Obama signals priority with Daschle pick

By Jeff Mason and Caren Bohan

CHICAGO (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.

The selection of Daschle, the former Senate Democratic leader and part of Obama's inner circle, signaled an intention by the Democratic president-elect to make an aggressive push to overhaul the healthcare system.

Another member of Obama's close-knit inner-circle, David Axelrod, was named senior White House adviser, according to an announcement from the president-elect's transition team.

Obama's top choice for secretary of homeland security is Arizona Democratic Gov. Janet Napolitano, CNN reported late on Wednesday, citing multiple Democratic sources close to the transition.

CNN, quoting sources, also reported that billionaire Chicago businesswoman Penny Pritzker, was Obama's top choice for commerce secretary. Pritzker, whose family founded the Hyatt hotel chain, was national finance chair of Obama's presidential campaign.

Axelrod, who was Obama's strategist during the campaign and has been a political consultant for a long list of prominent Democratic politicians, was seen as a crucial player behind Obama's comfortable win over Republican John McCain in the November 4 presidential race.

Obama is likely to rely heavily on Axelrod for advice in pushing an agenda of healthcare reform, middle-class tax breaks and other domestic priorities, as he prepares to inherit a deepening financial crisis and a ballooning budget deficit.

Greg Craig, a former special counsel to Clinton who defended him during his impeachment troubles, will become White House counsel when Obama takes office on January 20.

Daschle served almost two decades in the Senate and was majority leader from 2001 to 2003 while Democrats controlled the chamber. He has served as a mentor 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 healthcare coverage to 47 million uninsured Americans, a key promise of his presidential campaign.

HILLARY CLINTON CONSIDERS STATE DEPT. JOB

Another Democrat passionate about healthcare reform, New York Sen. Hillary Clinton, was 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.