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STEVE INSKEEP, host:

It's MORNING EDITION from NPR News. Good morning, Im Steve Inskeep.

ARI SHAPIRO, host:

And Im Ari Shapiro.

President Obama will announce that his chief of staff is stepping down today. Rahm Emanuel wants to explore a bid for the mayor of Chicago.

INSKEEP: Before going to the White House, he was an aide to Bill Clinton. He was also a leading member of Congress, and he is considered one of Washington's most colorful figures. But he's always said mayor of Chicago was his dream job.

SHAPIRO: Today marks the beginning of two stories. One is, what happens to Rahm Emanuel next? The other is, who takes the office next to the president in the White House?

Here's NPR's national political correspondent Mara Liasson.

MARA LIASSON: When President Obama put together his initial White House staff, choosing the colorful, profane and driven Emanuel was the most conspicuous sign that he wanted a legislative machine; a team of hard-nosed political players with the skills to get a big ambitious agenda passed on Capitol Hill.

Here's how Emanuel - or Rahm, as he is universally known - described his approach back in march of 2009.

Mr. RAHM EMANUEL (Chief of Staff, White House): You've got to know when to press down on the accelerator, when people basically don't want to move or don't want to make a decision; you've got to know when the pull back and let that process kind of develop.

LIASSON: The process took longer and sometimes turned out to be much messier than anyone in the White House imagined. But as former Clinton Chief of Staff John Podesta says, Rahm succeeded.

Mr. JOHN PODESTA (Former Chief of Staff, White House): Rahm is not an uncontroversial guy.

(Soundbite of laughter)

Mr. PODESTA: ...but he is an effective guy. And I think when history looks back at this period of time, people will be incredibly impressed in what the president was able to do. And a lot of the credit for that goes to Rahm.

LIASSON: In hindsight, Emanuel's warning about the dangers of pushing forward with health care in the teeth of a recession seems prescient. But once the decision was made to go forward with an overhaul, Emanuel's strategy of making deals with the big industry groups early on kept the bill from failing.

Now, the president has to replace Rahm. Mr. Obama's senior adviser and longtime aide Pete Rouse will fill the post on an interim basis. Then, says Podesta, the president has to think about who would be best for the second chapter of the Obama presidency - when the Obama legislative machine will, of necessity, dial down.

Mr. PODESTA: The game is going to shift from one of powering legislation through the Hill - which was what presidents do in their first two years; it's what Reagan did, it's what Clinton did - but now, it's really all about execution, and getting everything he can out of a big, strong and diverse team. And so that's what I'd be looking for, whether that comes from the inside or the outside.

LIASSON: An insider or an outsider - that's another fundamental question the president has to resolve. Democratic strategist Steve Elmendorf suggests someone from the outside.

Mr. STEVE ELMENDORF (Democratic Strategist): Any campaign team, and White House team, has to worry about becoming insular. I mean, there's no question that when you get in that building, and you go there every day, and you work there 18 hours a day, you lose contact with the rest of the world. And that's why I think a lot of the turnover at two years, in an administration, is not a bad thing. Bringing in some new people, and some fresh blood, is something that they should do.

LIASSON: And that's what President Obama might do - with one caveat.

Mr. ELMENDORF: I think if you look at him and his history so far, it's likely to be somebody who he's close to, who he knows.

LIASSON: The Obama leadership team is famously small and tightly held, with just a handful of top aides working closely with the president. Insiders who are potential permanent replacements for Emanuel include Rouse; Vice President Biden's chief of staff, Ron Klain; and Deputy National Security Adviser Tom Donilon.

Outside names include John Podesta and former Senate Majority Leader Tom Daschle, who was once slated to be health czar until tax problems derailed his appointment.

Whoever he turns to, says Former Reagan Chief of Staff Ken Duberstein, it should be someone who is suited for a new era of smaller - or even nonexistent -Democratic majorities in Congress.

Mr. KEN DUBERSTEIN (Former Chief of Staff, White House): I would think President Obama would want to reach out, not with the appointment of a Republican, but with somebody who, in this polarizing time - recognize that sometimes polar opposites attract.

So that person has to have the level of wisdom and maturity and stature, not simply to be respected by all parts of Obama world, but also to have the respect of the other side of the aisle.

LIASSON: Stature is the key word here. Duberstein isnt the only one in Washington who thinks the president needs a chief of staff who can play a role few on the domestic side of the Obama team have filled so far - as a public surrogate for the president.

Mara Liasson, NPR News, the White House.

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