Obama Taps Veteran Policymaker as Top Economic Adviser

WASHINGTON, Jan. 7, 2010— -- President Obama continued the makeover of his senior staff today with the appointment of top economic advisers who will oversee the administration's approach to job growth and recovery from the recession.

Obama named Treasury Department official Gene Sperling, a veteran economist and policymaker, to head the National Economic Council, a post he previously held in the Clinton administration.

Speaking at a window factory in Maryland, Obama hailed Sperling as an "extraordinary asset" with a proven track record of brokering bipartisan compromises on economic legislation.

"He's a public servant who has devoted his life to making this economy work and making it work specifically for middle class families," Obama said. "In his tenure in the Clinton administration during the late 90s, he helped formulate the policies that contributed to turning deficits to surpluses and a time of prosperity and progress for American families in a sustained way."

Sperling, 52, assumes the reins as the latest jobs report puts the nation's unemployment rate at 9.4 percent and notes one in five Americans are underemployed. He now faces the challenge of helping the administration make sufficient progress on job creation to convince voters that Obama's policies are working.

The latest round of appointments comes as part of a broader retooling inside the White House, which faces new political realities in Washington and a looming re-election campaign in 2012.

Obama appointed former commerce secretary Bill Daley as White House chief of staff Thursday, a move widely viewed as a centrist pick who will work well with Republicans.

The President will now focus on finding a replacement for outgoing press secretary Robert Gibbs, who is the most public face of the administration. Whoever Obama picks will help set the tone for negotiations with lawmakers on Capitol Hill and chart a course for advancing the administration's agenda.

Here's a closer look at who's out and who's in with the latest White House senior staff shake-up:

Out: National Economic Council Director Larry Summers

Summers, Obama's top economic adviser, announced his departure from the White House in September, following the exit of two other economic advisers, the chair of the Council of Economic Advisers, Dr. Christina Romer and Office of Management and Budget director, Peter Orszag.

Summers will return to Harvard University as a professor. "I'm looking forward to returning to Harvard to teach and write about the economic fundamentals of job creation and stable finance as well as the integration of rising and developing countries into the global system," Summers said in a statement.

Replacement:

Gene Sperling, Senior Counselor to Treasury Secretary

Sperling, a deficit hawk with close ties to the business and financial community, will replace Summers as the head of the National Economic Council and step into the spotlight and become the center of debate over how best to boost economic growth. Sperling was previously director of the council between 1996 and 2000, during Bill Clinton's second term.

Out: Chief of Staff Rahm Emanuel

Emanuel, a former congressman from Illinois, had been unabashed about his desire to run for mayor of Chicago. So when longtime Mayor Richard Daley announced in September that he would not seek another term, the door opened for Emanuel's return to his hometown.

A recent Chicago Tribune poll shows Emanuel the early front-runner in the race.

"I think he would be an excellent mayor," Obama said of his former chief of staff in an interview late last year.

Replacement:

William Daley, Former Commerce Secretary

Daley, the former Clinton commerce secretary and JP Morgan Chase executive, assumes the reins from interim chief of staff Pete Rouse, who will be promoted to counselor to the president.

"He possesses a deep understanding of how jobs are created and how to grow our economy," Obama said of Daley. "And needless to say, Bill also adds a smidgen of awareness of how our system of government and politics works. You might say it is a genetic trait."

Daley, who has strong ties within the business community, was considered a top choice for working with Republicans and signals the president's willingness to move to the political center.

The U.S. Chamber of Commerce praised Obama's selection of Daley, calling it a "strong appointment."

But some liberal groups suggested bringing in Daley was akin to letting a wolf into the hen house.

Justin Ruben, executive director of MoveOn.org, said the move "sends the wrong message to the American people. ... It's up to Daley to prove that he's not carrying water in the White House for the big banks that took our economy over the cliff."

The seventh and youngest child of the late Chicago Mayor Richard J. Daley, he may be best known for not conceding on election night when he was the campaign chairman for Al Gore's 2000 presidential campaign.

Out: Press Secretary Robert Gibbs

Gibbs announced Wednesday that he will be leaving the White House in February.

"It is an honor and a privilege to stand here, to work inside this building, to serve your country, to work for a president that I admire as much as President Barack Obama," Gibbs told reporters at his regular briefing. "What I'm going to do next is step back a little bit, recharge some."

"This is a tough place to work. ... I think having new voices and having fresh voices, some of those voices that are coming back from having taken a couple of years off, are an important part of this process," Gibbs said.

Gibbs said he would continue to support the administration from the private sector, offering advice as a paid consultant to the Obama re-election campaign.

White House officials say the search for Gibbs' replacement is just beginning and will be among the first decisions that will involve incoming chief of staff Bill.

Possible Replacements:

Bill Burton, Deputy Press Secretary

Burton is seen as the favorite to become the new public face of the administration, given the training and experience he gained as Obama's national press secretary during the 2008 presidential campaign. The 33-year-old has also held communications posts on Capitol Hill.

The New York native is well regarded by members of the White House press corps for his engaging and affable manner. But he's also demonstrated, both from the podium and the sidelines, that he can be a forceful defender of his boss and the administration.

Josh Earnest, Deputy Press Secretary

Earnest, a Kansas City native, has served in the White House communications shop since the inauguration in 2009. He previously held communications roles during Obama's presidential campaign, heading the Presidential Inaugural Committee and the Iowa communications office.

Jay Carney, Communications Director for Vice President Biden

Carney, a Virginia native, has been a journalist, and before he joined the administration, he had been the Washington bureau chief for Time magazine.

Karen Finney, Former DNC Spokeswoman

Finney most recently served for four years as communications director for the Democratic National Committee. But she also has experience inside the White House, having served as deputy press secretary for then-first lady Hillary Clinton and later as deputy director of presidential scheduling for President Clinton.

Out: David Axelrod, Senior Adviser

Axelrod, one of the president's closest aides, has said he would move back to Chicago in 2011 to help coordinate Obama's re-election campaign. He has made no secret of his desire to be closer to his family in Chicago, where he travels often. It's unclear whether Axelrod will continue in a formal support role for the administration after the 2012 campaign.

In: David Plouffe, Senior Adviser

Plouffe, Obama's campaign manager during the 2008 election, assumed his new job as senior White House adviser Monday.

"Plouffe is one of the smartest guys in the business. He has the full trust of the president and his team, and we appreciate any and all help he can give us," White House communications director Dan Pfeiffer said of Plouffe last year.

ABC News' Jake Tapper and Jon Garcia contributed to this report.