William Daley: Obama Needs Him for 2012 Reelection Campaign

The president's new chief of staff will be focused on 2012, insiders tell Jonathan Alter. Plus, why Rahm Emanuel, David Axelrod, Valerie Jarrett, and Pete Rouse see Daley as their fixer.

William Daley and President Obama. Credit: Win McNamee / Getty Images

The coverage of Bill Daley’s appointment as White House chief of staff has focused mostly on how he’ll use his stature as a grownup to work with Republicans on a growth package and help President Obama mend his relations with the business world. But White House insiders say these are all in service to a more baldly political goal: to get Obama reelected.

Bill Daley, son and brother of Chicago’s most legendary mayors, is the consummate political executive. That’s an occupation that’s a little different than politician or political operative—think Jim Baker (chief of staff under Ronald Reagan) or Sam Skinner (another Chicago lawyer, under George H.W. Bush), not Karl Rove or Rahm Emanuel, who as Daley’s much less polished protégé urged Obama to make this choice. Like Baker and Skinner, Daley served in the Cabinet (as Commerce secretary under Bill Clinton). He understands the interplay of politics and policy and how to preside over a political organization.

The most relevant job he’s held was as chairman of Al Gore’s presidential campaign. When he took over in 1999, Gore, once the frontrunner, had slipped more than 20 points behind Bill Bradley in the contest for the Democratic nomination. A year and a half later, Gore was, in a manner of speaking, elected president. “He’s deliberate and analytical but can also make a decision,” says Carter Eskew, Gore’s chief strategist and a founder of the Glover Park Group. “It’s a nice, and unusual, combination.”

From his days as a partner at the Chicago law firm Mayer, Brown and Platt, Daley developed a reputation as a calm counselor with sound, savvy judgment unfettered by the conventional wisdom. While the left remains leery of him because of his work engineering the North American Free Trade Agreement in 1994 and his recent role as a senior executive at JPMorgan Chase (where he lobbied against the new financial consumer bureau), it’s not personal. Howard Dean, who has feuded with Emanuel, endorsed Daley for chief of staff around the same time that Thomas Donohue, president of the Chamber of Commerce, called it a “strong appointment.” His enemies are few.

Obama’s connection to the Daleys was Axelrod, who worked over the years for both pro- and anti-machine candidates but eventually developed a close relationship with Bill.

Daley might even prove to be an intermediary between the president and House Speaker John Boehner. Obama and Boehner are oil and water—so far apart they can’t even agree on what they have in common. They’re both smokers, but Obama doesn’t like to admit it. They both worked their way through college bussing tables and taking out the trash, but Boehner still thinks Obama’s an elitist. They’re both golfers but mismatched.

Daley’s a golfer, too, and shares a Midwestern Catholic background with the speaker. The Daleys are political royalty in Chicago but for all the years Richard J. was mayor (1955 to 1976), he always lived in a modest bungalow in Bridgeport on the South Side. Not old man Boehner’s bar exactly, but close enough for some bonding.

Who Wrote the Secret New Obama Novel?House Dems Adjust to Life Without PowerDaley was trained by Jesuits and went to college (Loyola) and law school (John Marshall) close to home. He’s the youngest and some say the smartest of Mayor Richard J. Daley’s four sons (six years behind Rich). When Mike Royko wrote in the 1970s that Bill and his brother John were "too dumb to tie their shoes," Bill called the great columnist and told him they were wearing loafers. Tere’s nothing Back-of-the-Yards about his fancy wardrobe (the same for Boehner’s), but the connection to middle-class values remains. Walter Mondale, Clinton, Gore, John Kerry, and now Obama all hired Daley because he’s a no-bull guy who’s never too far from what the country’s thinking.

Daley’s ascension cements the dominance of Chicago in Democratic politics. David Axelrod and Jim Messina will run the 2012 Obama campaign from there, the first time in modern memory that a reelection campaign has been based outside the Washington, D.C. area. With Emanuel likely to be elected mayor this year, the Windy City is now the party’s energy source.

