Susan E.Rice, the choice for United Nations ambassador, and Dennis Ross, a potential envoy./PAUL J.RICHARDS /AGENCE FRANCE-PRESSE - GETTY IMAGES

By MARK LANDLER and HELENE COOPER


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 for President Clinton, are to be Mrs.Clinton’s chief lieutenants.

Their nominations 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.

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 could bring on conflict with other cabinet members.

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.

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 House 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.”

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.