In a jolt to the White House, President Barack Obama announced Monday that chief of staff William Daley was quitting and heading home, capping a short and rocky tenure that had been expected to last until Election Day. Obama budget chief Jack Lew, a figure long familiar with Washington's ways, will take over one of the most consuming jobs in America.
Daley's run as Obama's chief manager and gatekeeper lasted only a year. It was filled with consequential moments for the White House, like the killing of al-Qaida terrorist leader Osama bin Laden, but also stumbles with Congress and grumbles that Daley was not the right choice to coordinate an intense operation of ideas, offices and egos.
Obama said he reluctantly accepted the news and at first refused to accept Daley's post-holidays resignation letter last week.
Daley did not waver, expressing to his boss a desire to get back to his family in Chicago, where Daleys have dominated city politics for decades. But he offered no explanation on Monday about what accelerated his decision; he had committed to Obama that he would stay on through the election.
It apparently became clear that the fit was no longer working for either side. Senior adviser Pete Rouse had already taken on more of the day-to-day management.
Stepping in is the mild-mannered Lew, who began his career on Capitol Hill, where he spent nearly a decade as principal domestic policy adviser to the late House Speaker Tip O'Neill. Lew, 56, has worked for Obama as a deputy secretary of state before becoming budget director, the same position he held in the Clinton administration.
Daley had been brought in for his political savvy, business ties and experience as a commerce secretary. Yet as an outsider, he did not personally know Obama well, meaning he was forced to figure out the president and run his operation simultaneously. He did not seem to mesh as the one, more than anyone, charged with ensuring a smooth operation.
The president delivered the other side of the story, describing Daley as highly influential and effective.
White House officials said that to the degree Daley gets blame for any missteps, he also deserves credit for his work during a remarkably demanding year that ended on a high for Obama, with a political victory over House Republicans in getting a payroll tax cut extended.
"No one in my administration has had to make more important decisions more quickly than Bill. And that's why I think this decision was difficult for me," Obama said in a State Dining Room that was nearly empty except for the assembled media.
The mood was decidedly more low-key than other transitions involving the top staff job at the White House.
Obama now plows ahead in an election year with his third chief of staff _ one of the most crucial positions in government and politics. Daley had replaced the colorful and involved-in-everything Rahm Emanuel, who left the job to run for Chicago mayor, a position he now holds. Rouse also served as interim chief of staff for a stretch.
Those following Washington politics had seen this day coming, especially since Rouse took on more of Daley's traditional role in November. Although Obama praised Daley at length for his help on major decisions in 2011, the West Wing had endured private struggles with coordination and communication, particularly with Congress.
Daley, 63, was not pushed out the door, said a Democratic strategist familiar with the decision The timing was driven by Daley's personal reflection, yet it also only would have gotten more awkward for the White House had he not left before Obama's tone-setting State of the Union, said the strategist, who spoke on condition of anonymity to discuss the personnel matter.
The State of the Union speech is Jan. 24, followed closely by the release of his White House budget proposal in early February. The chief-of-staff transition is expected by the end of the month, with Lew staying on at the Office of Management and Budget until the budget plan is released. It is unclear who will lead the agency after that.
Lew and Daley stood with the president on Wednesday but did not speak. The White House said neither man was giving interviews.
Lew's private sector experience includes a stint as managing director and chief operating officer of Citigroup's global wealth management division.
Daley, meanwhile, will serve as a co-chair of Obama's Chicago-based re-election efforts, said a campaign official, who requested anonymity ahead of the official announcement.
Unlike Daley, Lew comes with deep connections to Congress, where Obama's relationship with lawmakers is a source of constant debate.
Coming after Emanuel, a former congressman and a leader of his caucus, Daley's relationship with congressional Democrats was hardly smooth.
Senate Majority Leader Harry Reid, D-Nev., who after being accustomed to speaking with Emanuel up to a dozen times a day, was in contact with Daley only rarely, according to a former senior Senate Democratic leadership aide who talked on condition of anonymity to speak about private relationships.
Reid sent out an upbeat statement on Lew ("a consummate professional with intimate knowledge of Congress) and Daley (for "handling crises few chiefs of staff have had to face.")
Daley also was blamed by congressional Democrats for an embarrassing incident last fall when Obama was forced to reschedule his plans to deliver a jobs speech to Congress after House Speaker John Boehner, R-Ohio, rejected the date Obama first proposed.
Matters hit a new low when Daley complained in an interview with Politico in October that both congressional Republicans and Democrats were making life difficult for the president. Reid objected strongly to Daley's mention of problems with Democrats, considering his efforts to advance Obama's agenda, the aide said.
Associated Press writers Erica Werner and Julie Pace contributed to this report.