. And I very much look forward to working with Bill in the years to come."

Daley said it was an "extreme honor" to take on the assignment. Alluding to President John F. Kennedy, always a Daley family favorite, he recalled a visit to the White House decades ago with his family.

"Fifty years ago this month, I visited the White House with my parents and my brothers and sisters to visit a young president who went on to show great strength, leadership and vision in the face of enormous challenges in those times. You, Mr. President, are proving your strength, your leadership, your vision during a most difficult time for our nation and for the world. You have also shown through your example that public service is an honorable calling, and I am pleased to answer your call," Daley said.

Daley's appointment drew mixed reviews: Democratic progressives were disappointed and the business community was very upbeat. Daley frayed relations with unions in 1993, when he was President Clinton's "NAFTA czar," successfully winning congressional approval for the North American Free Trade Agreement.

Clinton later tapped Daley as Commerce secretary in 1997 at the start of his second term and earlier had named him to a seat on the board of Fannie Mae, the quasi-governmental mortgage maker, in part to make up for not making him Transportation secretary in his first term.

AFL-CIO President Richard Trumka was wary of Daley. "The president is of course entitled to choose a chief of staff in whom he has complete confidence," Trumka said in a statement. "Yet President Obama and his Administration will ultimately be judged by results -- whether the economy recovers robustly and begins to generate good jobs on the scale needed to improve the lives of working people."

Justin Ruben, executive director of the liberal MoveOn.org, was equally skeptical. "With Wall Street reporting record profits while middle-class Americans continue to struggle in a deep recession, the announcement that William Daley, who has close ties to the Big Banks and Big Business, will now lead the White House staff is troubling and sends the wrong message to the American people," Ruben said in a statement.

Daley's selection drew applause from Chamber of Commerce President and CEO Thomas J. Donohue. "This is a strong appointment," he said in a statement. "Bill Daley is a man of stature and extraordinary experience in government, business, trade negotiations, and global affairs. He's an accomplished manager and strong leader. We look forward to working with him to accelerate our recovery, grow the economy, create jobs, and tackle America's global challenges."

Senate Minority Leader Mitch McConnell (R-Ky.) was also enthusiastic about the Daley pick. He told reporters on Thursday, "I, frankly, think it's kind of a hopeful sign. He has a business background. You know, we used to -- I used to say the last two years -- I don't know whether it's technically true or not -- but that there was nobody down at the White House who had ever even run a lemonade stand. You know, they were all college professors . . . former elected officials. This is a guy who's actually been out in the private sector, been a part of business. Frankly, my first reaction is: That sounds like a good idea."

Like Emanuel, Daley is a Democratic centrist. In a December Washington Post column taking stock of the big Democratic loss in the November elections, Daley gave liberals some tough love:

"All that is required for the Democratic Party to recover its political footing is to acknowledge that the agenda of the party's most liberal supporters has not won the support of a majority of Americans -- and, based on that recognition, to steer a more moderate course on the key issues of the day, from health care to the economy to the environment to Afghanistan.

"For liberals to accept that inescapable reality is not to concede permanent defeat. Rather, let them take it as a sign that they must continue the hard work of slowly and steadily persuading their fellow citizens to embrace their perspective. In the meantime, liberals -- and, indeed, all of us -- should have the humility to recognize that there is no monopoly on good ideas, as well as the long-term perspective to know that intra-party warfare will only relegate the Democrats to minority status, which would be disastrous for the very constituents they seek to represent," Daley wrote.

Last year, Daley joined the board of a moderate group called the Third Way, whose president, Jonathan Cowan, said in a statement, "His selection sends a clear signal that he intends to govern and campaign from the center over the next two years.

"In selecting Daley, President Obama has hit the trifecta – a top-notch manager, a pro-growth business leader and a moderate Democrat who knows how to work across the aisle."

"Bill Daley is an experienced manager who has run agencies and presidential campaigns," said Cowan. "He has the business credentials to help the White House continue to heal the breach between the administration and the private sector; and he is committed to a big-tent politics for the Democratic Party."