President Barack Obama's realignment of his senior staff in the White House was already having a ripple effect, but perhaps not in the way he intended.
According to White House sources, the loser in last week's announcements that Chicago machinist, William Daley would return to Washington as Obama's chief of staff was senior adviser Valerie Jarrett.
"She didn't want that job, but she wanted more responsibilities shifted into her office," says a White House source. "She wanted to remain the key point person for the White House's interaction with the business community, and now that has been taken away from her."
According to another White House source, Jarrett was advocating for more economic policy influence to be shifted to a White House council she would have essentially managed with new Council of Economic Advisers chair Gene Sperling.
"She insisted that Sperling needed to be managed, that he wasn't 'all in' on our economic plans," says one of the White House sources. She knows Daley and can work with him, but the realignment was a huge slap in the face to her.
In fact, Jarrett became an exceedingly wealthy and influential player in Chicago politics thanks to the Daley family's good graces. But in the two years that Jarrett has served as the point person for business, the Obama administration has taken a black eye over a black eye seemingly every week.
CEOs grew tired of being told to wait in the lobby of the West Wing for as long as a half an hour for meetings that lasted sometimes less than that. There are numerous stories of Jarrett personally calling CEOs and dressing them down with verbal assaults for perceived slights in comments about the U.S. economy or the President's handling of the economy.
More than six months ago, senior economic adviser Larry Summers threw up his hands in frustration over the Obama Administration's handling of the business community and the economy. "He just apologized to me and said that there was nothing more he could do help us get our message to the President, that it was just a waste of time," says a Washington-based senior executive with ties to a manufacturing association. "For the first two years, he was the only guy we could go to for a sympathetic hearing. Now, I guess, we have Daley."
The only problem: the White House now views its relationship with American business as repaired, now that Daley is in the fold, and does not intend to perform much more intensive outreach than it already has. "There is a sense here that business has gotten its tax breaks, now it's time to shut up and perform," says one White House source.
Republicans members of the House Financial Services committee intend to formally request copies of the report that Gene Sperling, the new chairman of the White House Council of Economic Advisers, was paid almost $900,000 to write for Wall Street investment firm Goldman Sachs in 2008.
The report laid out a plan for Goldman to underwrite a $100 million program in Africa to educate and train more than 10,000 women in under-developed countries.
"It would be interesting to pull back the curtain on how these Wall Street firms dole out their charitable contributions and foundation money to people like Sperling and others," says a House committee staffer. "What, exactly, did Sperling give them for that kind of money? A 10-page report? Something bigger? This guy is cozy with the wrong people at the wrong time for the American people."