Published: Jan 07, 2011 7:33 PM EST
Updated: Jan 07, 2011 4:34 PM EST

WASHINGTON-- President Barack Obama named veteran adviser Gene Sperling as director of the National Economic Council Friday, placing a Washington insider with a bipartisan nature in the White House as the administration contends with a divided Congress.

Sperling's appointment coincided with the release of the December jobs report, which showed the unemployment rate dropping to 9.4 percent, its lowest level in nearly two years. But job growth fell short of expectations, and Obama said that Sperling, along with other newly appointed members of the economic team, have a daunting challenge ahead.

"Our mission has to be to accelerate hiring and accelerate growth," Obama said during remarks at a window manufacturing plant in suburban Maryland. "That depends on making our economy more competitive."

Sperling, who had been a counselor to Treasury Secretary Timothy Geithner, is returning to a familiar role. He served as NEC director in the Clinton administration, where he played a key role in the 1993 deficit reduction bill and compromised with a Republican-led Congress on the 1997 balanced budget agreement.

"He's a public servant who has devoted his life to making this economy work - and making it work, specifically, for middle-class families," Obama said.

Sperling takes over for economist Lawrence Summers, who left the White House last month to return to Harvard University. Sperling has worked closely with the president and played a key role in budget negotiations and the administration's small business initiatives. Administration officials say Sperling made a strong impression on Obama last month when he helped secure a compromise with Republican lawmakers on a deal to extend Bush-era tax cuts for all income earners.

Obama also nominated Katharine G. Abraham to his Council of Economic Advisers and Heather Higginbottom as deputy director of the Office of Management and Budget. Those two posts require Senate confirmation. Obama also will elevate economic adviser Jason Furman to assistant to the president for economic policy.

The president spoke at Thompson Creek Window Company in Landover, Md.,a family-owned business that the White House said took advantage of an initiative in Obama's tax compromise with Republicans that allows businesses to expense 100 percent of their investments in 2011. The president made a direct appeal to other companies, telling them now is the time to capitalize on that opportunity.

"If you are planning or thinking about making investments sometime in the future, make those investments now, and you're going to make money," Obama said.

Friday's personnel announcements came amid a wider White House shakeup of top senior leadership. Obama named William Daley, a prominent business executive, as his chief of staff Thursday; press secretary Robert Gibbs is leaving the White House next month to become a paid consultant to Obama's re-election campaign; and senior adviser David Axelrod will head to Chicago next month to lead the re-election campaign, with Obama's former campaign manager, David Plouffe, filling his role at the White House.

As NEC director, Sperling will have a hand in shaping the course of the nearly all of the administration's economic policies, including looming battles with Republican lawmakers on spending cuts and the raising the debt ceiling.

Sperling's pragmatism and his work as a corporate philanthropy consultant to Goldman Sachs, where he was paid more than $880,000, has prompted some liberals to voice misgivings about his appointment. He helped the investment bank design an initiative to provide business education to women in developing countries. He also worked with actress Angelina Jolie to develop education programs for children living in conflict-ridden countries.

"It's hard for me to believe someone gives you $900,000 and you don't feel positively disposed toward them," said Dean Baker, co-director of the liberal Center for Economic and Policy Research.

But Robert Greenstein, executive director of the Center on Budget and Policy Priorities, a liberal-leaning research group, defended Sperling as an advocate of policies that help low- and moderate-income families and especially children.

"That's not exactly what comes to mind when this label gets thrown around that he has ties to Wall Street," Greenstein said.

The selection process for the council dragged on for months. Summers announced his resignation in September, and many in the administration knew well before then that he planned to return to Harvard.

Some White House aides originally wanted Obama to name a business leader to the council job as a way to give the private sector a greater voice in the administration and ease the perception that the president is anti-business. But finding a CEO with economic credentials proved difficult and the White House thinking evolved over time.

Officials became more inclined to find another prominent job for a private sector appointee while leaving the council post to a policy heavyweight who could coordinate the advice Obama receives from throughout the administration. (Copyright 2011 by The Associated Press. All Rights Reserved.)