“The parties are as badly polarized and divided from one another as they have been for more than 100 years,” said William Galston, a former adviser to President Bill Clinton and a scholar at the Brookings Institution. “Something between leadership and statesmanship is going to be required.”
Even before Inauguration Day, Obama will be under enormous pressure to ward off looming tax increases and spending cuts that threaten to throw the nation into another recession.
Here’s what Obama will confront:
SPENDING CUTS: A series of spending cuts are slated to take effect Jan. 2 as the result of a bipartisan deal struck last year to raise the nation’s debt ceiling.
The first $110 million would kick in before a new Congress and president are sworn into office. Republicans and Democrats acknowledge that the cuts would be devastating, but they haven’t been able to agree on what to do about them. Obama want some cuts combined with higher taxes on the wealthy. House Republicans oppose tax increases.
TAXES: Nearly every tax cut enacted in the last decade will expire at the end of the year. The $500 billion tax increase paid by Americans at all income levels would leave the average household paying $3,500 more, according to nonpartisan estimates.
Obama wants to extend all the tax cuts on individual incomes below $200,000 and household below $250,000 – and to let them expire for all incomes above that.
Republicans want to extend all the tax cuts – enacted under President George W. Bush and extended by Obama – through at least 2013.
ENTITLEMENTS: The nation’s Social Security and Medicare programs are running out of money. Obama has said he’s open to “modest modifications” to the programs, but he’s not proposed a plan for long-term solvency for either. Meanwhile, some Republicans on Capitol Hill want to allow retirees to get a fixed annual payment from the government that they could use to buy traditional Medicare coverage or a private health insurance policy.
SYRIA: Washington is facing increasing pressure to play a bigger role in Syria’s ongoing civil war. Obama has called for President Bashar Assad’s ouster but has ruled out military intervention in the country. Analysts say that leaves the U.S. with limited options but considerable pressure to force Assad out – or the U.S. could to left with weakened influence in the oil-rich region.
IRAN: The country’s quest for a nuclear weapon is likely to occupy much of Obama’s foreign agenda as the U.S. tries a combination of economic sanctions, diplomacy and warnings. Obama has said economic sanctions are having an impact. He’s said he reserves the right to use force as last resort to stop Iran, but he believes there is still time for diplomacy and sanctions.
ARAB SPRING: As in Libya, the tumult in the Muslim countries is likely to continue and experts say U.S. influence may be limited. Obama has said the U.S. should support the growth of new democracies while ensuring support for American counterterrorism efforts, making sure that Israel is protected, pushing for the protection of “religious minorities and women” and helping “the economic capabilities” of those nations.