Daley is Obama chief of staff

WASHINGTON (AP) - Overhauling his team at the top, President Barack Obama on Thursday named banker and seasoned political fighter William Daley as his new chief of staff, hoping to rejuvenate both a White House storming into re-election mode and an economy still gasping for help.

The choice of Daley immediately brought howls of protest from the left flank of the Democratic Party, where advocates questioned his insider ties to Wall Street. Centrists, business leaders and Republican lawmakers rallied around the move, one that underscored just how much and how fast the face of the White House is changing.

Obama, whose hopes for a second term will be shaped largely by how the economy does, immediately linked Daley's appointment to that task. For the most influential staff job in American politics, Obama chose a fellow Chicagoan and former Cabinet secretary who has run both companies and campaigns.

"I'm convinced that he'll help us in our mission of growing our economy," an upbeat Obama said in a White House ceremony as Daley stood to one side. On the other side of the president was Pete Rouse, the interim chief of staff who oversaw a busy three months but did not want to stay in the job.

Said Daley to his new boss: "This team will not let you down, nor the nation."

Rouse, who disdains the spotlight but is considered one of Obama's most essential advisers, choked back some rare public emotion as his colleagues gave him a rousing ovation and the president praised him. He will remain on board for the rest of Obama's current term as counselor to the president, the only one in the building to hold that elevated title.

As the new Republican majority in the House exerts its power, Obama has been resetting his team briskly, with one eye on governing and the other on getting re-elected. After two long years on the job, on top of two nonstop years of campaigning, some of Obama's most senior advisers are heading out.

The president is losing his press secretary, Robert Gibbs, and his trusted strategist, David Axelrod; he is bringing in former campaign chief David Plouffe as a top staff adviser starting Monday. Yet change only goes so far, as all three of them will end up playing vital roles in Obama's 2012 election campaign, just as they did last time.

On Friday, Obama is expected to name Gene Sperling as his chief economic adviser, who once served for President Bill Clinton - just like Daley.

The chief of staff is the one charged with shaping Obama's time while managing a mammoth juggle of issues, crises, opinions and egos. Few jobs are as consuming.

Daley is known to be deft at deal making and organizing. He offers Obama credibility with the business community, familiarity with the ways of the Cabinet and experience in navigating divided government.

On Capitol Hill, the top Republican in the Senate, Mitch McConnell, offered the Democratic president some backhanded praise. He called Daley's business experience a hopeful sign in a White House where, as McConnell put it, no one has ''ever even run a lemonade stand."

Daley has never run for office but is the son of a legendary Chicago mayor and the brother of the current one, and he managed Al Gore's campaign for the presidency, right through the bitter and historic recount vote of 2000. He helped Clinton seal the North American Free Trade Agreement and later served as his commerce secretary.

Among his challenges: He has supported Obama but not been personally close to him, and now he must run an operation of the president's loyal staffers. Ron Klain, who has known and worked with Daley over the last two decades, said Daley has the temperament and finesse to deliver on the challenge.

"This is a guy who does not tolerate bickering," said Klain, who himself is exiting the White House after serving as Vice President Joe Biden's chief of staff. "He certainly knows how to run a tight ship. But he does it with a charm that has people wanting to perform for him. He's not someone who manages by intimidation."

The job had been held by one of the White House's largest personalities, Rahm Emanuel, who whizzed through each day and got involved in most every affair. He left to run for Chicago mayor, and when the quiet Rouse came in to replace him as an interim in October, that choice did not generate much debate.

Not so with Daley.

Liberal groups pounced, fearing White House accommodation to ascendant Republicans and a softening toward Wall Street regulation.

"Why in the world is President Barack Obama selecting as his chief of staff a person who comes from the very Wall Street that wrecked the economy?" said Robert Weissmann, president of Public Citizen, a liberal advocacy group. Said Roger Hickey, co-director of the liberal Campaign for America's Future: "I'd be happier if one of these major appointments was closer to Main Street than to Wall Street."

Daley is a proud to tout his centrist credentials. And he is joining a White House team just as Obama is coming off a successful stretch of achievements that required compromises and bipartisan outreach. He has talked about the need for a moderate course of governing and is on the board of Third Way, a moderate Democratic think tank.

"His selection sends a clear signal that (Obama) intends to govern and campaign from the center," said Third Way's president, Jonathan Cowan, about Daley.

Daley, 62, is a lawyer who has been a president of a bank and communications company. He has been serving as Midwest chairman for JPMorgan Chase. Daley will serve as an unquestioned bridge to a community of business executives, who have openly sparred with Obama over the last two years.

The U.S. Chamber of Commerce hailed the choice; Daley's appointment met a cool reception from labor unions. The youngest of seven children, Daley learned politics early at the kitchen table, in conversations led by his father, Richard J. Daley, who served as mayor of Chicago from 1955 until his death in 1976. William Daley picked up lessons about the importance of compromise, said one of his brothers, John Daley, a Cook County commissioner in Illinois.

"They both knew that, both my mom and my dad, that people should listen to other people's points of view, and that no one is right all the time," John Daley said.

William Daley emerged as a natural candidate for the chief of staff post, particularly after other internal candidates ended up in other positions. He is close to some of those in Obama's orbit, including Axelrod, Emanuel and senior presidential adviser Valerie Jarrett.

Daley is expected to start as chief of staff before Obama's State of the Union speech, which is expected on Jan. 25.

The general understanding around the White House is that the chief of staff must put in extraordinary hours to be successful. That's what Daley inherits.

"It is a critical time, in terms of the president's agenda, and in terms of getting the president re-elected," Klain said. "It's hard for anyone who cares about this nation to turn down an opportunity to be a part of that. It is definitely not a quality of life choice, that's for sure."

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Associated Press writers Deanna Bellandi and Carla K. Jackson in Chicago, Christopher Wills in Springfield, Ill., and Julie Pace, Erica Werner, Jim Kuhnhenn and Darlene Superville in Washington contributed to this report.