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Who might replace Rahm Emanuel?

By Ed Henry, CNN Senior White House Correspondent
  • Rahm Emanuel could enter the race to replace retiring Chicago Mayor Richard M. Daley
  • White House aides Tom Donilon and Ron Klain are the front-runners for chief of staff
  • Phil Schiliro could end up being the surprise pick to replace Emanuel
  • Obama's style is to stay within a pretty tight circle of advisers

Washington (CNN) -- The smart money in Washington and Chicago, Illinois, says it's all but a certainty that within weeks Rahm Emanuel will throw his hat into the ring to replace retiring Chicago Mayor Richard M. Daley. So the parlor game over who will replace Emanuel as White House chief of staff has already kicked into high gear.

I've been hitting the phones and working the BlackBerry since Daley announced his plans to step down, and a clear consensus has emerged among top strategists within the Democratic party: Two White House aides -- Tom Donilon and Ron Klain -- are the clear front-runners to take over Emanuel's office just steps from the Oval Office.

But also pay close attention to a name you have not heard much about yet, but that could end up being the surprise pick: Phil Schiliro. Schiliro doesn't grab a lot of headlines but has a huge fan in the president himself and could wind up shocking the political world by snagging the top job.

There are other big names in the running as well, from Chicago intimates like Valerie Jarrett to Washington insiders like CIA chief Leon Panetta and former Clinton chief of staff John Podesta. Other candidates with more outsider credentials could emerge if the president ultimately decides he wants to shake things up a bit more to signal a fresh start. But the betting among top Democrats is that the ultimate choice will be an insider.

"I don't think they are going to go very far out of their orbit," said one top Democratic strategist who's in close touch with the White House.

Video: Chicago's political climate

A second top Democrat with close ties to the West Wing said flatly: "I've heard three names: Donilon, Schiliro, and Klain."

But this top Democrat cautioned that the ultimate decision is, of course, up to the president himself, and Obama always has the option to go outside the circle. "If he goes outside, a lot of people could be in play," said this source.

'Rahmbo' Emanuel: Obama's enforcer

Obama's style is to stay within a pretty tight circle of advisers. This decision, coming at roughly the halfway point of his term, is monumental -- because the new chief of staff will play a critical role in setting the course of the final two years leading into the president's likely run for re-election.

It's hard to overstate just how powerful the White House chief of staff is. This is the person that runs the entire White House staff, coordinates the response to national security crises, and shapes the broad message coming out of the administration.

Put more bluntly, the chief of staff is the first person to greet the president in the Oval Office in the morning and the last one to see him at night before he heads up to the residence. He or she has the ability to help set the agenda of the entire U.S. government, which is why most chiefs of staff burn out within a couple of years -- it's simply back-breaking.

That's why even if Emanuel decides to skip the mayor's race, he has told close associates he's likely to leave the exhausting job roughly in the spring of 2011 anyway, according to Democratic sources. So the subtle jockeying to replace Emanuel had already begun privately even before Daley made his announcement, and it will continue if Emanuel ultimately decides to skip the Chicago race -- because at some point soon, the White House job will be open.

To be sure, besides the three names mentioned at the top, there are several other people in the running, including Jarrett. Besides the Chicago connection, she has the benefit of being a trusted adviser to both the president and first lady Michelle Obama, something that nobody else on the list can count on.

But top Democratic strategists plugged into the backstage conversations tell CNN that there is one major issue overshadowing the entire conversation about Emanuel's replacement: the fact that a growing number of party leaders privately believe the next White House chief of staff will likely be dealing with a Republican Congress in January, meaning the new boss needs to have deep congressional ties.

Even in a best-case scenario for the White House, there will be a Democratic Congress with a very thin majority, and having a chief of staff who can deal with Republicans will be an imperative. After then-President Bill Clinton lost control of Congress in 1994, he had enormously effective chiefs of staff in Panetta, Erskine Bowles, and Podesta -- one reason all three men are now emerging as long-shot candidates to be picked by Obama this time.

Given the likely need for a congressional pedigree, Democratic insiders believe it would be hard for Obama to pick Jarrett. She has a lot of terrific qualities that give her high marks among the party establishment, they say, but working the backrooms of Congress is not one of them.

The rush among some pundits to immediately declare that Jarrett will be the choice, simply because she's from Chicago, misses the fact that Emanuel's recruitment for the job immediately after the 2008 election had little to do with his ties to the Windy City.

Did their common hometown make Obama comfortable with Emanuel? Of course. But Emanuel was picked largely because Obama is ultimately a pragmatist who knew that despite his outsider campaign, he needed an insider to pull the strings in Washington, which is why many of his top appointments were experienced former Clinton administration officials.

