By Jeff Mason
WASHINGTON, March 19 (Reuters) - U.S. President Barack Obama has asked Jeff Zients to stay on as acting budget director, the White House said Monday, a move that takes him out of the running to become U.S. trade chief.
White House spokesman Jay Carney said Zients, who had been the front-runner to take over as U.S. Trade Representative, would remain in his current job, confirming a Reuters report.
A source familiar with the White House plan said Obama decided he needed Zients to stay on the economic team at a time when the Office of Management and Budget, or OMB, was playing a critical role in dealing with across-the-board budget cuts, known as the sequester.
"USTR is no longer an option," the source said.
Zients would stay in his current role until the confirmation of Sylvia Mathews Burwell, whom Obama has nominated to lead OMB.
Carney said the president's request did mean the White House was concerned that Burwell, a former official in the Clinton administration and head of the Walmart Foundation, would have trouble getting Senate approval.
"Confirmations take a certain amount of time, even when they're smooth, and this is an enormously important agency, especially at this time," Carney told reporters.
"(Zients) brings a unique set of talents and wisdom to this job and the president appreciates his service and his willingness to continue as acting director."
The move leaves the top job at USTR open for a while longer. A nominee is not expected to be announced immediately.
White House adviser for international economics Michael Froman was considered to be back among the mix of candidates to take over as trade representative. Sources told Reuters earlier this year that Froman preferred to remain in his current job, which includes overseeing trade and energy policy as well as serving as the president's "sherpa" in G8 and G20 meetings.
Other candidates include Demetrios Marantis, deputy U.S. trade representative and former chief international trade counsel for Senate Finance Committee Chairman Max Baucus; Commerce Undersecretary for International Affairs Francisco Sanchez; and U.S. Export-Import Bank President Fred Hochberg.
Baucus and the Senate finance committee's top Republican, Orrin Hatch, on Tuesday lavished praise on Marantis, who is serving as acting U.S. Trade Representative after Ron Kirk stepped down last week.
"You'd make a good U.S. trade representative yourself because you're one of these people who has an open mind, who is really trying to do the best job that he can," Hatch said during a hearing with Marantis on the White House's trade agenda.
The source said it was unclear how long Zients would stay in the budget office after Burwell took over. The president hoped he would remain in the administration and other options for him would be considered, the source said.
Trade positions are among the remaining few posts that Obama has not filled in his second-term Cabinet.
Chicago businesswoman Penny Pritzker is still considered the front-runner to become secretary of commerce, according to one source familiar with the matter.
Another source said Zients could be in the running for Commerce or for an ambassadorship.
Zients is popular among White House staff and has served as acting budget director for some time. Some critics expressed concern that a lack of international trade experience would make him unfit for the top job at USTR.
Asking him to keep his budget role could have been a graceful way of saving face after that criticism.
Obama leaves for a trip to the Middle East on Tuesday, suggesting any further Cabinet announcements were not expected to come until next week at the earliest.