Already, critics like David Frum are suggesting that this is all too “political” for comfort. Emanuel has little patience for this line of reasoning. “Taking the politics out of politics is like taking the money out of capitalism,” he said recently.

Daley has always gravitated to the junction of politics and capitalism, whether at the Amalgamated Bank of Chicago, SBC Communications (now AT&T), Fannie Mae (where he served on the board until 1997) or at the Commerce Department. He almost ran for mayor himself in 1989 but deferred to Rich and stepped back from conventional machine politics in favor of what the authors Martin Tolchin and Susan J. Tolchin in their new book call " pinstripe patronage"—the use of cozy relations between politicians and business executives to obtain favors and fund campaigns. Sometimes the result is economic development that benefits the public; sometimes it’s self-dealing that enriches only a few; and sometimes it’s both.

Obama’s attitude toward the Daleys and what in Chicago is called “LaSalle Street” has always been ambivalent. Although his wife worked at City Hall for Valerie Jarrett in the 1990s, he was never a part of either the political machine or the downtown business and legal establishment. But he recognized that he needed both to advance to the Senate and the presidency.

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His connection to the Daleys was Axelrod, who worked over the years for both pro- and anti-machine candidates but eventually developed a close relationship with Bill. (As did many reformers who had once despised the Daleys.) One of the reasons Axelrod and other Chicago liberals first came to admire Bill Daley was that he made sure his brother shunned any racial appeals when he ran a losing primary campaign in 1983 against Jane Byrne and the eventual winner, Harold Washington, Chicago’s first black mayor. After his first election in 1989, Rich Daley consistently carried the African-American vote.

John Rogers, a basketball buddy of the president, wealthy fund manager, and ex-husband of former White House Social Secretary Desiree Rogers, recently surprised Chicagoans by endorsing long-shot Carol Moseley Braun over Emanuel for mayor. He’s not sure Emanuel has enough of a connection to the poor and disadvantaged. Rogers has no such misgivings about Bill Daley, with whom he co-chaired Obama’s inaugural. “He asks the right questions—the tough, uncomfortable questions,” Rogers says of Daley. “And has a lot of the right answers.”

Obama’s own relationship with Bill has been harder to figure. When I disclosed in Newsweek in late 2006 that Bill Daley would endorse Obama, it marked the first time a big-time Democrat was defecting from Hillary Clinton. At the time, Mayor Daley was still neutral (“What’s he done?” he asked contemptuously of Obama in private). Bill’s endorsement was explained by some Chicagoans as a part of an effort to win African-American votes for a possible campaign for governor, but it was a big boost nonetheless.

Then, in mid-2007, Obama fell 30 points behind Hillary Clinton and Bill Daley essentially wrote off the campaign. He told friends Obama had done a great job raising money but would fall short. He was still a part of the team throughout, even serving as co-chairman of the transition. But he took no administration post and wasn’t in the inner circle—the “comfort zone,” as it’s sometimes called inside the White House. Obama rarely called him, especially after Daley criticized his decision to hold out for a major health-care bill.

But the “Big Four” of Obama’s first year—Emanuel, Axelrod, Jarrett and interim chief of staff Pete Rouse—all eventually came to see Daley as the answer to some personnel problems. For months, the White House had been under pressure to hire someone with experience in the business world, but few serious candidates emerged. The trouble with business executives in government is that they often know little about politics.

Bill Daley knows both, and he’s a “No Drama” guy. With Axelrod and Emanuel back in Chicago, Obama opted to keep that homey feel inside the White House. He figures it’s his best bet for staying there another six years.

Jonathan Alter is a columnist for Newsweek and a contributing correspondent for NBC News. He is the author of The Promise: President Obama, Year One, a New York Times bestseller out in paperback in January. Alter is also an originator and author of Newsweek's Conventional Wisdom Watch, which uses up, down and sideways arrows to measure and lampoon the news.