Obama's Chief of Staff Bill Daley Resigns Jack Lew will replace him By Kevin Spak, Newser Staff Posted Jan 9, 2012 1:55 PM CST 11 comments Comments William Daley is seen in this Dec. 8 file photo. (AP Photo/Carolyn Kaster, File) (Newser) – William Daley is ending his tumultuous tenure with the Obama administration, stepping down as chief of staff to make way for current budget director Jack Lew, White House sources tell the LA Times. Daley handed in his letter of resignation last week, and President Obama will announce the move this afternoon. Officials say Daley's resignation caught Obama by surprise; he had been counting on Daley to help navigate the impending budget showdown with Congress. "It is time for me to go back to the city I love," Daley wrote, though he had promised to remain with Obama for the rest of his first term as recently as October. But in November he half-resigned, handing over the day-to-day running of the administration to Pete Rouse. His replacement, Lew, is a longtime Democratic operative with a reputation as a pragmatist able to work with Republicans, Politico reports, even quoting Eric Cantor as praising his role in budget talks.