By Steve Holland
WASHINGTON (Reuters) - President Barack Obama on Thursday chose J.P. Morgan Chase executive William Daley to be his new White House chief of staff, retooling his team with an experienced businessman at the helm.
The selection of the veteran of the Clinton administration is to be announced by Obama at a 2:30 p.m. EST (7:30 p.m. British time) White House ceremony, White House spokesman Robert Gibbs said.
By picking Daley, Obama is bringing in someone who was not part of his original inner circle and someone who has deep business experience at a time when fixing the U.S. economy is his greatest challenge ahead of his 2012 re-election bid.
William Galston, an economist who was a domestic policy adviser to President Bill Clinton, said Daley should help Obama repair frayed relations with the U.S. business community, which has complained that Obama's policies will hurt job creation.
"He has excellent connections with the business community and I think will be a very credible and reassuring bridge to them as the Obama administration tries to reset relations with them," Galston said.
The choice does draw on Obama's Chicago background, however. Daley is the brother of Chicago Mayor Richard Daley.
U.S. businesses, which have had a rocky relationship with the White House under Obama's tenure, applauded the move.
"This is a strong appointment. Bill Daley is a man of stature and extraordinary experience in government, business, trade negotiations, and global affairs," said Thomas Donohue, president of the Chamber of Commerce, a lobby group that says it represents more than 3 million businesses.
Daley's choice, along with the expected selection of Treasury Department official Gene Sperling as a senior economic adviser, would mean a return to the White House of experienced hands from their days working for Democratic President Bill Clinton, who presided over a growing economy in the 1990s.
WHITE HOUSE STAFF SHAKEUP
Current chief of staff Pete Rouse, a long-time Obama adviser who relishes a behind-the-scenes role, is being moved to the senior advisory position of counselor to the president.
Obama is conducting a shake-up of his White House staff to prepare for the next two years of divided government -- with Republicans now in control of the U.S. House of Representatives -- and to lay the groundwork for his re-election campaign.
Daley, who was Clinton's commerce secretary, met Obama and other officials at the White House on Wednesday to discuss the job.
Rouse became interim chief of staff when Rahm Emanuel resigned last year to run for Chicago mayor. The chief of staff is a critical position, leading White House efforts to carry out the president's agenda.
Obama is expected to announce on Friday the members of his new economic team, including the expected naming of Sperling as chief of the National Economic Council.
Obama also is contemplating a successor to Gibbs, who announced on Wednesday he will leave the White House early next month to become a paid consultant and help what could be a difficult re-election campaign for Obama, who is battling to bring down a persistent high 9.8 percent jobless rate.
(additional reporting by Jeff Mason)
