Shuffling his second-term Cabinet, President Barack Obama plans to nominate Housing Secretary Shaun Donovan to be budget director and is considering San Antonio Mayor Julian Castro to succeed Donovan, according to people familiar with the selection process.
The moves would raise the profile of two men with close ties to the president.
Donovan is an original member of Obama's Cabinet and is well-liked within the White House, where officials have lauded his work overseeing the government's response to Hurricane Sandy.
As budget director, he would have significant influence over the administration's policy and spending priorities.
Castro's star has been on the rise since Obama picked him to deliver the keynote address at the 2012 Democratic National Convention. The 39-year-old Castro is considered a possible vice presidential pick in 2016.
If Castro is nominated to head the Department of Housing and Urban Development and is confirmed by the Senate, he would become one of the highest-ranking Hispanic officials in the Obama administration.
A person familiar with the selection process said Donovan has been offered the budget director job and has accepted. A person with knowledge of Castro's vetting said the mayor has expressed interest in the housing job and plans to accept if it is offered following a formal screening process.
Both people spoke on the condition of anonymity because they were not authorized to discuss the situation ahead of an official announcement from the White House. The White House said Saturday that it had no personnel announcements to make.
Obama has previously tried to offer Castro a Cabinet post, but the mayor decided to stay in San Antonio and handily won a third term last year.
"This was a job I really did look forward to growing up, when I thought about politics," Castro said in 2011. "So I'm not in a hurry to leave."
Still, Castro and his brother have become popular figures on the Democratic fundraising circuit. Julian Castro in particular is seen as a possible running mate in 2016 for a party that has staked its success in presidential elections in part on winning broad support from Hispanics.
Serving in Obama's Cabinet would help broaden Castro's experience beyond local politics.
HUD plays a key role in the "Promise Zone" initiative, a federal effort to revitalize high-poverty communities by increasing economic activity, improving educational opportunities and leveraging private capital. San Antonio was among the first cities that received a grant for the program from the administration.
Donovan has overseen the department throughout Obama's presidency. The 48-year-old is seen by Obama advisers as a strong manager and was tapped in 2012 to oversee the administration's response efforts after Sandy battered the East Coast.
"In the aftermath of Sandy, when we thought about who was somebody who we had confidence could drive a process to make sure that the federal, state and local coordination delivered for the people who had been affected, and that we could rebuild both on the New York side and the Jersey side as effectively as possible and as quickly as possible, Shaun came to mind," Obama said Wednesday during a fundraiser in New York that Donovan also attended.
The director of the Office of Management and Budget is a Cabinet-level post under Obama. Those who have held the job earlier in the administration, including current Treasury Secretary Jacob Lew, have played crucial roles in setting budget priorities and negotiating fiscal agreements with Congress.
If confirmed by the Senate, Donovan would take over from Sylvia Mathews Burwell, who was nominated to lead Department of Health and Human Services after Kathleen Sebelius resigned this year.