Obama will take office facing a host of tough challenges

McClatchy NewspapersNovember 4, 2008 

WASHINGTON — President-elect Barack Obama will face some of the most daunting challenges that any new president has confronted since at least 1981, when America tumbled into a severe recession with its prestige ebbing around the world.

He faces the immediate task of leading a nation that's reeling from its most serious economic downturn in a generation, one whose government is saddled with a federal deficit that's heading for $1 trillion this year.

He'll take the reins of a country with more than 183,000 of its sons and daughters fighting wars in Iraq and Afghanistan, conflicts that won't end simply because a new president wants to end them.

He also inherits a global war on terrorism against shadowy enemies who remain intent on doing America harm, not to mention hostile foreign capitals from Tehran to Moscow.

Yet Obama may be able to claim a mandate from the American people. He appeared poised to win by more than any Democrat since Lyndon B. Johnson in 1964. Like LBJ, Obama will take office with solid Democratic majorities in both houses of Congress.

Even so, he'll face significant political challenges in Washington. His victory will release “a lot of pent-up demand” among Democrats eager to see long-sought policies adopted, said Robert Loevy, a professor of political science at Colorado College.

Satisfying that demand won’t be easy. For one thing, 50 to 60 moderate to conservative “Blue Dog” Democrats in the House of Representatives are expected to continue their push for strict limits on spending. Combined with Republican opposition and still-powerful lobbies on behalf of the status quo, some Obama initiatives could be stymied.

New crises, both foreign and domestic, are also likely to pop up in this rapidly changing world. Times have changed dramatically since Labor Day.

The global financial crisis has greatly expanded Washington's role in the economy, even under a conservative Republican president. That lame-duck president will host a gathering of world leaders on Nov. 15 in Washington to discuss overhauling the architecture of global economic governance, another challenge that Obama will inherit.

Meanwhile, the U.S. economy shrank in the third quarter, the first contraction in seven years, and every sign suggests that it will worsen in coming months.

That may force Obama, like most new presidents, to trim his wish list in the face of changing circumstances. Presidents-elect often realize quickly that programs developed months before are now obsolete, said former Republican U.S. Rep. Bill Frenzel of Minnesota.

Yet the new, young president who ran on hope and a vision of change has some cards to play.

“There will be a honeymoon period. He’ll have 100 days, maybe as long as four to six months,” historian Robert Dallek said. “But that will all end pretty quickly if he doesn’t create some sense of forward motion,” for the nation and for himself.

The prognosis:

TAXES

The Bush administration’s key 2001 and 2003 income-tax cuts will expire on Jan. 1, 2011. Obama wants to end only the breaks that benefit individuals who earn more than $200,000 a year and families that earn more than $250,000.

He faces at least two hurdles: Most Republicans are dead set against his plan, and his proposed tax changes would cost the Treasury $2.95 trillion over 10 years, according to the nonpartisan Tax Policy Center. That may be unaffordable.

Still, his tax policy is too crucial a Democratic centerpiece to abandon, so look for it to be sold as a new economic stimulus, said Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, a nonpartisan research group.

“The game next year is, 'How much can you get done and call it "stimulus"?’ " she asked.

SPENDING

Obama has a long list of priorities he wants to spend more on, including $60 billion for highways and other projects over 10 years, more money for college student grants, elementary and secondary education and a host of alternative energy projects.

He vows that spending cuts would offset his increases, with some of the money coming from higher taxes on the wealthy and savings from Iraq troop withdrawals. But US Budget Watch, a nonpartisan group, estimated that Obama’s spending plans and tax reductions would add as much as $316 billion to the deficit in 2013 if they took full effect.

HEALTH CARE

History says that presidents typically get one big promise fulfilled during their honeymoon periods, and since Obama is expected to push an economic relief package, it’s unlikely that health-care revisions would move down a parallel track that fast.

Despite spiraling health costs and lots of campaign talk, he's likely to find that comprehensive change is too costly, too complicated and too dependent on a delicate consensus, one that would be hard to craft in a few months.

Many, however, expect at least small steps.

“You want to get a foot in the door,” said Dean Baker, the co-director of the Center for Economic Policy and Research, a liberal research group. For example, Obama could push for a mandate that all children be insured.

ENTITLEMENTS

Obama also faces the entitlements time bomb. Medicare faces insolvency by 2019, and Social Security will start costing more than it’s collecting in 2017. Left unchanged, the programs will require much higher taxes in the not-distant future. Changing them is extremely difficult politically, however, as seniors don't want their benefits cut and no one wants his taxes raised.