In short, Emanuel was a political animal, and Obama wanted him because of his experience running the Democratic Congressional Campaign Committee and toiling away in the Clinton White House -- despite the ill-informed narrative critics like to push about how Emanuel is just part of some sort of "Chicago Mafia" that tells Obama what he wants to hear.

That's why it's no accident Donilon and Klain are on the short list: Both have deep congressional ties, as well as time served in senior roles in the Clinton administration. Schiliro also cut his teeth as a top congressional aide, where he worked closely with the Clinton White House on playing defense over investigations led by Republicans like Rep. Dan Burton of Indiana -- a skill that will come in handy for the Obama White House if it's getting subpoenas next year from a Republican-led House.

Here's a look inside my notebook at the raw information I'm picking up from Democratic strategists inside and outside the Obama administration about the early line on who's most likely to get the post:

Front-runners: Tom Donilon and Ron Klain are both huge players inside the current White House, and top Democrats privately say they would not be shocked if either of these aides were elevated to Emanuel's post.

They have a lot in common in terms of their political background, including the fact that they helped candidate Obama with debate prep in 2008, which gave them both face time with the future president.

Donilon seems to have the slightest of edges over Klain, because he currently serves as deputy national security adviser and has positioned himself as a huge force in foreign policy circles -- no small line on the resume when the White House is still dealing with wars in Afghanistan and Iraq. "Combat operations" may be over, but 50,000 U.S. troops are still in the middle of a war zone.

Donilon served in top roles for two secretaries of state in the Clinton administration, Warren Christopher and Madeleine Albright, and has also emerged as a likely successor to the current national security adviser, retired Gen. James Jones, if he decides to leave the White House after the midterm elections.

That leads some top Democrats to privately suggest Donilon may have an additional edge in stature, no small ingredient when one considers that Emanuel has been a high-wattage presence. "I think he has a little more heft," said one top Democratic strategist, pointing specifically to Donilon's national security credentials.

But even this Democratic strategist noted that Klain may have his own edge, in that "he has a really good Hill background" that would be vital to Obama in trying to dealing with the likely new dynamics on Capitol Hill next year.

While Donilon worked on the Senate Judiciary Committee in the 1980s and served as congressional liaison in the Carter White House, that was a generation ago. Klain appears to be much more plugged in to the more recent power centers on the Hill, having served as a top aide to then-Senate Democratic Leader Tom Daschle of South Dakota, among others.

"Given what's coming next year, they need someone with a lot of tactical legislative experience who can work with what's likely a Republican Congress," said one top Democratic strategist. "You have to know when to cut a deal here or there. You have to know when to cut off the knees of your enemies, and then other times you'll have to be diplomatic and work with Republicans to pick up some votes" on a key issue.

That may best describe Klain, who currently serves as Vice President Joe Biden's chief of staff, and is also known as a sharp legal mind who helped with the smooth confirmations of both of Obama's picks for the Supreme Court, Justices Sonya Sotomayor and Elena Kagan. Klain also served as then-Vice President Al Gore's chief of staff in the Clinton White House.

Something to pay attention to is the fact that Democratic insiders point to one political factor that could give Klain the upper hand over Donilon: Before joining the Obama White House, Donilon did some work for Fannie Mae. While he has not been accused of any personal wrongdoing, Donilon's ties could be politically toxic as the economic crisis rages on.

Dark horse: The person who will not grab the headlines, but is the person to watch in this parlor game, is Phil Schiliro, who currently serves as the White House's chief liaison to Capitol Hill. That basically means that he's in charge of keeping his eyes and ears to the ground to figure out how to pass the president's agenda.

Obama has marveled to other aides at how pivotal Schiliro was in helping to win passage of everything from the stimulus to Wall Street reform. It was no surprise that Schiliro was one of only a few administration officials to get a coveted ceremonial pen used by the president to sign health care reform into law, a signal of how critical of a role he played in breaking through one roadblock after another.

Still, since Schiliro has been focused so long on domestic politics, there are some Democratic supporters of his who believe he just does not have the gravitas on national security issues, for example, to be in the hot seat in the event of a crisis.

Regardless of how this job search plays out, however, look for Schiliro to at least be bumped up from congressional liaison to a deputy chief of staff or counselor with a bigger portfolio.

"In the end, I don't think Phil Schiliro will get the job, but he will have a different and elevated role," said one top Democratic strategist. "Obama is very high on him."

The role that Democrats envision is Schiliro becoming the point person on dealing with the White House's tactical, legal, and communications response to investigations by California Rep. Darrell Issa and other top Republicans. While Issa has largely just been a nuisance to the Obama White House thus far, by blasting out letters of complaint and press releases accusing the administration of ethical lapses, he would suddenly have subpoena power if Republicans took over the House majority.

Schiliro has been down that road before, serving as the top aide to Democratic Rep. Henry Waxman of California when Waxman was going toe-to-toe with Republican Rep. Dan Burton of Indiana on one Clinton administration scandal after another. "He knows how those congressional investigations play out," said one Democratic strategist. "He worked for Waxman so long."

