Ties to Business

"This is a strong appointment," said Thomas Donohue, president of the Chamber of Commerce, a lobby group that says it represents more than 3 million businesses. "Bill Daley is a man of stature and extraordinary experience in government, business, trade negotiations, and global affairs."

US President Barack Obama introduces William Daley (R) as the new White House chief of staff in the East Room of the White House in Washington Jan 6, 2011. [Photo/Agencies]

The choice draws on Obama's Chicago background. Daley is the brother of Chicago Mayor Richard M. Daley and son of Richard J. Daley, the city's mayor from 1955 through 1976.

Daley's selection, along with the expected naming of Treasury official Gene Sperling as a senior economic adviser, would mean a return to the White House of experienced hands from their days working for Clinton, who presided over a growing economy in the 1990s.

Obama is reshaping his White House staff to prepare for the next two years of divided government - with Republicans now in control of the US House of Representatives - and lay the groundwork for his re-election campaign.

Daley was involved in Clinton's tough negotiations over the 1994 North American Free Trade Agreement, which was opposed by organized labor and many Democrats, and China's effort to gain most-favored-nation trading status.

AFL-CIO President Richard Trumka said Obama is entitled to choose a chief of staff in whom he has complete confidence but will "ultimately be judged by results - whether the economy recovers robustly and begins to generate good jobs on the scale needed to improve the lives of working people."

Marshall Front, founder and chairman of Chicago-based investment firm Front Barnett Associates LLC, which owns bank stocks, said he hoped Daley's appointment could ease frictions with the corporate world.

Rouse became interim chief of staff when Rahm Emanuel resigned last year to run for Chicago mayor. White House spokesman Robert Gibbs said it Rouse who had suggested Daley to be chief of staff.

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.