Obama Chief of Staff Bill Daley to Step Down, Serve on Obama's Campaign

As the White House prepares for a tough reelection race amid difficulty working with Congress to correct a slow economy, Bill Daley, President Obama's chief of staff, is resigning his post to return to Chicago and serve as co-chairman of Obama's 2012 campaign team.

White House budget chief Jack Lew will take Daley's place, Obama said in a State Dining Room announcement Monday that did not acknowledge Daley's new role.

Calling Daley's decision to depart "difficult for me," Obama said Daley wanted to return home to Chicago to spend time with family, and now was the right time.

"One of the things that made it easier was the extraordinary work that he has done for me during what has been an extraordinary year. Bill has been an outstanding chief of staff during one of the busiest and the most consequential years of my administration," Obama said.

Daley entered the White House a year ago after Rahm Emanuel left to become Chicago mayor, replacing Daley's retiring brother, Richard Daley, in that post.

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No other "chairman" have yet been named to the president's reelection team. Others will be appointed in the coming weeks, an Obama campaign official  told Fox News

Daley "has got a ton of political experience, knowledge and contacts, and we look forward to leveraging those assets and working closely together to reelect the president this year," the official said.

The change will be effective at the end of this month. Daley had said publicly that he would stay through the president's election battle, but is now set to leave after Obama's State of the Union address.

Daley was already seen to be transitioning out of the position for several weeks as Pete Rouse, who held the post temporarily after Emanuel's departure, took on more authority within the White House.

Daley's departure would seem to be an acknowledgement that the White House needs to retool its message going into the election year. He has previously served as Al Gore's campaign chairman, and was the official who came out on Election Night 2000 in Nashville for the dramatic moment before the recount to say the election is not over yet.

Both Lew and Daley, who reportedly had his share of complaints over the testy White House relationship with Congress, have champions on Capitol Hill, including on the other side of the aisle.

Sen. John McCain tweeted that he was sorry to see Daley go.

"I regret the departure of Bill Daley - an honest broker and a man of integrity," McCain said.

But his departure is also an opportunity for the White House to try and get something done this year. Lew is considered a self-effacing, behind-the-scenes, Washington player who has already been working on the payroll tax cut battle and other debt and deficit issues that are sure to be rigorous points of contention along the campaign trail.

"I'm pleased to announce that Jack Lew has agreed to serve as my next chief of staff," Obama said. "Jack has had one of the other most difficult jobs in Washington. ... If anyone had been following the news lately can tell you, this is not an easy job."

Lew, however, should not expect to get too much done. Republican National Committee Chairman Reince Priebus said Daley was hired to bridge the divide between Obama and "America's job creators,: but instead "found himself trying to defend the indefensible in Obama's failed economic policies."

"The fact is even Obama's point man to the business community knew his policies were too wrought with liberal activism and stifling regulation to create jobs," he said in a statement. "If nothing else, today's White House shake-up makes it even more clear that every decision is being made through the lens of Obama's reelection."