White House staff shake-up comes in wake of health care debacle

President Donald Trump on Thursday shook up his senior West Wing staff, days after his administration faced its first major legislative setback in failing to pass a bill to repeal and replace Obamacare.

Katie Walsh, the White House’s deputy chief of staff, will join a nonprofit group supporting the President’s agenda, a senior White House official and source familiar with the decision said.

The move marks the second departure of a senior White House official in the first months of the administration, following national security adviser Michael Flynn’s forced resignation last month. It also represents a major change in the makeup of the White House’s top staff that could shift the power dynamics within the West Wing, as Walsh was a close ally of Priebus.

Walsh was White House chief of staff Reince Priebus’ deputy, joining him in the administration after serving as chief of staff to Priebus when he was chairman of the Republican National Committee.

Walsh is set to serve as a senior adviser to America First Policies, a nonprofit group helmed by former Trump campaign officials that has struggled to get off the ground in the first months of Trump’s presidency.

A senior White House official insisted that Walsh was “not being fired.”

A source familiar with the inner workings of the White House who called the move a “tremendous loss,” and noted the frustration inside the White House after the administration’s failure to get Republicans to coalesce around a health care bill supported by Trump and House Speaker Paul Ryan. The official said Walsh saw a need to better organize support for the White House’s initiatives on the outside.

“It was a very collective conversation that we could have moved the health care message more effectively,” the White House official said.

A source familiar with the situation added that “getting that coalition on the outside to support this is significant.”

Another source close to the White House said the decision for Walsh to leave and join the outside group was jointly made by Priebus, White House chief strategist Steve Bannon and Trump’s son-in-law and senior adviser Jared Kushner. All three believed that she is the right person to give the administration the “air cover” it so desperately needs — and has been missing thus far.

America First Policies, once envisioned as the marquee outside group to bolster Trump’s political objectives. It has sputtered in the opening months of its presidency, having done no television advertising on behalf of Trump’s Supreme Court nomination, and only began spending to prevent the White House’s embarrassing defeat over Obamacare on the final day of the weeks-long debate.

Just this week, the family expected to be its principal funders, the Mercer family of New York, defected to a rival nonprofit, Making America Great. They brought with them one of the operatives initially slated to work at America First — Dave Bossie, a Mercer hand who had served as deputy campaign manager.