'It is time for me to go back to the city I love,' Daley wrote in his letter of resignation. Daley to step down as chief of staff

Bill Daley is stepping down from his job as White House chief of staff and will be replaced by budget director Jack Lew, President Barack Obama announced Monday.

Daley’s tenure has been plagued by complaints about his management style and his rocky relations with Congress. He already had ceded some responsibility in recent months, but his decision to leave his post surprised White House officials.


“Bill has been an outstanding chief of staff during one of the busiest and most consequential years of my presidency,” Obama said in brief remarks from the White House State Dining Room.

“There is no question that I will deeply miss having Bill by my side here at the White House,” the president added. “Chicago is only a phone call away, so I plan to seek Bill’s advice in the months and years to come.” The transition will take place at the end of the month.

Obama said that Daley had specifically recommended Lew for the job, and the president approached him the day after the recommendation. Lew accepted the post on Friday, a senior administration official said. The job went to Lew because of his strong connections with lawmakers and his wide variety of experiences in government and the private sector.

“I have every confidence that Jack will make sure we don’t miss a beat and continue to do everything he can to secure our economy and help the middle class and keep America safe,” Obama said.

Before joining the Obama administration, Lew spent several years as chief operating officer of Citigroup’s alternative investments unit. Daley also had a background in investment banking, working at JPMorgan Chase before starting as Obama’s chief of staff in January 2011. During his year on the job, Daley worked to improve the president’s strained relationship with the business community.

Daley and Lew shared another connection: Both served in the Clinton administration.

But Lew also has some experience that Daley lacked. He spent nearly a decade on Capitol Hill, beginning in the late 1970s working for Tip O’Neill, the legendary former Democratic speaker of the House. He has stronger relationships than Daley on both sides of the aisle and is particularly close to Senate Majority Leader Harry Reid (D-Nev.) and Sen. Chuck Schumer (D-N.Y.). Reid’s camp was frequently irritated by Daley’s blunt style and tendency to delegate to subordinates.

Congressional Democrats were heartened by news of the switch, suggesting that Lew’s presence would improve relations that have sometimes been tense.

Reid applauded Obama’s selection, calling Lew “a consummate professional with intimate knowledge of Congress” who is “uniquely qualified to handle this challenging job.” But his statement on Daley was icier: Reid declared his “deep respect for Bill Daley’s dedication to public service.”

Among Republicans, the feeling is decidedly mixed. One top aide Monday said Lew has a “decent understanding” of the Hill and is seen as “less liberal” than Obama’s other top advisers. But another GOP aide called Lew a “liberal ideologue.”

Daley had said he planned to stay on the job through the election this fall and then return home to Chicago.

But he offered his letter of resignation to Obama last week. “I have been honored to be a small part of your administration,” Daley said in the letter, dated Jan. 3. “It is time for me to go back to the city I love.”

Obama initially asked Daley to think over his decision, but Daley returned the next day to say that he did indeed want to leave. The Chicago Tribune first reported on Daley’s resignation about an hour before Obama spoke.

“Bill told me he wanted to spend more time with his family, especially his grandchildren, and he felt it was the right decision,” the president said. “The pull of the hometown we both love … was too great.”

Daley said in an October interview with Chicago’s NBC affiliate that he had “made a commitment to the president through his reelection” but would return to Chicago after that.

The first signs of Daley’s reduced role at the White House emerged a few months ago, as he shifted some of his internal day-to-day management responsibilities to Pete Rouse. Rouse was the interim chief of staff in late 2010 after Rahm Emanuel, the first person to hold that position in the Obama White House, departed. Rouse, a longtime Senate staffer, resisted taking on the job full time.

Though White House press secretary Jay Carney tried to downplay that shift, saying “a little bit more is being made of this than is in fact happening,” other insiders saw the division of responsibilities as a major step.

Some staffers were “doing cartwheels” that Rouse was taking over most of Daley’s responsibilities on Capitol Hill, a senior Democratic aide told POLITICO at the time.

Though Daley made the West Wing more efficient, his style annoyed many staffers. He kept the door to his office closed and often excluded midlevel staffers from meetings they had attended under Emanuel and Rouse.

He also led the West Wing during tactical missteps, including miscalculating the willingness of House Speaker John Boehner (R-Ohio) to reach a “grand bargain” on deficit reduction.

Daley also mistakenly assumed that Boehner had agreed to host Obama’s speech to a joint session of Congress on Sept. 7, the same night as a Republican presidential debate. Boehner publicly said he had never given final approval to the date, forcing the White House to retreat and reschedule the speech.

In the same interview in which said he planned to return to Chicago, Daley also said he did not know what he would do after leaving the White House.

For now, at least, he has one answer.

He will co-chair Obama’s reelection campaign, a campaign staffer said.

Carrie Budoff Brown, Manu Raju and Glenn Thrush contributed to this report.

CORRECTION: An earlier version of this story referred incorrectly to additional co-chairs of Obama’s reelection campaign.