Obama has given up on nuclear talks with Iran US President Barack Obama faces a long list of challenges as he returns from his Hawaiian holiday and begins the new year. Here are some questions and answers about Obama's agenda as he nears the end of his first year in office. What is Obama's most pressing challenge? Obama's top priority is to cut 26-year high unemployment. He is expected to push hard on this in January, after a jobs summit and banker meetings in December. Growth resumed in the third quarter after the worst recession in 70 years, but job creation has lagged, hurting his popularity and dimming the prospects for his Democratic Party, which faces midterm congressional elections in November. On top of a $787 billion emergency spending bill Obama signed in February, the House of Representatives approved a $155 billion jobs bill on Dec. 16, which the Senate is expected to consider in early 2010. The US Treasury says it will ask Congress to ease restrictions on a bank bailout fund called the Troubled Asset Relief Program, or TARP, to free around $30 billion to help the flow of credit to small businesses to encourage them to hire. What is happening with health care reform? Obama received a big present on Christmas Eve when the Senate passed its version of health care reform, his top legislative priority. The measure passed with no Republican support after the House version passed on Nov. 7 with just one Republican in favor. Months of political wrangling over health care cost Obama support from moderates and independents wary of the price of overhauling the $2.5 trillion industry. Obama's fellow Democrats face tough negotiations in January to reconcile the House and Senate bills, which have significant differences on issues such as taxes, abortion and whether to have a government-run insurance plan. Republicans are determined to do everything they can to prevent Obama from signing historic healthcare legislation in 2010, hoping to deny the president and his Democratic colleagues a political victory ahead of the November congressional elections. Will the Detroit plane incident change things? Homeland security made an unwelcome push toward the top of Obama's agenda on Dec. 25, when an airline passenger tried to blow up a Detroit-bound flight with a bomb concealed in his underwear. A 23-year-old Nigerian man has been charged in the incident. The attempted bombing posed the biggest national security test for Obama since taking office and left officials scrambling to explain how the suspect made it on to the plane after his father warned US officials about his radicalism. The White House's response was slammed by Republicans and some in the media as inadequate. Republicans were quick to accuse Obama and Democrats of being soft on security. Obama has criticized missteps by intelligence agencies and ordered a review of how they share information. Will Obama still lean on big banks? Obama's plan to overhaul US financial regulation is inching forward but will not yield a bill for him to sign until late spring. The House approved on Dec. 11 its version of legislation to tighten rules to prevent a repeat of the 2008 financial market meltdown. But the Senate Banking Committee is still debating the issue. Obama in June proposed granting the Federal Reserve new powers to monitor big financial firms that could pose a “systemic risk” to the economy, while creating a new consumer protection agency for financial products. But many provisions are controversial and may be reshaped by Congress. Will there be any advance on climate? After helping to broker a non-binding agreement in December among United Nations countries to curb greenhouse gas emissions, Obama must now turn to the Senate to push through a domestic law to cut carbon pollution at home. The House already passed a bill to reduce emissions 17 percent by 2020 compared to 2005 levels, but a similar initiative in the Senate has stalled. His efforts face opposition from many Republicans and lawmakers from states that produce coal and oil. As he works to battle high unemployment, opponents of a law argue it would hurt the economy and cost the United States jobs. Obama's stewardship of the issue, expected to be a priority after healthcare reform is complete, will help determine whether a binding UN climate pact can be reached in 2010 after the December Copenhagen talks fell short. What about the wars? AFGHANISTAN: With violence in Afghanistan at its highest level in years, Obama in December ordered 30,000 more US troops to the war zone to break the momentum of a resurgent Taliban. The reinforcements will bring the total number of US soldiers in Afghanistan to about 100,000. Obama's decision was complicated by flagging faith in President Hamid Karzai, whose August election victory was marred by fraud. The troop increase is also proving a tough sell – with the United States struggling with record budget deficits and high unemployment, the public is wary of spending tens of billions more dollars on the war. Many Democrats also worry it could hurt them in the November election. Obama hopes to begin bringing troops home in July 2011, but senior aides have already cautioned that this will be dependent on conditions on the ground. IRAQ: Obama has declared that the Iraq war will end for the United States by the end of 2011, when remaining US troops will withdraw. But a surge in bomb attacks that have killed hundreds of Iraqis and targeted government ministries has raised questions about Iraq's ability to combat Al-Qaeda and other militants before elections due in March. Obama is banking on saving billions of dollars from winding down US operations in Iraq to help cut a record budget deficit and subsidize the Afghan surge. How will Obama tackle Iran? The Obama administration has given up on Iran responding to the UN-brokered nuclear enrichment deal by a Dec. 31 deadline and is talking to European allies, Russia and China about imposing tougher sanctions in the new year. But with Iran gripped by violence as the government cracks down on opposition protests, Washington is proceeding cautiously, reluctant to impose wide-ranging sanctions that could hurt the Iranian people and undermine the opposition. Don't expect to see dramatic action come Jan. 1. The UN Security Council is not expected to begin discussions on sanctions until mid-January at the earliest. The United States must still persuade Russia and China, veto-wielding allies of Iran, to back any new measure, a process that could take months.
