White House Shuffles Role For Top Aide Daley

September 19, 2011: White House Chief of Staff William Daley, right, walks with Tina Tchen, Chief of Staff to Michelle Obama, on the South Lawn of the White House in Washington as they accompany President Barack Obama and first lady Michelle Obama to New York. (AP)

Washington – In a stunning turnabout just one year before the 2012 election, White House Chief of Staff Bill Daley is handing over some of his day to day responsibilities to the man he replaced only 10 months ago, according to a presidential adviser briefed on the plans.

The adviser confirmed a Wall Street Journal report saying Daley was being demoted to make way for Pete Rouse, a close ally of the president dating back to his days as Obama's Senate Chief of Staff. He served as acting White House Chief of Staff until suggesting the full-time job go to Daley, who came aboard early this year to help shore up the president's standing after a bruising midterm election.

The Journal suggested Daley will take on more of a big picture, ambassadorial role while Rouse will run West Wing operations, an arrangement that would be unprecedented in running a White House.

A senior White House official told Fox News that Daley proposed expanding Rouse's responsibilities after Daley "took some heat for the problems with Congress."

A presidential adviser said Daley, 63, also has "not been getting along" well with some colleagues in the West Wing and raised eyebrows over a candid interview with Politico in which he bluntly said the challenges facing Obama had been "ungodly" and "brutal" over the last three years.

"He doesn't know why he's as high as 44 percent," Daley quipped about the president's standing in the polls.

A senior administration official downplayed the story by stressing to Fox News that Daley has not turned over all day-to-day operations. The official noted Daley had been shifting some responsibilities to Rouse for weeks and suggested the new arrangement is helping operations run more smoothly.

Another Obama adviser confirmed to Fox News that Daley is pulling back and turning over some responsibilities to Rouse, though the source cautioned this should be read more as a fine-tuning than a shakeup.

Nevertheless, this second adviser acknowledged the move is the last thing White House aides wanted to be dealing with one year out from an election that is already an uphill battle for Obama.

Daley's suggestion that Democrats as well as Republicans on Capitol Hill had made things difficult for the president was said to anger people like Senate Majority Leader Harry Reid (D-Nev.), the very people Daley was hired to build bridges to when he signed up.

The shift for Daley comes as Obama's jobs bill has yet to pass Congress and the country faces an unemployment rate of 9 percent.

While White House aides touted Daley's lobbying for the Clinton White House to pass NAFTA in the early 1990's, he has racked up very few legislative victories.

That stands in sharp contrast to his predecessor Rahm Emanuel, who left late last year to successfully run to replace Daley's brother, Richard, as Mayor of Chicago.

While Emanuel ruffled feathers inside and outside the White House, he racked up victories on the stimulus, health care reform, and new Wall Street regulations.

While Daley's background on NAFTA and his experience in the Clinton Cabinet during divided government was touted as an asset as the president governed with a new Republican House, this asset has not panned out.

His executive experience was also supposed to build a bridge to the business community.

Daley raised eyebrows recently when he told a Chicago TV station he planned to only serve through the 2012 election, an odd statement because top White House officials do not usually telegraph lame duck status so far in advance.

A second presidential adviser said in retrospect it seemed Daley was sending a signal he wanted to "cut his losses -- get the president re-elected and then get out."

In the Politico interview, Daley concluded with a comment that might be read differently now.

"You can just feel this electorate is very volatile," he said. "So strap yourself in."