It was a close and nail-bitingly tense election but Barack Obama won over America once more to win the US presidential election last week. Now that the celebrations have died down and life returns to normal it is time for Obama to act upon the promises he made to his country. So what are the main challenges that Obama faces now that he is safely back in Office?
1) The Economy
One of Obama’s biggest problems is the weak economy. The US is still struggling against the worst economic climate since the Great Depression and whilst unemployment has fallen, it still remains at a high 7%. The debt crisis in Europe and the resulting impact on global trade, continuing troubles in the US real estate market, uncertainty about US government fiscal policy in the near term, and concern about political gridlock in Washington are all factors troubling the US economy. That said, economic forecasters have predicted a roaring economy is due to arrive but for now Obama still faces many challenges.
2) The Fiscal Cliff and Budget Deficit
On the 1st of January an immediate increase of taxes and government spending cuts will affect nearly every American and could devastate the weak economy – unless Congress takes action to head them off.
The so-called fiscal cliff was deliberately engineered in a 2011 compromise between Obama and Congress as an incentive for them to agree on a plan to reduce the US budget deficit over the long term. This combination of drastic spending cuts and tax rises could throw the fragile US economy back into recession: ‘That’s just simple macro economics…Whether you’re a conservative or a liberal, if you have a $500bn (£313bn) reduction in demand because of increased taxes and lower spending, you’re going off a cliff’ explains Peter Morici, an economist and professor of business at the University of Maryland. With the economy in a delicate state Obama needs to be careful to ensure that nothing tips it back into the recession that it is only starting to crawl out of.
3) Iran
Iran stands at the center of several US policy challenges: winding down US engagement in Afghanistan, ensuring stability in Iraq, promoting a resolution to the Israel/Palestine situation, fighting terrorism, ensuring open access to energy and preventing nuclear proliferation. Whilst Iran maintains that its nuclear programme is solely peaceful, the US remains determined to prevent Iran gaining a nuclear weapon. ‘The US and Iran are essentially in a state of cold war’ claims Karim Sadjadpour, an Iran analyst with the Carnegie Endowment for International Peace. Another factor Obama must consider is the threat of an Israeli military strike against Iran’s nuclear infrastructure – and an Iranian promise to retaliate.
4) Medicare
It is predicted that Medicare, the huge government healthcare programme for over-65s and disabled Americans, is to run out of money in 2024. It is currently suffering two pressing burdens – the ever increasing cost of an inefficient healthcare system and the imminent retirement of the baby-boom generation, more and more of whom are becoming eligible for benefits. Don Berwick, former administrator of the US Centers for Medicare and Medicaid Services, says the challenge is much more complicated than merely tweaking Medicare’s funding structure and that actually the entire healthcare system needs a complete overhaul: ‘Medicare’s symptoms – rising costs beyond what we can support as a country – are not Medicare symptoms, they’re healthcare symptoms’.
5) Working with Congress
Once again Obama is contending with a bitterly divided congress that has been stuck in parliamentary gridlock for the past four years. Most analysts predicted Congress would remain divided, with the Republicans in control of the House of Representatives and the Democrats maintaining a narrow majority in the Senate. Norman Ornstein, a prominent congressional scholar highlights the difficulties concerning the division within Congress: ‘There is no real prospect that this election is going to lance the boils, break the fever, bring us back to bipartisan policymaking…We’re in for a long slog.’
The re-elected President is sure to face a tough four years in Office. HCX wishes him congratulations on his win and good luck in facing these challenges throughout his term.
Images courtesy of eonline.com, slate.com, telegraph.co.uk