WASHINGTON (AP) — Barack Obama is enlisting former Senate leader Tom Daschle as his health secretary, embracing a third Washington insider in the early stages of Cabinet-building by the president-elect who promised change. Hillary Rodham Clinton, the capital’s most famous woman for two decades, seemed ever more likely to be his secretary of state.

Clinton is deciding whether to take that post as America’s top diplomat, her associates said Wednesday. And Obama is poised to announce that his attorney general will be Eric Holder, who was the Justice Department’s No. 2 when Sen. Clinton’s husband was president.

Keeping the seating charts straight is Rahm Emanuel, Obama’s chief of staff and another veteran of the Clinton White House.

It’s still early in the building of an administration by the candidate who built his campaign on promises of change. But so far fresh faces have been few.

Daschle’s selection to head the Department of Health and Human Services — confirmed Wednesday but not yet announced — isn’t at the same level of Cabinet prestige as the top spots at the State and Justice departments. But the health post could be more important in an Obama administration than in some others, making Daschle a key player in helping steer the president-elect’s promised health care reforms

The former South Dakota senator’s return to the government will be a vindication of sorts. He was the Senate Democratic leader when he was defeated in 2004 by Republican John Thune, who persuaded voters back home that Daschle was more concerned with Washington than with them.

In fact, Daschle stayed in the capital city after his defeat, becoming a public policy adviser and member of the legislative and public policy group at the law and lobbying firm Alston & Bird. Daschle isn’t registered as a lobbyist. He advises clients on issues including health care, financial services, taxes and trade, according to the firm’s Web site.

Health care interests, including CVS Caremark, the National Association for Home Care and Hospice, Abbott Laboratories and HealthSouth, are among the firm’s lobbying clients.

Daschle’s appointment was not formally announced, but Democratic officials said the job was his barring an unforeseen problem as Obama’s team reviews his background. One area of review will include the lobbying connections of his wife, Linda Hall Daschle, who has worked mostly on behalf of airline-related companies over the years. The officials spoke on condition of anonymity because they weren’t authorized to discuss the matter publicly.

Linda Hall Daschle was acting administrator of the Federal Aviation Administration in the Clinton administration and is one of Washington’s top lobbyists. Her clients over the past year included American Airlines, Lockheed Martin and Boeing, Senate lobbying records show. Daschle’s lobbying firm said Wednesday that she would be leaving the group at the end of the year.

Tom Daschle, who will be 61 next month, was a close adviser to Obama throughout the former Illinois senator’s White House campaign. He recently wrote a book on his proposals to improve health care: “Critical: What We Can Do About The Health-Care Crisis.” He also has been working with former Senate leaders on recommendations to expand health coverage.

An array of consumer groups quickly lined up in support of Daschle as secretary of a department that oversees nearly a quarter of all federal spending.

“Someone with his stature and clout, combined with his passion and expertise in health care, is an exciting choice,” said DeAnn Friedholm, Consumers Union’s campaign director for health care reform.

Said Ron Pollack, executive director of Families USA: “His new leadership position confirms that the incoming Obama administration has made health care reform a top and early priority for action in 2009.”

Republicans sniped at what they saw as an unwelcome trend.

“Barack Obama is filling his administration with longtime Washington insiders,” said Alex Conant, spokesman for the Republican National Committee. “Since losing his Senate seat, Tom Daschle has worked for a major lobbying firm. For voters hoping to see new faces and fewer lobbyist connections in government, Daschle’s nomination will be another disappointment.”

Daschle will not only work on efforts to reduce the ranks of the uninsured, but he’ll also be tasked with improving the nation’s food and drug safety as well as overseeing safety net programs like Temporary Assistance for Needy Families.

Confirmation should be no problem.

“It’s a terrific choice,” said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee. “I am elated. As a former member he certainly knows the Congress, he knows the Senate, he is deeply committed to health care reform.”

Daschle is a senior fellow at the Center for American Progress, a liberal think tank run by top Obama transition adviser John Podesta, a former Clinton White House chief of staff. According to his center biography, Daschle serves on the advisory boards of Intermedia Partners and the BP America Inc. external advisory council, and on the boards of CB Richard Ellis, Mascoma Corp., Prime BioSolutions, The Freedom Forum, the Mayo Clinic, the Center for American Progress, the LBJ Foundation and the National Democratic Institute for International Affairs. He is also a member of the Council of Foreign Relations.

His son, Nathan, is the executive director of the Democratic Governors Association. His daughter, Kelly, is a senior producer for AP television news in Washington.

Daschle’s strong Capitol Hill ties and knowledge of how the Health and Human Services Department works mean “it is a perfect appointment,” said former Republican Rep. John Porter, who chairs the medical research advocacy group Research!America. “He’ll do an outstanding job.”

In his book, Daschle reviewed how he believed the health care reform effort failed during the Clinton administration — an effort that was led by Sen. Clinton, who was then first lady. He bemoaned the complexity of the legislation before Congress then and the time it took to put it together.

“Everybody was in favor of health care reform. But when it came down to the details, few groups were willing to tolerate provisions that might harm them, to swallow new regulations or to sacrifice some profits for the greater good,” Daschle wrote. “Instead of seeing the broad picture, each stakeholder focused on its own narrow interests and dug in for battle. The result is that the great health care debate of the early 1990s expired with barely a whimper.”

As secretary, he will also deal with the growing budgetary woes of some of the nation’s most important health agencies.

One example: Years of funding that didn’t keep up with inflation mean the National Institutes of Health has lost 14 percent of its buying power, said Dr. Harold Varmus, NIH’s former director and now a science adviser to Obama’s campaign. That has left promising disease research without money to move forward.

Obama also announced several transition working group leaders on Wednesday, including Daschle, who will oversee the health policy working group. Others include former Environmental Protection Agency administrator Carol Browner on energy and environment, and former Clinton White House adviser Jim Steinberg and Obama campaign senior foreign policy adviser Susan Rice on national security.