On Obama's agenda: maintain momentum and parry GOP jabs at 'ObamaCare'

Obama achieved several legislative victories just before going on vacation. But with a GOP-led House vowing to target 'ObamaCare' and government spending, difficult battles await.

President Obama had the same spring in his step when he stepped off Air Force One Tuesday that he had when he left before Christmas. His Gallup job approval has just reached 50 percent for the first time in eight months, following a burst of legislative victories in the waning moments of the last Congress.

But it’s a new year, and a new day, in Washington. Divided government is back, with Republicans taking charge of the House Wednesday. Can Mr. Obama, fresh from his Hawaiian vacation, maintain his momentum?

On the face of it, the president will have difficulty. Suddenly, he must play defense. The Republicans are gunning to repeal health-care reform, Obama’s signature legislative accomplishment, with a House vote scheduled for Jan. 12. The still-Democratic-controlled Senate won’t pass it, and Obama wouldn’t sign it anyway, but the symbolic import of the House’s expected passage of repeal is lost on no one. The challenge for Obama and his fellow Democrats will be to win a message war with the Republicans, highlighting elements of health-care reform that are popular even as the overall law remains unpopular.

Obama also faces pressure from the incoming chairman of the House Oversight and Government Reform Committee, Rep. Darrell Issa (R) of California, who plans to investigate what he calls the “corruption” of the Obama administration. His top targets include Fannie Mae and Freddie Mac, WikiLeaks, and the Food and Drug Administration. And he has been highly critical of Attorney General Eric Holder.

There will be politics

The president took the high road Monday night when asked by reporters aboard Air Force One if he expects a chilly reception from Republicans, particularly on health care, upon his return to Washington.

“I think that there’s going to be politics; that’s what happens in Washington,” Obama said in a rare visit to the press cabin on his official plane. “They are going to play to their base for a certain period of time. But I’m pretty confident that they’re going to recognize that our job is to govern and make sure that we are delivering jobs for the American people and that we are creating a competitive economy for the 21^st century – not just for this generation but for the next one.

“And so my expectation, my hope is that [incoming House Speaker] John Boehner and [Senate minority leader] Mitch McConnell will realize that there will be plenty of time to campaign for 2012 in 2012,” the president continued. “And that our job this year is to make sure that we build on the recovery. We started making good progress on that during the lame-duck [Congress], and I expect to build on that progress when I get back.”

Republicans say that killing “ObamaCare” is precisely in line with the goal of job creation and economic recovery.

“ObamaCare is a job killer for businesses small and large, and the top priority for House Republicans is going to be to cut spending and grow the economy and jobs," said Brad Dayspring, spokesman for Republican majority leader-elect Eric Cantor, in a statement Monday.

Short of killing health-care reform altogether, Republicans also aim to defund its implementation. They are also looking to court challenges to the requirement that individuals purchase insurance as another avenue toward dismantling the reform.

Another looming challenge for Obama is the federal debt ceiling, which needs to be raised by Congress in order to avoid a potentially catastrophic default on government obligations. Conservatives are threatening to vote against raising the ceiling, in the name of fiscal responsibility, but are also suggesting possible deals to cut spending in exchange for their support. The Republicans want to cut federal spending to 2008 levels, a move that would cut deeply into government programs.

Obama has already suggested he will make deficit reduction a central theme of his forthcoming State of the Union address, and it’s possible changes to entitlement programs could be on the table. That, plus the possibility of a deal involving spending cuts to keep the government out of default, makes liberal Democrats nervous – especially after Obama’s concession last month that extended Bush-era tax cuts for the wealthiest taxpayers.

New White House team

All the jockeying in advance of the 112^th Congress is playing out against a backdrop of a White House still settling on its team for the next two years. Reports indicate former top adviser to President Clinton and former Commerce secretary, William Daley, is on the short list to become the new chief of staff. If that comes to pass, Obama would have an experienced Washington hand at his side who can pick up where departed chief of staff Rahm Emanuel left off. The interim chief of staff, Pete Rouse, is also in the running for the permanent appointment, but he is averse to interviews, and Obama may opt for someone who is willing to appear on television and make the administration’s case on issues of the day.

The selection of Mr. Daley, brother of the outgoing mayor of Chicago, Richard Daley, would bring another Chicagoan into the White House. That would feed the narrative of a “Chicago machine” at 1600 Pennsylvania Avenue, a common Republican refrain. Daley also would bring business ties to the White House, as an executive at JP Morgan Chase, which could help Obama’s efforts at healing a rift with the business community. But with Obama’s liberal base, Daley would probably not be so popular. In a Washington Post op-ed last year, Daley urged Obama to move to the political center.

Obama also needs to replace his top economic adviser, Larry Summers, who has returned to Harvard. Gene Sperling, another Clinton administration alumnus with ties to the business world, is considered a top possibility. So is Roger Altman, also a Clinton alum, who is chairman and CEO of Evercore Partners investment bank.