WARS

Obama wants to remove one to two combat brigades a month from Iraq, meaning that all combat troops would be out by the middle of 2010. He's been vague about how many troops would remain, however, and has said he'd deploy more forces to Afghanistan.

He faces a dilemma on Iraq. The public increasingly thinks that the war is going well, so tampering with current policy could be politically dangerous, said Michael Franc, an analyst at the Heritage Foundation, a conservative research center in Washington.

A dramatic change in policy, Franc said, would make it Obama’s war, “so he has to decide to what extent he wants to be seen as Bush 3.”

If violence expands as U.S. troops withdraw and chaos threatens, would Obama still leave Iraq and risk being blamed for its collapse? If he stayed to avoid such a result, would he forfeit the loyalty of the end-the-war voters who elected him?

FOREIGN CHALLENGES

Finally, experts said _ not to mention Vice President-elect Joe Biden _ the chances are good that Obama will be tested by a foreign crisis early in his presidency.

President Bush confronted China three months after he took office, when the Chinese captured the crew of a downed U.S. surveillance plane.

President Clinton suffered a setback in his first year when American troops were killed in Somalia.

In 1961, John F. Kennedy presided over the disastrous Bay of Pigs invasion of Cuba in his third month in office; met with Soviet leader Nikita Khrushchev two months later in Vienna, Austria, where he was shaken by his rival's belligerence; and two months later the Soviets built the Berlin Wall.

In 2009, Colorado College's Loevy said, Obama also could be tested quickly. “If he has a rough start it would be because of mostly economic events,” he said, “a series of worldwide economic events.”

There also could be security challenges.

Iran is eager to expand its influence throughout the Islamic world. North Korea's nuclear program remains problematic. The Israeli-Palestinian conflict has haunted every administration since Eisenhower's. China's growing global influence requires deft diplomacy, and Russia's summer invasion of Georgia reminds that Moscow can upset the geopolitical balance whenever Vladimir Putin sees an opening.

Obama will have his hands full. ON THE WEB

Barack Obama campaign-issue papers

Latest gross domestic product data

US Budget Watch analysis of Obama and McCain proposals

Tax Policy Center analysis of Obama and McCain tax plans

MORE FROM MCCLATCHY Complete McClatchy election coverage

In Birmingham, Obama's run is more than just politics

Here's a guide to how to watch tonight's election returns

Glitches, machine breakdowns hamper voting in five states

McClatchy’s complete election coverage President-elect Barack Obama will face some of the most daunting challenges that any new president has confronted since at least 1981, when America tumbled into a severe recession with its prestige ebbing around the world.

He faces the immediate task of leading a nation that's reeling from its most serious economic downturn in a generation, one whose government is saddled with a federal deficit that's heading for $1 trillion this year.

He'll take the reins of a country with more than 183,000 of its sons and daughters fighting wars in Iraq and Afghanistan, conflicts that won't end simply because a new president wants to end them.

He also inherits a global war on terrorism against shadowy enemies who remain intent on doing America harm, not to mention hostile foreign capitals from Tehran to Moscow.

Yet Obama may be able to claim a mandate from the American people. He appeared poised to win by more than any Democrat since Lyndon B. Johnson in 1964. Like LBJ, Obama will take office with solid Democratic majorities in both houses of Congress.

Even so, he'll face significant political challenges in Washington. His victory will release “a lot of pent-up demand” among Democrats eager to see long-sought policies adopted, said Robert Loevy, a professor of political science at Colorado College.

Satisfying that demand won’t be easy. For one thing, 50 to 60 moderate to conservative “Blue Dog” Democrats in the House of Representatives are expected to continue their push for strict limits on spending. Combined with Republican opposition and still-powerful lobbies on behalf of the status quo, some Obama initiatives could be stymied.

New crises, both foreign and domestic, are also likely to pop up in this rapidly changing world. Times have changed dramatically since Labor Day.

The global financial crisis has greatly expanded Washington's role in the economy, even under a conservative Republican president. That lame-duck president will host a gathering of world leaders on Nov. 15 in Washington to discuss overhauling the architecture of global economic governance, another challenge that Obama will inherit.

Meanwhile, the U.S. economy shrank in the third quarter, the first contraction in seven years, and every sign suggests that it will worsen in coming months.

That may force Obama, like most new presidents, to trim his wish list in the face of changing circumstances. Presidents-elect often realize quickly that programs developed months before are now obsolete, said former Republican U.S. Rep. Bill Frenzel of Minnesota.

Yet the new, young president who ran on hope and a vision of change has some cards to play.

"There will be a honeymoon period. He’ll have 100 days, maybe as long as four to six months,” historian Robert Dallek said. “But that will all end pretty quickly if he doesn’t create some sense of forward motion,” for the nation and for himself.

