A trusted aide with first-hand experience negotiating with Republicans has emerged as the favorite to become President Barack Obama's new top economic policy adviser, Democratic sources said.
Several sources close to the deliberations said Gene Sperling, a Clinton administration veteran, has gained traction in the last few weeks as a potential successor to Larry Summers, who is departing as director of the National Economic Council.
Sperling is seen as having an edge over two other leading contenders, investment banker Roger Altman and Yale University President Richard Levin.
A source familiar with the matter also said Obama is considering tapping J.P. Morgan Chase executive William Daley for a senior role within the White House, possibly as chief of staff.
Sperling, 52, brings a unique characteristic to the table: he has actually done the NEC job, a role that coordinates economic advice throughout the administration.
Sperling, who serves as counselor to Treasury Secretary Timothy Geithner, has a reputation as a savvy political and economic expert and is known for his tireless work ethic.
"The president is considering a number of qualified candidates and he has not made a decision or offered a job," White House deputy communications director Jen Psaki said.
"The most important qualification is finding the right person for the job, who can lead the team at this pivotal time in recovery."
Psaki declined to say whether Sperling had emerged as the leading candidate.
Some liberal Democrats see Sperling as too close to Wall Street because of work he has done as a consultant and because he was at the NEC during a period of financial deregulation under former President Bill Clinton.
Sperling helped put together the $858 billion tax-cut deal hammered out late last year and has helped focus attention on small-business issues within the administration.
Some in the White House were initially hesitant about tapping an administration insider for the NEC job.
After crushing losses by Obama's Democrats in the November congressional elections, the White House was intrigued by the idea of filling the role with a business executive, a move that would signal a fresh policy course.
Sperling's candidacy gained momentum after Obama scored a series of legislative wins in December on the tax cuts and other measures. Those victories removed some pressure to recruit an outside figure for the NEC job.
Critics have accused the administration of being too insular. If Daley ends up moving into a White House job, that would ease some of that criticism.
"What the White House has got to look at is: Who is going to have the best economic plan?" said Julian Zelizer, a history professor at Princeton University.
"Two years from now, they're going to want the person who brought the jobs back and I think that's what makes Sperling attractive. He's very well-respected and his economic advice is well thought out," Zelizer said.
ANNOUNCEMENT EXPECTED SOON
Obama, whose chances of re-election in 2012 may hinge on bringing down the 9.8 percent unemployment rate, is expected to make an announcement soon on the NEC job.
Clashes are looming this year between the White House and newly empowered Republicans over issues including the budget, the economy and regulatory issues.
Republicans will take control of the House this week, and following the November elections, will have strengthened numbers in the U.S. Senate, though not a majority.
Not only has Sperling run the NEC but he did so during a time when Clinton, a Democrat, had to contend with a Republican-led Congress.
"You couldn't find a person who has more hands-on experience navigating difficult economic issues for a Democratic president dealing with a Republican House," said Neera Tanden, a former policy aide to both Obama and Clinton who has worked closely with Sperling.
"He has an experience that few others have," said Tanden, who is now with the Center for American Progress.
A native of Ann Arbor, Michigan, Sperling graduated from the University of Minnesota and Yale Law School and attended Wharton Business School. He was named head of the NEC in December 1996, coordinating economic policy during a period marked by budget battles and an economic boom.
The biggest drawback for Altman, currently the chairman of Evercore Partners, is a perception among some that he would be too sympathetic toward Wall Street. Some have criticized Sperling on the same grounds based on consulting work he did for Goldman Sachs and for some hedge funds.
"This administration and the last one are just too influenced by the big banks on Wall Street," said Peter Morici, an economist at the University of Maryland business school.
Those who have worked with Sperling dismiss such criticisms. They note that he championed a proposal that Obama unveiled last year to slap a fee on the nation's banks and has been a voice for small businesses within the administration.
Some in the business community were disappointed that Obama seemed to be moving away from naming a CEO to the NEC.
"Sperling is a Washington insider par excellence. I think the hope among some quarters was that someone with more experience in areas that would create jobs — the private sector — would have been a really nice thing to have," said Michael Holland, founder of the investment firm Holland & Co.
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