(Updates with background)
By Jeff Mason
WASHINGTON, March 4 (Reuters) - White House economic adviser Brian Deese is a leading candidate to become deputy director of the Office of Management and Budget, according to sources familiar with the matter.
Deese, now deputy director of the White House's National Economic Council, would join Sylvia Mathews Burwell, currently president of the Walmart Foundation, whom Obama tapped on Monday to be director of OMB.
Deese is a young, popular member of the president's economic team who was closely involved with the administration's bailout of the auto industry.
Deese coordinates policy at the White House on taxes, financial regulation, clean energy, and manufacturing.
If confirmed, Deese would help Burwell in executing the president's budget goals of reducing the U.S. deficit while investing in areas that would spur U.S. competitiveness such as early childhood education and clean energy technology.
Prior to his time in the White House, Deese served as economic policy director to then-Senator Hillary Clinton's 2008 presidential campaign.
He then became one of the rare Clinton staffers who landed in Obama's orbit after her loss in the Democratic nominating contest that year, serving as deputy economic policy director in Obama's campaign.
Deese is known within the White House for being able to explain complicated economic policy in layman's terms. He has traveled with Obama on domestic trips as the president pressed for economic policy initiatives.
In January, Deese said Obama would seek "targeted and smart" investments in research and aim to use corporate tax reform to "level the playing field" for renewable forms of energy.
OMB and its leaders are likely to play a key role in the budget fight with Congress over spending cuts and tax breaks. Obama and congressional leaders failed to reach a deal last week to block or delay $85 billion in automatic spending cuts known as "sequestration." (Editing by Sandra Maler)