The prognosis:

TAXES

The Bush administration’s key 2001 and 2003 income-tax cuts will expire on Jan. 1, 2011. Obama wants to end only the breaks that benefit individuals who earn more than $200,000 a year and families that earn more than $250,000.

He faces at least two hurdles: Most Republicans are dead set against his plan, and his proposed tax changes would cost the Treasury $2.95 trillion over 10 years, according to the nonpartisan Tax Policy Center. That may be unaffordable.

Still, his tax policy is too crucial a Democratic centerpiece to abandon, so look for it to be sold as a new economic stimulus, said Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, a nonpartisan research group.

"The game next year is, 'How much can you get done and call it "stimulus"?’ " she asked.

SPENDING

Obama has a long list of priorities he wants to spend more on, including $60 billion for highways and other projects over 10 years, more money for college student grants, elementary and secondary education and a host of alternative energy projects.

He vows that spending cuts would offset his increases, with some of the money coming from higher taxes on the wealthy and savings from Iraq troop withdrawals. But US Budget Watch, a nonpartisan group, estimated that Obama’s spending plans and tax reductions would add as much as $316 billion to the deficit in 2013 if they took full effect.

HEALTH CARE

History says that presidents typically get one big promise fulfilled during their honeymoon periods, and since Obama is expected to push an economic relief package, it’s unlikely that health-care revisions would move down a parallel track that fast.

Despite spiraling health costs and lots of campaign talk, he's likely to find that comprehensive change is too costly, too complicated and too dependent on a delicate consensus, one that would be hard to craft in a few months.

Many, however, expect at least small steps.

"You want to get a foot in the door," said Dean Baker, the co-director of the Center for Economic Policy and Research, a liberal research group. For example, Obama could push for a mandate that all children be insured.

ENTITLEMENTS

Obama also faces the entitlements time bomb. Medicare faces insolvency by 2019, and Social Security will start costing more than it’s collecting in 2017. Left unchanged, the programs will require much higher taxes in the not-distant future. Changing them is extremely difficult politically, however, as seniors don't want their benefits cut and no one wants his taxes raised.

WARS

Obama wants to remove one to two combat brigades a month from Iraq, meaning that all combat troops would be out by the middle of 2010. He's been vague about how many troops would remain, however, and has said he'd deploy more forces to Afghanistan.

He faces a dilemma on Iraq. The public increasingly thinks that the war is going well, so tampering with current policy could be politically dangerous, said Michael Franc, an analyst at the Heritage Foundation, a conservative research center in Washington.

A dramatic change in policy, Franc said, would make it Obama’s war, “so he has to decide to what extent he wants to be seen as Bush 3.”

If violence expands as U.S. troops withdraw and chaos threatens, would Obama still leave Iraq and risk being blamed for its collapse? If he stayed to avoid such a result, would he forfeit the loyalty of the end-the-war voters who elected him?

FOREIGN CHALLENGES

Finally, experts said _ not to mention Vice President-elect Joe Biden _ the chances are good that Obama will be tested by a foreign crisis early in his presidency.

President Bush confronted China three months after he took office, when the Chinese captured the crew of a downed U.S. surveillance plane. President Clinton suffered a setback in his first year when American troops were killed in Somalia.

In 1961, John F. Kennedy presided over the disastrous Bay of Pigs invasion of Cuba in his third month in office; met with Soviet leader Nikita Khrushchev two months later in Vienna, Austria, where he was shaken by his rival's belligerence; and two months later the Soviets built the Berlin Wall.

In 2009, Colorado College's Loevy said, Obama also could be tested quickly. “If he has a rough start it would be because of mostly economic events,” he said, “a series of worldwide economic events.”

There also could be security challenges.

Iran is eager to expand its influence throughout the Islamic world. North Korea's nuclear program remains problematic. The Israeli-Palestinian conflict has haunted every administration since Eisenhower's. China's growing global influence requires deft diplomacy, and Russia's summer invasion of Georgia reminds that Moscow can upset the geopolitical balance whenever Vladimir Putin sees an opening.

Obama will have his hands full. ON THE WEB

Barack Obama campaign-issue papers

Latest gross domestic product data

US Budget Watch analysis of Obama and McCain proposals

Tax Policy Center analysis of Obama and McCain tax plans

MORE FROM MCCLATCHY

Complete McClatchy election coverage

In Birmingham, Obama's run is more than just politics

Here's a guide to how to watch tonight's election returns

Glitches, machine breakdowns hamper voting in five states

McClatchy’s complete election coverage

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