Obama Announces Daschle as HHS Pick

Dec. 11, 2008— -- President-elect Barack Obama formally announced today his selection of former Sen. Tom Daschle to lead the Department of Health and Human Services.

The former Senate majority leader will also lead a new White House office of health reform, Obama said today. He also announced that Jeanne Lambrew, a HHS official under President Bill Clinton who helped co-write a health care book with Daschle, has been tapped to be deputy director of that office.

Although the Daschle pick has been known for weeks, Obama called him "one of America's foremost health care experts" and "the original no-drama guy" while discussing the future of the health care system today in Chicago.

"Tom brings more than just great expertise to this task, he brings the respect he earned during his years of leadership in Congress," Obama said. "He knows how to reach across the aisle and bridge partisan divides. And he has the trust of folks from every angle of this issue: doctors, nurses and patients; unions and businesses; hospitals and advocacy groups -- all of whom will have a seat at the table as we craft our plan."

Since leaving the Senate in 2004, Daschle, a South Dakota Democrat, has been working as a special policy advisor for the law and lobbying firm Alston and Bird. 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, the Centers for Disease Control and Prevention, the Centers for Medicare and Medicaid Services and the National Institutes of Health.

"It is hard to overstate the urgency of their work," the president-elect said. "Over the past eight years, premiums have nearly doubled -- and more families are facing more medical debt than ever before. Forty-five million of our fellow citizens have no health insurance at all and, day after day, we witness the disgrace of parents unable to take a sick child to the doctor, seniors unable to afford their medicines, people who wind up in the emergency room because they have nowhere else to turn."

In an effort to get input from Americans across the nation, the incoming administration has announced it plans to hold a series of health care discussions in homes and community centers starting next week. Daschle, who has already been leading the transition's health policy team, is planning to attend one of those discussions in person. The forums are one way to avoid the appearance of repeating Clinton's unsuccessful strategy of trying to redesign the health care system in secret.

Daschle's book, "Critical: What We Can Do About the Health Care Crisis," was published in February.

Health advocacy groups have been quick to applaud Daschle since learning of Obama's selection.

"Sen. Daschle's knowledge of both health care and Capitol Hill will be vital to prospects of enacting comprehensive health care reform," said Hala Moddelmog, president of Susan G. Komen for the Cure Advocacy Alliance. "This is a critical time in our country and in the war on cancer. It is important that we work together towards our common promise to save lives."

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

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 Bill 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 the plan.

At a bipartisan healthcare 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 existing insurance if they prefer. 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, the 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 kind of massive lobbying battle that hamstrung then-first lady Hillary Rodham Clinton in her failed attempt to put together a plan.

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 among 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 George W. 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 an 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 PObama 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. Lambrew, the expected deputy director, 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 Bush administration under HHS secretary Leavitt has made a significant push toward 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 the next administration is expected to 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 three political positions: commissioner, head of legal affairs and senior advisor in the 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 Centers for Medicare and Medicaid Services, NIH, FDA, Administration on Aging, Administration for Children and Families, Indian Health Service and the surgeon general.

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