Obama signals priority with Daschle pick
*Obama chooses former heavyweight senator as health chief
*Republicans say Obama staffing picks are a disappointment
*Bill Clinton agrees to ethics reviews for future business and charitable activities
By Jeff Mason and Caren Bohan
CHICAGO, Nov 19 (Reuters) - U.S. President-elect Barack Obama selected Tom Daschle, a heavyweight former senator, to be his health secretary on Wednesday, while former President Bill Clinton took steps to help secure his wife the nation's top diplomatic job.
Daschle, who served almost two decades in the Senate and was majority leader from 2001-2003 while Democrats controlled the chamber, is a high-profile pick for the lower-profile department of health and human services, reflecting the priority Obama intends to put on health care reform.
Daschle has close ties to the president-elect, having encouraged him early on to run for the White House and advised him during the campaign.
Two Democratic officials said the South Dakota native had accepted the job.
The agency he will lead oversees programs such as Medicare, the federal health insurance plan for people over the age of 65, which is expected to see costs balloon as the U.S. population ages.
The department is likely to spearhead Obama's charge to expand health-care coverage to 47 million uninsured Americans, a key promise of his presidential campaign.
Another Democrat passionate about health care reform, New York Sen. Hillary Clinton, was said to be weighing the option of becoming secretary of state or staying in the Senate, where she could help advance domestic policies.
Her husband, former President Bill Clinton, offered to allow ethics reviews of future business and charitable activities should she be picked by Obama to take the foreign policy post, Democrats familiar with the issue said.
The former president is working to address questions about whether his philanthropic and business work would create the appearance of a conflict of interest in the event his wife got the job.
"He is definitely helping. He is not an obstacle at all," a Democrat familiar with the situation said.
NEW WHITE HOUSE TEAM
Obama continued to assemble his White House team from his transition offices in Chicago, where he held private meetings on Wednesday with Vice President-elect Joe Biden and others.
He added a handful of former Clinton administration aides to his team, including Daniel Tarullo, Susan Rice and James Steinberg, to advise him on policy matters as he prepares for his move to the White House.
Obama, who will succeed President George W. Bush on Jan. 20, released a list of names of people who will head "policy working groups" during the next two months of the presidential transition.
Many of the names were considered contenders for top jobs in the administration.
Tarullo, an expert on the international economy and regulatory matters and a professor at Georgetown University, was named to head up the economic working group.
Steinberg, who was deputy national security adviser to Clinton, and Rice, who was assistant secretary of state for African affairs in the Clinton administration, will head the advisory team on national security.
Daschle was listed as heading a health care working group.
Republicans lambasted his selection to head the health and human services department.
"Barack Obama is filling his administration with long-time Washington insiders," said Alex Conant, a spokesman for the Republican National Committee.
"Since losing his Senate seat, Tom Daschle has worked for a major lobbying firm. For voters hoping to see new faces and fewer lobbyist-connections in government, Daschle's nomination will be another disappointment."
After failing in his re-election bid in 2004, Daschle has worked as a public-policy advisor for the law firm Alston and Bird. He was reported to be a candidate for Obama's chief of staff before that job went to Illinois Rep. Rahm Emanuel.
(Additional reporting by Steve Holland, Andy Sullivan, and Vicki Allen; Editing by Cynthia Osterman)
