Sen. Evan Bayh (Ind.) will step down as chairman of the Democratic Leadership Council next month, paving the way for Iowa Gov. Tom Vilsack to take the reins of the party’s premier centrist policy organization.

The passing of the torch will occur at the DLC’s “National Conversation” in Ohio, where it will also be announced that Sen. Hillary Rodham Clinton (N.Y.) is going to assume a policy role with the group her husband, former President Bill Clinton, helped establish 20 years ago.

The change in leadership at the DLC comes at a time when Democrats, as a political party, are struggling to define their ideology after losing seats in the House and Senate and failing to wrest control of the White House from Republicans.

Spokesmen for Vilsack and Clinton each deferred questions on the subject to the DLC. Tammy Sun, a DLC spokeswoman, said she was not able to “confirm” the forthcoming leadership changes, but added, “stay tuned and we will see you at the National Conversation in July.”

Several independent Democratic sources, however, verified the new roles Vilsack and Clinton will assume in the organization, as well confirming that Sen. Tom Carper (Del.) will replace Rep. Ellen Tauscher (Calif.) as the DLC’s new vice chairman.

While the DLC is independent of the Democratic Party, it is viewed as a springboard for lawmakers interested in running for the White House. Bill Clinton was chairman when he started running for president in 1991. The chairman in 2000, Sen. Joe Lieberman (Conn.) was the vice presidential nominee on the losing ticket headed by another DLC alumnus, then-Vice President Al Gore.

Sen. Clinton and Vilsack are often mentioned as potential 2008 presidential candidates, as is Bayh. The Indiana Democrat is expected to devote his time in the next three years to his Senate duties and evaluating a possible bid for the White House.

In the short term, a struggle remains over the direction of the party. Centrists advocate the party move to the political middle in an attempt to appeal to a broader swath of voters, while liberals argue that Democrats need to honor their roots.

Senate Minority Leader Harry Reid (Nev.) and House Minority Leader Nancy Pelosi (Calif.) have made bridging the differences between the differing political factions a top priority.

As for recalibrating their political strategy, Democratic National Committee Chairman Howard Dean has been working with the Democratic governors to help promote the party’s message beyond the Beltway in an attempt to counter the power of the White House bully pulpit.

Several Democrats suggested the DLC was making a politically wise move by placing Vilsack in such a prominent position as the organization works to advance its philosophy of “spurring private sector economic growth, fiscal discipline … community policing … work based welfare reform, expanded international trade and national service.”

A Democratic lobbyist said it is imperative that the party show voters that not all of its political leaders live and work in Washington.

“At this point, anything you can do to take the national party leadership out into the states is a positive thing,” said the lobbyist, who would only be quoted if he was not named. “Anything you can do to exert some influence out of Washington is going to be a net gain.”

A Democrat within the centrist movement said it is surprising that the DLC is embracing Clinton, who is viewed by many as a flag-bearer of liberalism in the party.

“The perception is going to be that there is no more ‘center’ to the Democratic Party,” said the source, who asked not to be named, fearing retribution from DLC leaders.

A senior Democratic aide suggested Clinton’s involvement with the DLC is just another move toward expanding her political appeal as she ponders a presidential bid.

“It makes sense she is putting her tentacles into everything as she is building her ’08 campaign,” the aide said.

The DLC’s National Conversation is scheduled for July 25 in Columbus. Bayh, Carper, Clinton, Vilsack, Kansas Gov. Kathleen Sebelius and Virginia Gov. Mark Warner are all scheduled to attend.