WASHINGTON - Just one day after his historic win to become the nation's 44th president, Barack Obama was choosing staff, setting up a transition team, and preparing to work with the Treasury Department and Federal Reserve on the financial crisis, according to sources and public statements.

Though he will not be sworn in as president until Jan. 20, Obama yesterday asked Rep. Rahm Emanuel, D-Ill., a close friend and adviser who was a political and policy adviser to former President Clinton, to be his White House chief of staff, one of Emanuel's aides confirmed.

It was not clear at press time if Emanuel would accept the post, the aide said. Obama also set up a transition team headed by John Podesta, Clinton's former chief of staff, as well as advisers Valerie Jarrett and Pete Rouse, according to a statement released by Obama's aides.

The team is to be assisted by an advisory group whose members include several current and former governmental officials including Arizona Gov. Janet Napolitano; Federico Pena, who served as Ttansportation secretary and then energy secretary under Clinton; as well as Carol Browner, former head of the Environmental Protection Agency under Clinton.

Market participants expect Obama to quickly choose a Treasury secretary, possibly within the next two weeks. Anyone chosen would be a nominee and would have to be confirmed by Congress next year.

Former Treasury Secretaries Lawrence Summers and Robert Rubin, both of whom served under Clinton, were seen as the most likely candidates for the Treasury post. Timothy F. Geithner, president and CEO of the Federal Reserve Bank of New York, also is said to be on Obama's short list to head the Treasury.

Geithner forged cooperation among Wall Street firms in New York amid the financial crisis as Fed chairman Ben Bernanke and Treasury Secretary Henry Paulson lobbied Congress in Washington for legislation to buy troubled assets of financial institutions. Before joining the Fed, Geithner worked in the Treasury Department under three administrations. He served as under secretary of the Treasury for international affairs from 1999 to 2001 under Rubin and Summers.

It is not yet clear who Obama might ask to become chairman of the SEC next year. The term of the current chairman, Christopher Cox, expires in June, though he has said publicly that he would leave at the end of the Bush administration.

Several names have been bandied about for Cox's replacement, including even the possibility of the return of Arthur Levitt, who was SEC chairman from 1993 to 2001 under Clinton. Levitt said yesterday that the rumors are untrue. Other candidates include Harvey Goldschmid, an SEC commissioner from 2002 to 2005, as well as Elisse Walter, who is currently on the commission, and Gary Gensler, a former Treasury Department official.

Market participants and the staff of key lawmakers said that the goal for federal officials is likely to be to deal with the most acute and immediate problems in the capital markets for the rest of the year and to then begin next year to look in earnest at fundamental or fairly broad reform of securities regulation.

One big difference between the Bush and Obama administrations is likely to focus on state and local governments, sources said. They have been left out of the economic recovery initiatives put in place by the Bush administration. But Obama's economic recovery plan called for the administration to provide relief to state and local governments.

Sources said they expect the push to overhaul the regulatory structure of the financial markets to begin immediately after Obama is sworn in on Jan. 20.

"Regardless of who was elected, that was always going to be the plan," said Michael Decker, the co-chief executive officer of the Regional Bond Dealers Association. He said Democratic control of both the White House and Congress will "smooth the process" of reform, though he added that a lot of financial services regulatory issues are nonpartisan.

However, the reform efforts will probably ignore the 218-page blueprint for regulatory reform crafted by the Treasury Department earlier this year, which would boost the power of the Fed, change the structure of the SEC, and expand the oversight of self-regulatory organizations such as the Financial Industry Regulatory Authority.

That blueprint was written with "a different slant, which was deregulation, and I don't think that's the direction anyone wants to go now," a congressional aide said.

Two powerful transportation figures in the House - Rep. James L. Oberstar, D-Minn., the chairman of the House Transportation and Infrastructure Committee, and Rep. Peter A. DeFazio, D-Ore., who chairs the committee's highways and transit subcommittee - have been mentioned as possible candidates for the Secretary of Transportation post under Obama.

If either congressman is pulled from the committee to help Obama craft his transportation agenda, it would mean reshifting the powerful committee during a critical time for highway funding. Congress is up against a Sept. 30, 2009, deadline to reauthorize the current transportation bill. Most market participants say Congress will need to overhaul the traditional methods of highway funding that have been written into federal policy for decades.

Other names that have been floated include Pennsylvania Gov. Ed Rendell, former Federal Aviation Administration head Jane Garvey, and Steve Heminger, executive director of the San Francisco Bay area's Metropolitan Transportation Commission.

Shaun Donovan, chairman of the New York City Housing Development Corp. and who is also the commissioner of the city department of Housing Preservation and Development, has been mentioned for a "high post" in the Department of Housing and Urban Development, housing sources said.

Obama will be working with a new Congress. The Democrats have significantly expanded their majorities in the Senate and House but fall short of getting a filibuster-proof margin in the Senate, which would have helped them push legislation through that chamber.

Currently, Senate seats are held by 49 Republicans and 49 Democrats, plus two independents - Sen. Joseph Lieberman from Connecticut, and Sen. Bernie Sanders from Vermont - who tend to vote with the Democrats.

While a few races are yet to be determined, the Democrats picked up five additional seats: Kay Hagan from South Carolina who beat Elizabeth Dole; Jeanne Shaheen from New Hampshre who beat John Sununu; Mark Udall from Colorado who takes over from the retiring Wayne Allard; Tom Udall in New Mexico, who will replace the retiring Pete Domenici, and Mark Warner who won the race in Virginia to replace retiring John Warner.

That gives the Democrats and Independents 56 seats in the Senate. Recounts are expected in at least two races in Minnesota and Georgia where Republicans appear to have won by close margins. But even if those seats turned, the Democrats would not still not have the 60 votes - two thirds of the 100-member Senate - needed to obtain cloture and limit debate on legislation. Earlier this year, many bills languished in the Senate because there were not enough votes to move them forward without the threat of a filibuster.

The Democrats have controlled the 435-member House by a 235 to 199 margin, but picked up at least 20 additional seats during the election. Several House races are still up in the air.

Also there probably be some new committee chairs. Senate Banking Committee chairman Christopher Dodd, D-Conn., is said to be considering a bid to become chair of the Senate Foreign Relations Committee, now that Sen. Joe Biden, D-Del., will step down as chair to become vice president. He has scheduled a press conference for today to discuss his priorities for the next Congress.

Sen. Tim Johnson, D-S.D.would be next in line for the chairmanship of the banking committee, but he suffered a stroke last year and his speech is impaired. Sen. Jack Reed, D-R.I., and Charles Schumer, D-N.Y. also are senior members of that committee and could be considered for the post. The banking committee is losing several prominent Republicans, because of retirements or failed re-election bids, including Dole, Allard and Sen. Chuck Hagel, R-Neb.

Another shake-up among the financial committees will be the pending retirement of House Ways and Means ranking minority member Jim McCrery, R-La. McCrery, who also sits on Congress' Joint Committee on Taxation, plans on returning for Congress' lame-duck session this winter, but is expected to be replaced as the top Republican on Ways and Means by Rep. Wally Herger. R-Calif., next highest ranking party member on the committee.

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