Obama has already had problems staying focused on his economic message, and that will only become more difficult if Republicans start firing subpoenas his way. Look for Schiliro to play a pivotal role, whether it's as chief of staff or some other top job.

Chicago: There's really only one Chicago insider who is in the running for the job right now, and that's Valerie Jarrett.

White House senior adviser David Axelrod already has an eye on the door, considering an exit at some point after the midterm elections, since he promised his wife he'd only spend two years in Washington.

And while some Democrats say Axelrod is so close to Obama that he could be talked into staying around longer, maybe staying on as senior adviser -- organization is not his strong suit, so he would never get the chief of staff job or aspire to it.

Jarrett is a power player in her own right, and her proximity to the entire first family should not be underestimated in this process, given Michelle Obama's vast influence with her husband.

But top Democrats note that Jarrett already has a power center inside the White House and seems happy right where she is, as a senior adviser and assistant to the president for public engagement and intergovernmental affairs.

"I don't think the Valerie talk is real," one top Democrat said of the speculation. "Given the challenges presented by a [likely] Republican Congress, it just seems unlikely."

Graybeards: The name of Tom Daschle has been floated, largely because he still carries enormous respect and clout inside Washington. And don't forget that Daschle still has deep ties to Obama, dating back to the days when he was the first powerful national Democrat to really push Obama to run for president in the first place.

But many top Democrats are privately shooting down the prospect of Daschle becoming chief of staff, especially given the fact that his nomination to be secretary of health and human services crashed and burned over tax issues that would have made Senate confirmation bumpy if not impossible.

While this job is an appointment by the president that does not require Senate confirmation, many Democrats believe both Obama and Daschle just do not want to re-open some of the old wounds. And besides, Daschle is pretty happy making millions of dollars in the private sector -- why would he want to take on the back-breaking task of digging out of what's likely to be a rough midterm election?

In a similar way, many Democrats privately say they do not see Panetta wanting to leave all the power he has as CIA chief to take a job he's already had -- been there, done that. Nevertheless, given his vast experience guiding Clinton through stormy Republican waters, plus his long tenure on Capitol Hill before that, Panetta is a strong candidate on the list.

Likewise, Podesta is highly respected in Democratic circles and his name has surfaced as a possibility to return to his old job. Bowles has also been mentioned, but he was not quite as hands-on as Panetta or Podesta.

"Leon or John would be more likely than Erskine," said one top Democratic strategist. "Erskine had a strong legislative team around him, and he wasn't a legislative strategist."

Another complication is that Bowles is already serving as co-chair of a bipartisan budget deficit panel that Obama created by executive order to try to come up with concrete proposals to cut the spiraling U.S. debt.

On one hand, naming Bowles as chief of staff could send a powerful signal that Obama is serious about following up on the report's recommendations. On the other hand, those recommendations have to be sent to Congress by December 1, which means the panel will be hard at work deliberating the actual recommendations in November. That could be the very timeframe that Obama is picking a new chief of staff, since the filing deadline for the Chicago mayor's race is November 22.

Some Democratic strategists say it's hard to believe that Obama would pluck Bowles out of the panel right in the middle of the most important stage of its work -- potentially blowing up the whole process that the White House has claimed will be an important guide as it tries to tackle the fiscal crisis.

Also keep an eye on: Denis McDonough is highly regarded throughout the West Wing as chief of staff at the National Security Council and has the president's ear on foreign policy in a major way. Some Democratic insiders think he has an outside shot at replacing Emanuel, but others think he's more likely to stay in the national security world.

Either way, his influence will continue to rise, especially if Donilon becomes White House chief of staff, opening up a deputy national security adviser slot, which would be a step up for McDonough.

Power behind the throne: Finally, you're going to hear the name of Pete Rouse as a possible chief of staff. He's almost definitely not getting the job, but that's by design: He's such a self-effacing behind-the-scenes player that he doesn't really want the job.

But interestingly enough, Rouse may be the single most pivotal person, other than the president himself, inside the White House in terms of deciding who does get the job. As a current deputy chief of staff to Emanuel, Rouse is extremely close to Obama himself.

Their bond goes back nearly a decade, to when Rouse was serving as longtime chief of staff to Tom Daschle. After Daschle was defeated in 2004, the newly elected Sen. Obama convinced Rouse to stay in the chamber as his own chief of staff.

Rouse is known for sharp political instincts, fierce loyalty, and absolute discretion on sensitive matters -- all key attributes in an important process like this. Democratic insiders say that along with Axelrod and Jarrett, Rouse will be one of the last people that the president talks to before he makes the final decision on Emanuel's successor.

"Pete won't get the job, but Pete will have more influence on who gets this job than anyone else," predicted one senior Democratic strategist.