US President Barack Obama announced that his chief of staff Bill Daley, brought into the White House to repair tarnished ties with big business, was stepping down in an early election-year staff shake-up.
"Obviously, it wasn''t easy news to hear," Obama said, as he announced Daley wanted to leave for their mutual hometown of Chicago, and unveiled that Budget Director Jacob Lew would take over the powerful position.

Daley had been expected to stay on in the White House until after November''s election, in which Obama is seeking a second term in a challenging economic environment.

The former Bill Clinton-era commerce secretary was appointed just a year ago as the administration sought to bounce back from a Republican triumph in mid-term congressional polls in 2010 and to show a friendlier face to business.

His contacts in the financial sector and propensity for the political center however caused distrust among some liberal members of Obama''s base.

Daley shouldered much of the blame when the White House failed to clinch a deal on cutting the deficit and taxes with Republicans last year, and the Obama administration has since returned to a more confrontational posture.

He steps down as Obama gears up for another showdown with Republicans over extending a payroll tax cut and amid a constitutional showdown after he bypassed Congress to appoint several key officials to his administration.

Obama said Daley told him last week that he wanted to return to Chicago to spend more time with his family, especially his grandchildren. "No one in my administration has had to make more important decisions more quickly than Bill and that''s why I think this decision was difficult for me," he said, adding he did ask Daley to reconsider.

Obama said Daley, expected to leave by the end of the month, played important roles in the decision-making which led to the operation to kill Osama bin Laden in Pakistan last year, among other crucial issues.

Obama made his announcement less than two hours after his press spokesman Jay Carney insisted that the working environment was "harmonious" at the White House, and portrayed and painted a new book detailing tension between First Lady Michelle Obama and key presidential staff members as "over-hyped." Obama''s top political advisor David Plouffe, who masterminded his 2008 election win, is now seen as the dominant staff figure in the West Wing, and another center of power resides at the president''s reelection HQ in Chicago.

Lew is on his second tour as director of the Office of Management and Budget, having won his spurs in the Clinton administration on balancing the budget. He also served Obama as a deputy secretary of state charged with budget and financial issues. The post of chief of staff is vital in any White House, as its occupant controls access to the president, coordinates the implementation of policy and handles breaking crises. The chief of staff also often serves as an enforcer for the president, deploying executive power and managing relations with a sometimes hostile Congress. 
 

Source: BNA