Daschle Tapped for HHS Secretary

President-elect Barack Obama Wednesday named former Sen. Tom Daschle to lead the nation's Department of Health and Human Services.

Daschle, D-S.D., is one of Obama's first Cabinet picks. If confirmed by the Senate, he will replace HHS Secretary Michael Leavitt in guiding critical, high-profile federal agencies, including the Food and Drug Administration (FDA), the Centers for Disease Control and Prevention (CDC), the Centers for Medicare and Medicaid Services (CMS) and the National Institutes of Health (NIH). The massive job includes oversight of a department budget that exceeded $707 billion for fiscal year 2008.

Daschle was Senate majority leader under President Clinton. Even before Obama was elected, he had reportedly told confidantes he was most interested in a position at HHS because he thought health care would be one of the most important issues facing the new administration.

Tom DaschlePlay

His book, "Critical: What We Can Do About the Health Care Crisis," was published in February this year.

"By almost any measure, the situation is grim," he wrote in his book. "We like to boast that we have the highest standard of living in the world, and yet, at the dawn of the twenty-first century, we are the only industrialized nation that does not guarantee necessary health care to all of its citizens. It is stunning and shameful."

Health care group Families USA Wednesday was quick to react to Obama's selection.

"The appointment of Sen. Daschle as secretary of the Health and Human Services Department is the best news possible for those who want to achieve meaningful health care reform," said Families USA executive director Ron Pollack in a statement.

The RNC, however, took a different stance.

"Barack Obama is filling his administration with long-time Washington insiders," said RNC spokesman Alex Conant. "Since losing his Senate seat, Tom Daschle has worked for a major lobbying firm. For voters hoping to see new faces and fewer lobbyist connections in government, Daschle's nomination will be another disappointment."

Challenges Facing HHS

Daschle will have his work cut out for him, with enormous challenges facing the agencies under HHS' purview. Top priorities awaiting the next secretary of Health and Human Services include:

Access to Health Care
President-elect Obama said one of his top priorities will be giving everyone access to affordable health care. It's expected to be one of the first orders of business and an aggressive goal -- one that eluded President Clinton. Daschle will lead that charge.

Obama advisers already are working with key members of Congress to hash out the plan for universal coverage. In addition to running the agency that will implement whatever plan comes out of Congress, Daschle also has been named to lead Obama's team that will help create that plan.

At a bipartisan health care strategy meeting today on Capitol Hill, Sen. Mike Enzi, R-Wyo., ranking member of the Senate's Health, Education Labor and Pensions Committee, said he thought a health care bill would be one of the first bills considered after Congress reconvenes in January.

On the campaign trail, Obama promised to let people keep their current insurance if they like it. But they also would have the option of buying coverage from the sort of cooperative that's available to federal employees. People who can't afford to buy coverage would get help from the federal government. His plan also would force insurance companies to cover pre-existing conditions while also trying to block the skyrocketing costs of medical care. Whatever the final contours, this plan will have a huge impact on powerful forces: patients, doctors, hospitals, insurers and drug companies.

Daschle will be at ground zero of the same sort of massive lobbying battle that hamstrung then-first lady Hillary Rodham Clinton.

Medicare Part D
Passed under the Bush administration, Medicare Part D was the largest expansion to the Medicare program since its inception. Under Part D, the government pays for some of the cost of prescription drugs for seniors and others on Medicare. The president -elect supports the program but with some major changes -- chief amoung them, allowing the federal government to negotiate for lower drug prices for the Medicare program.

The new administration also wants to try to close the so-called "doughnut hole." Seniors who have already had a certain amount of their drug costs covered by the government fall into that "hole," where the government will no long reimburse for prescription drugs until seniors have paid out a certain amount of their own money. Then the government again picks up coverage.

Food and Drug Safety
At the FDA, concerns about food and drug safety reached new levels on the Bush administration's watch. Concerns about the safety of diabetes drug Avandia and recalls of the painkiller Vioxx have some wondering whether the FDA is effectively regulating drugmakers. Consumers have also worried about whether the FDA has been doing enough to inspect foreign food and drug plants, as the FDA has recently been tasked with identifying the source of salmonella outbreaks, blocking the import of Chinese milk products, and zeroing in on where along its international supply chain the blood thinner heparin became tainted.

Questions of Bioethics
Whether considering stem cell research, access to birth control, abortion, abstinence education or terminally ill patients, the next HHS secretary will be front and center as the Obama administration navigates complex questions of bioethics. President Bush signed an executive order that banned federal funding for stem cell research -- housed at NIH -- except for lines already in use. The new administration could reverse that decision with a new executive order permitting federal funding for embryonic stem cell research, a stance opposed by the U.S. Conference of Catholic Bishops.

Increasing SCHIP and Medicaid Payments
One of the first orders of business for HHS is likely to be expanding the State Children's Health Insurance Program (SCHIP), which provides health coverage to children of low-income families. Bush has vetoed efforts in Congress to expand SCHIP in the past. House Speaker Nancy Pelosi has said quickly sending a new SCHIP expansion to President Obama will be near the top of the to-do list for the next Congress.

The incoming HHS secretary is likely to take some steps, too. Jeanne Lambrew, a former Clinton HHS official who helped co-write Daschle's health care book, said SCHIP expansion should be first on Daschle's list.

In an essay she wrote for the Center for American Progress, a think tank that appears to provide the intellectual blueprint for much of Obama's agenda, Lambrew said, "An immediate step for the new president is to lift constraints on the expansion of state health insurance programs imposed by a set of administrative policies established by President Bush. Despite a growing uninsured population, the Bush administration implemented a number of executive-branch policies that limit states' ability to expand Medicaid and the State Children's Health Insurance Program. ... The new HHS secretary should immediately roll back or amend these policies."

Electronic Health Records
In an effort to curb medical errors and save time and money, Obama has also advocated requiring a standard for electronic health records. The current administration under Leavitt has made a significant push towards transitioning from paper to electronic records, navigating concerns about patient privacy along the way. It has advocated for a standardized system, free-of-charge, and it's expected the next administration will continue that effort.

Number of HHS Positions for Political Appointees
Of the 64,750 employees with the Department of Health and Human Services, 140 are political appointees. At the FDA, there are just three political positions: commissioner, head of legal affairs, and senior advisor in chief of staff's office.

About a dozen of HHS' political positions require Senate confirmation, including Daschle's. Those requiring Senate confirmation also include the heads of the NIH, CMS, FDA, Administration on Aging and on Children and Families, and Indian Health Service, and the surgeon general.

ABC News' Z. Byron Wolf and Jake Tapper contributed to this report.