By: Politico Staff

Secretary of State

The ongoing drama about the possibility of Sen. Hillary Rodham Clinton (D-N.Y.) moving to the State Department continued to dominate transition buzz Wednesday. And there were signs that this courtship is moving toward a union of former rivals.

Negotiations between the Clintons and President-elect Barack Obama’s transition team are rapidly moving toward a formal offer of secretary of state to Hillary Clinton, with both sides expecting a formal announcement in the next seven days, according to numerous officials who are involved.

As a key part of satisfying Obama’s vetting team, former President Bill Clinton is open to giving up foreign sources of income if his wife becomes secretary of state, according to a close friend.

— Mike Allen

Securities and Exchange Commission

Two women are among the possibilities mentioned to chair the Securities and Exchange Commission: Nancy Smith, a vice president at AARP Financial Inc., a registered investment adviser and subsidiary of the seniors’ lobby, and Mellody Hobson, president of Ariel Investments, a financial contributor on “Good Morning America,” a director of Starbucks Corp. and two other companies, and a former Princeton University trustee.

— Victoria McGrane

Federal Aviation Administration

Bob Herbert, a senior policy adviser for Senate Majority Leader Harry Reid (D-Nev.), is under consideration to run the Federal Aviation Administration, according to two Democratic Senate sources.

The sources caution that the Obama transition team has not offered Herbert the job, but he has been in serious meetings about it.

— Martin Kady II

Secretary of the Interior

Traditionally, presidents have looked west for secretaries of the interior. So here are three possibilities making the rounds for the post in the Obama administration: former Govs. John Kitzhaber of Oregon and Tony Knowles of Alaska, and Sen. Ken Salazar (D-Colo.).

— Erika Lovley

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