Nov. 21 (Bloomberg) -- Senator Hillary Clinton is in line to become Barack Obama’s secretary of state, according to an aide to the president-elect, as Obama narrowed his choices for White House national security adviser.

Retired Marine General James Jones and James Steinberg, a former White House and State Department aide, have emerged as top candidates for the national security adviser post, according to people familiar with the selection process.

Obama also is considering New Mexico Governor Bill Richardson as Commerce Department secretary, according to a Democratic aide, who spoke on condition of anonymity.

Clinton’s selection as secretary of state nominee is likely to be formally announced after the Nov. 27 U.S. Thanksgiving holiday, according to the Obama aide.

“We’re still in discussions, which are very much on track. Any reports beyond that are premature,” Clinton spokesman Philippe Reines said, giving the first official confirmation that Clinton and Obama were talking about the post.

Clinton would be Obama’s highest-ranking Cabinet officer -- the secretary of state is fourth in the line of presidential succession. Backers say the popularity of both Hillary and Bill Clinton overseas would be a boon to the U.S.’s global reputation.

“She can have enormous impact in the world,” said lobbyist Steve Elmendorf, a Democratic strategist who supported Clinton during the primaries.

Potential hurdles related to financial disclosures by Clinton’s husband, former President Bill Clinton, have been worked out, said the Obama aide, who asked not to be named.

Business Interests

Bill Clinton sent Obama’s transition team a list of more than 200,000 donors to his foundation, according to a Democrat familiar with the process.

“I’ll do whatever they want,” the former president told reporters in New York earlier this week.

Clinton traveled to Chicago last week to meet with Obama about the Cabinet position.

Richardson, 61, is another former primary rival who met with Obama in Chicago. The former energy secretary and United Nations ambassador under Bill Clinton was also on the list of contenders for secretary of state. He had endorsed Obama after ending his own bid for the Democratic nomination.

Policy Differences

Clinton, 61, who would become the third woman to hold the secretary of state post, frequently sparred with Obama on the campaign trail about foreign policy. She ran a television advertisement dubbed “3 a.m.,” in which she questioned whether Obama, with less than one full term as a senator from Illinois, was experienced enough to handle a national crisis.

Still, she and Obama, 47, agree on many of the biggest issues of the day. Both favor negotiating to halt North Korea’s nuclear program, pressuring Russia on democracy, working with China while pressing for human rights and keeping the embargo on Cuba while allowing family visits. Both have also repeatedly criticized President George W. Bush for the way he handled diplomatic relations with the rest of the world.

Earlier this year, Lee Feinstein, then national security director for Clinton’s campaign, said she would “pursue a strong and progressive foreign policy that stresses cooperation.”

There also are differences. Anti-war voters considered Clinton more of a hawk, playing to Obama’s advantage during the primaries. His campaign was eager to highlight their differences on foreign policy and her vote to authorize the Iraq War; her advisers said she was more savvy about complex global threats and dismissed Obama as naive.

Criticized Obama

During the primaries, Clinton also criticized Obama for agreeing to meet with foreign leaders of countries such as Iran without preconditions.

Clinton would have to resign from the Senate, where she has served since 2001, if nominated and confirmed. New York Governor David Paterson, a Democrat, would appoint someone to replace her until a special election in 2010.

Obama also is assembling his White House national security team.

Jones, 64, served as supreme commander of the North Atlantic Treaty Organization from 2002 to 2006 and commandant of the Marine Corps from 1999 to 2002. After leaving the NATO post, he was named last year as special U.S. envoy to the Middle East.

A spokesman for the Obama transition team, Brooke Anderson, declined to comment on the selection for national security adviser.

Jones’s chief of staff at the U.S. Chamber of Commerce Institute for 21st Century Energy, Sarah Farnsworth, said Jones was traveling and unavailable for comment.

She said Jones, the president and chief executive officer of the institute, is attending an energy security conference in Florida. “It’s a great example of how he’s been focused on energy and national security,” she said.

Personal Representative

Steinberg, 55, served as deputy national security adviser to Bill Clinton from 1996 to 2000 and Clinton’s personal representative, or “sherpa,” at the 1998 and 1999 Group of Eight summits. Earlier, Steinberg was director of the State Department’s policy planning staff.

The national security adviser position isn’t subject to Senate confirmation.

Meanwhile, Obama today named Patrick Gaspard as director of the White House Office of Political Affairs and Jackie Norris as chief of staff to Michelle Obama. Gaspard came from the Service Employees International Union’s Local 1199 to serve as Obama’s national political director during the campaign.

Norris worked for the Obama campaign in Iowa for the caucuses and general election. She is a veteran of the Clinton administration, working for Vice President Al Gore and Housing and Urban Development Secretary Andrew Cuomo.

Vice President

Three members of Vice President Joe Biden’s staff were also named: Catherine Russell as chief of staff for Jill Biden, Cynthia Hogan as counsel to the vice president, and Moises “Moe” Vela Jr. as director of administration.

Russell and Vela also served in the Clinton administration, Russell as deputy attorney general and Vela as chief financial officer and senior adviser on Hispanic affairs for Gore. Hogan has worked for Biden for almost 20 years including staff director and chief counsel for the Senate Judiciary Committee when he chaired the panel.

To contact the reporters on this story: Kim Chipman in Chicago at kchipman@bloomberg.net; Ken Fireman in Washington at Kfireman1@bloomberg.net.

Last Updated: November 21, 2008 19:01 EST

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