- Associated Press - Friday, January 7, 2011

WASHINGTON (AP) — President Obama will name Gene Sperling as director of the National Economic Council on Friday, a move that will place a veteran policy and political player in the White House to work with a divided Congress.

The role gives Mr. Sperling broad oversight of the administration’s economic policies as the White House contends with near-double digit unemployment and looming legislative battles over the budget and deficit. His appointment comes amid a broader shake-up of Mr. Obama’s senior staff as the White House ramps up the president’s re-election campaign.

The White House early Friday confirmed Mr. Sperling’s appointment, which had been anticipated for days. Mr. Obama was to announce Mr. Sperling’s new post, as well as other changes to the economic team, later in the day during remarks on the economy.

Mr. Obama’s announcement coincides with a rare bright spot on the economic front: the December jobs report out Friday morning showed the nation’s unemployment rate fell to 9.4 percent, the lowest level since May 2009. That was because more people found jobs, but also because some people gave up on their job searches.

Mr. Sperling, 52, currently a senior counselor to Treasury Secretary Timothy Geithner, will assume his new role as the White House seeks to accelerate the recovery and find an antidote to the still sky-high jobless numbers. That will place him at the center of a debate with economic ramifications for the country and political implications for Obama when he seeks re-election in 2012.

Mr. Sperling, who advised President Bill Clinton and 2004 Democratic presidential nominee John Kerry, is perceived as the type of rare policy adviser who also has a deft touch communicating the message in a legislative and political environment.

“That skill becomes even more important when the Congress is controlled by the opposition party,” said Robert Greenstein, executive director of the Center on Budget and Policy Priorities, a liberal-leaning research group.

The White House said Mr. Obama also will nominate Katharine G. Abraham to his Council of Economic Advisers and Heather Higginbottom as deputy director of the Office of Management and Budget. Those two posts require Senate confirmation. Mr. Obama also will elevate economic adviser Jason Furman to assistant to the president for economic policy.

Friday’s announcements come as Mr. Obama shuffles his top leadership following sweeping defeats for the president’s party in the midterm elections:

— Mr. Obama named William Daley, a prominent business executive, as his chief of staff Thursday.

— Press secretary Robert Gibbs is leaving the White House next month to become a paid consultant to Obama’s re-election campaign.

— Senior adviser David Axelrod will head to Chicago next month to lead the re-election campaign, with Mr. Obama’s former campaign manager, David Plouffe, filling his role at the White House.

Mr. Sperling will replace Lawrence Summers, who left the White House at the end of December to return to Harvard University after two years as NEC director.

For Mr. Sperling, the appointment is a return to a familiar role. He served as deputy NEC director under Mr. Clinton and was promoted to director in 1997. He played a key role in the 1993 deficit reduction bill and compromised with a Republican-led Congress on the 1997 balanced budget agreement.

Mr. Sperling’s pragmatism and his work as a corporate philanthropy consultant to Goldman Sachs, where he was paid more than $880,000, has prompted some liberals to voice misgivings about his appointment. He helped the investment bank design an initiative to provide business education to women in developing countries. He also worked with actress Angelina Jolie to develop education programs for children living in conflict-ridden countries.

“It’s hard for me to believe someone gives you $900,000 and you don’t feel positively disposed toward them,” said Dean Baker, co-director of the liberal Center for Economic and Policy Research.

But Mr. Greenstein defended Mr. Sperling as an advocate of policies that help low and moderate income families and especially children.

“That’s not exactly what comes to mind when this label gets thrown around that he has ties to Wall Street,” Mr. Greenstein said.

As a counselor to Mr. Geithner, Mr. Sperling has worked closely with the president and played a key role in budget negotiations and the administration’s small business initiatives. Administration officials say Mr. Sperling made a strong impression on the president last month when he helped secure a compromise with Republican lawmakers on a deal to extend Bush-era tax cuts for all income earners.

The selection process for the council dragged on for months. Mr. Summers announced his resignation in September, and many in the administration knew well before then that he planned to return to Harvard.

Some White House aides originally wanted Mr. Obama to name a business leader to the council job as a way to give the private sector a greater voice in the administration and ease the perception that the president is anti-business. But finding a CEO with economic credentials proved difficult and the White House thinking evolved over time.

Officials became more inclined to find another prominent job for a private sector appointee while leaving the council post to a policy heavyweight who could coordinate the advice Mr. Obama receives from throughout the administration.

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