Clinton Moves to Widen Role of State Dept.

WASHINGTON — Even before taking office, Hillary Rodham Clinton is seeking to build a more powerful State Department, with a bigger budget, high-profile special envoys to trouble spots and an expanded role in dealing with global economic issues at a time of crisis.

Mrs. Clinton is recruiting Jacob J. Lew, the budget director under President Bill Clinton, as one of two deputies, according to people close to the Obama transition team. Mr. Lew’s focus, they said, will be on increasing the share of financing that goes to the diplomatic corps. He and James B. Steinberg, a deputy national security adviser in the Clinton administration, are to be Mrs. Clinton’s chief lieutenants.

Nominations of deputy secretaries, like Mrs. Clinton’s, would be subject to confirmation by the Senate.

The incoming administration is also likely to name several envoys, officials said, reviving a practice of the Clinton administration, when Richard C. Holbrooke, Dennis Ross and other diplomats played a central role in mediating disputes in the Balkans and the Middle East.

As Mrs. Clinton puts together her senior team, officials said, she is also trying to carve out a bigger role for the State Department in economic affairs, where the Treasury has dominated during the Bush years. She has sought advice from Laura D’Andrea Tyson, an economist who headed Mr. Clinton’s Council of Economic Advisers.

The steps seem intended to strengthen the role of diplomacy after a long stretch, particularly under Secretary of State Colin L. Powell, in which the Pentagon, the vice president’s office and even the intelligence agencies held considerable sway over American foreign policy.

Given Mrs. Clinton’s prominence, expanding the department’s portfolio could bring on conflict with other powerful cabinet members.

Mrs. Clinton and President-elect Barack Obama have not settled on specific envoys or missions, although Mr. Ross’s name has been mentioned as a possible Middle East envoy, as have those of Mr. Holbrooke and Martin Indyk, a former United States ambassador to Israel.

The Bush administration has made relatively little use of special envoys. Secretary of State Condoleezza Rice has personally handled most peacemaking initiatives, which has meant a punishing schedule of Middle East missions, often with meager results.

“There’s no question that there is a reinvention of the wheel here,” said Aaron David Miller, a public policy analyst at the Woodrow Wilson International Center for Scholars. “But it’s geared not so much as a reaction to Bush as to a fairly astute analysis of what’s going to work in foreign policy.”

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With so many problems, including Pakistan, Iran and Afghanistan, Mr. Miller said it made sense for the White House to farm out some of the diplomatic heavy lifting.

In addition to the Middle East, one Democratic foreign policy adviser said, Mr. Holbrooke might be considered for an appointment as special envoy to Afghanistan and Pakistan, and possibly Iran. The adviser said the decision had not been made.

A transition official dismissed as “speculation” reports in Indian newspapers that Mr. Obama was considering appointing Mr. Clinton as a special envoy to deal with Kashmir issues.

But another transition official confirmed that Mr. Obama’s foreign policy advisers were discussing the possibility of appointing a special envoy to India. Mr. Steinberg, who is the dean of the Lyndon B. Johnson School of Public Affairs at the University of Texas, would probably coordinate the work of any special envoys, the official said.

The recruitment of Mr. Lew — for a position that was not filled in the Bush administration — suggests that Mrs. Clinton is determined to win a larger share of financial resources for the department. A well-connected figure who was once an aide to Speaker Thomas P. O’Neill, Mr. Lew now works for Citigroup in a unit that oversees hedge funds.

“If we’re going to re-establish diplomacy as the critical tool in America’s arsenal,” a senior transition official said, “you need someone who can work both the budget and management side. He has very strong relations on the Hill; he knows the inner workings of how to manage a big enterprise.”

The official, who spoke on condition of anonymity because the discussions were private, said Mrs. Clinton was being supported in her push for more resources by Defense Secretary Robert M. Gates and Mr. Obama’s incoming national security adviser, Gen. James L. Jones Jr.

For years, some Pentagon officials have complained that jobs like the economic reconstruction in Afghanistan and Iraq have been added to the military’s burden when they could have been handled by a robust Foreign Service.

“The Pentagon would like to turn functionality over to civilian resources, but the resources are not there,” the official said. “We’re looking to have a State Department that has what it needs.”

Mrs. Clinton’s push for a more vigorous economic team, one of her advisers said, stems from her conviction that the State Department needs to play a part in the recovery from the global financial crisis. Economic issues also underpin some of the most important diplomatic relationships, notably with China.

In recent years, the Treasury Department, led by Henry M. Paulson Jr., has dominated policy toward China. Mr. Paulson leads a “strategic economic dialogue” with China that involves several agencies. It is not yet clear who will pick up that role in the Obama administration, although Vice President-elect Joseph R. Biden Jr. is frequently mentioned as a possibility.