A longtime health policy expert, Tanden will begin planning for potential policy changes that could result from the forthcoming US Supreme Court decision on Republican legal efforts to strike down the Affordable Care Act. She worked in former President Barack Obama's administration as the act was designed and implemented.
Among other duties, the official said, Tanden will also launch a review of the US Digital Service. The service is charged with solving the federal government's information technology and online security issues, recruiting technologists for tours of service akin to the Peace Corps.
The US Digital Service, which is housed within the Executive Office of the President, was launched after the crash of the Healthcare.gov website in 2013. Since the start of the pandemic, it has worked on a number of coronavirus-related projects for agencies across the federal government.
Last month, the service's administrator, Matt Cutts, departed the position.
Biden originally nominated Tanden to be director of the Office of Management and Budget. But Democratic Sen. Joe Manchin of West Virginia joined Republicans in blocking her confirmation, citing her past acerbic criticism of political adversaries in both parties.
In the days after the election, Tanden deleted more than 1,000 tweets from her personal Twitter account. And several key senators came out against her nomination because of her past comments and social media posts aimed at lawmakers.
One of the tweets, reviewed by CNN's KFile, slammed Republicans in 2017 for supporting then-Alabama Senate candidate Roy Moore, calling him an "alleged child molester." Several women accused Moore of molesting and sexually assaulting them when they were teenagers while Moore was in his 30s, accusations he repeatedly denied.
In a deleted tweet from August 2018, Tanden wrote, "Trump just called a black woman a dog and about 80% of the GOP don't think he's racist," adding that the "whole party needs to be defeated."
She also deleted harsh attacks directed at Republican senators who would have been crucial votes to secure her nomination -- including Maine Sen. Susan Collins -- and tweets supporting Democratic opponents.
Tanden withdrew from consideration in March. Shalanda Young, confirmed by the Senate as deputy budget director, is serving as acting director pending confirmation of a permanent choice.
Following Tanden's failed nomination, the White House had indicated that she would serve in another role within the administration.
White House press secretary Jen Psaki said in April that Biden remained "interested in and committed to finding her a position in the administration and taking advantage of all her talents."
Tanden was a longtime aide to Hillary Clinton who became president of the liberal Center for American Progress after leaving the Obama administration.
Her new role does not require Senate confirmation.
This story has been updated with additional background.