Frank Says Bair Should Have Role as Obama Builds Team (Update1)

Nov. 6 (Bloomberg) -- House Financial Services Committee Chairman Barney Frank said Federal Deposit Insurance Corp. Chairman Sheila Bair should play a prominent role in Barack Obama's administration as the president-elect starts assembling his team.

``I think very highly of her,'' Frank, a Massachusetts Democrat, said yesterday in a telephone interview from New York. ``I think she should play a role.''

Frank has advocated giving Bair, a Republican, greater responsibility in managing the government's response to the mortgage and foreclosure crisis.

Meanwhile, former Clinton administration official and Representative Rahm Emanuel, an Illinois Democrat, has been approached about becoming Obama's White House chief of staff. Emanuel told reporters in Chicago that he has ``a lot to weigh'' given his role as the No. 4 ranking Democrat in the House and because of family considerations.

``This is a personal choice about what my wife and I have to do for our family as much as what I want to do for my career,'' Emanuel said.

Transition Team

The day after Obama, an Illinois senator, won the presidential election over Republican John McCain, the president- elect met for six hours in Chicago with his top advisers and named loyalists and former Clinton administration officials to guide the Jan. 20 transfer of power.

The work will be overseen by John Podesta, onetime chief of staff to former President Bill Clinton, Obama confidante Valerie Jarrett, chief executive officer of Chicago real estate developer Habitat Co., and Pete Rouse, Obama's Senate chief of staff.

Along with a staff of transition officials, Obama, 47, named an advisory board to help with transition planning. It includes Arizona Governor Janet Napolitano, an early supporter, and former Clinton administration officials Carol Browner, William Daley and Federico Pena.

He named as the transition's chief spokeswoman Stephanie Cutter, the communications director for Massachusetts Senator John Kerry during his 2004 presidential race and Michelle Obama's chief of staff during the campaign. Dan Pfeiffer will be communications director after serving in that role during the campaign.

Chris Lu, who served as Obama's Senate legislative director, will be executive director of the transition.

Bush Speech

President George W. Bush urged his staff today to help ensure the Obama team ``hits the ground running'' and show ``decency and professionalism'' during the transition.

A ``peaceful transfer'' is a ``hallmark of our democracy,'' Bush said in a speech on the White House lawn.

Obama's team took the keys to a 120,000-square-foot office in downtown Washington set up by the General Services Administration, which manages government property. The space is enough to accommodate 500 people.

The transition group plans to make Washington the main location for its work. However the president-elect and his two top confidantes, Jarrett and chief strategist David Axelrod, will be in Chicago. Emanuel would be in both cities.

Paul Light, a professor of public service at New York University, said Obama has a special challenge in mapping out a transition and naming Cabinet officials because of turmoil in financial markets and economic uncertainty among the public.

``It heightens pressure on Obama's transition to make sure that the Obama economic team is above reproach, highly skilled and reassuring regarding their understanding of how the economy works and what needs to be done,'' Light said.

Mortgage Crisis

Much of the market and public uncertainty stems from the mortgage crisis. Frank has been an advocate for Bair, praising her for pushing the mortgage industry to expand its actions to keep struggling borrowers in their homes.

``I would consider making her a czar, for now, of getting us out of the foreclosure issue,'' Frank said.

The two leading contenders for Treasury secretary continue to be Lawrence Summers, who held the post in Clinton's Cabinet, and Timothy Geithner, president of the New York Federal Reserve bank.

One former Clinton administration official has taken himself out of the running for an appointment by Obama.

Obama is ``terrific,'' Robert Rubin, Treasury secretary from 1995 to 1999 and an adviser to Obama during the campaign, said in an interview today. ``But I've spoken with him and told him I'm not interested in going back into government.''

Special Projects

Rubin, who advised Obama on economic issues during the presidential campaign, said he told the president-elect he would consider taking on special projects.

Former Senate Democratic leader Tom Daschle and Kansas Governor Kathleen Sebelius are possible contenders for secretary of Health and Human Services, according to people in contact with the president-elect's health-care advisers.

Obama has promised to cut medical costs and make affordable insurance available to everyone, and the chief of the department may play a key role in overhauling the health-care system.

Daschle's book, ``Critical: What We Can Do about the Health Care Crisis,'' calls for an independent agency similar to the Federal Reserve Board to oversee the U.S. health system.

In 2003, Sebelius was the first state insurance commissioner to reject a proposed conversion of a nonprofit Blue Cross Blue Shield into a for-profit company, slowing the pace of such conversions nationally.

``I am honored and humbled to be mentioned in this way,'' Sebelius said in an e-mailed statement. ``I'll be honored to contribute in whatever way I can.''

Daschle didn't respond to a request for comment.

To contact the reporter on this story: Julianna Goldman in Chicago at jgoldman6@bloomberg.net. Alison Vekshin in Washington at avekshin@bloomberg.net;