SETTING UP SHOP

WHITE HOUSE TRANSITION | Could Chicago's Emanuel be chief of staff? He isn't saying 'no'

WASHINGTON -- With Barack Obama's lead growing and John McCain's path to the White House shrinking, speculation is growing about who will serve in an Obama administration as Obama's transition team works behind the scenes.

Former Clinton White House chief of staff John Podesta -- a native of Chicago's Jefferson Park community who now runs a Washington think tank -- is overseeing Obama's already robust transition operation.

Rep. Rahm Emanuel (D-Ill.), another alumnus of the Clinton White House, is advising on inauguration matters, process, personnel and priorities, if indeed Obama wins. On Sunday, ABC's George Stephanopoulos asked Emanuel whether he would be interested in serving as Obama's chief of staff. Emanuel did not rule it out.

Meanwhile, I'm told Chris Lu will be the executive director of the transition; Lu is a Harvard Law School classmate of Obama's who was Obama's Senate legislative affairs director, recently promoted to chief of staff in the Senate office.

Obama's team started mulling transition issues as long ago as April, I'm told, before Obama had the Democratic nomination locked up, but did not want anyone acknowledging their work. "Barack was emphatic," a source told me. "We don't want to get ahead of ourselves."

But it is only prudent to plan. McCain also has a transition group.

The transition operation is commissioning white papers on how to turn campaign promises into action; arranging security clearances for those involved in the handover; figuring decision time lines; strategizing on how the executive office should be organized, and filling the top 100 positions.

Stephanopoulous asked Emanuel about serving as an Obama chief of staff on his "This Week" show. Emanuel said, "Three -- six years ago, the people on the North Side of Chicago took a bet on a young kid."

Mentioning men who held the seat before him, Emanuel said, "Members of Congress, representatives in that district were Dan Rostenkowski, Frank Annunzio, Rod Blagojevich, and they took a bet on a kid called Rahm Emanuel.

"Now I've got gray hair, and I started this at 6-2 and 250 pounds, and that's all I got left. So I'm looking forward to representing the people of the North Side of the city of Chicago," said Emanuel, who on Sunday was 5-8 and 147 pounds.

Other names being mentioned for Obama White House chief of staff are former Sen. Tom Daschle (D-S.D.); real estate executive Valerie Jarrett, the confidante of Michelle and Obama; banker William Daley, the former commerce secretary and Mayor Daley's brother, and Peter Rouse, Daschle's former chief of staff.

My handicapping:

Emanuel now is the No. 4 leader in the House. He is his own man, not the beneficiary of derivative power. He could be on a path to be speaker someday. If Obama leaves him where he is, Obama will have a pair of powerful, trusted enforcers in Congress: Emanuel in the House and Sen. Dick Durbin, the No. 2 man in the Senate.

Jarrett's strength is her relationship to the Obamas. I see her in a White House role similar to that of Bruce Lindsey, the Bill Clinton pal who served in both terms of the Clinton White House as an adviser who had patronage in his portfolio.

As a former commerce secretary who ran Al Gore's presidential campaign, Daley might not find the chief of staff job so appealing. He's a top executive at Chase and mulling a run for governor of Illinois.

Daschle and Rouse are both very viable choices. Rouse helped draft "the plan" that mapped out Obama's path to the White House implemented during Obama's freshman year in the Senate.

Rahm Emanuel (above) would not rule out the possibility of serving as White House chief of staff in an Obama administration when asked Sunday. Others talked about are names familiar on the Chicago scene including former Commerce Secretary William Daley and former CTA chairwoman Valerie Jarrett. Another possibility is former Senate Majority Leader Tom Daschle.