Obama’s 5 Biggest Challenges

The Economy 

The last few years have proved to be the worst economic downturn since the Great Depression. Although unemployment has fallen, it has been minimal with latest figures showing it stands at 7.9%. Economic growth remains just as bad at 2% meaning that people are not spending and jobs are not available. The economy of the USA is very fragile and would not take much for the economy to crash again into another recession. Issues that could cause this include the debt crisis in Europe which has severely impacted the free flow of global trade. Other issues include gridlock in Congress and the fiscal cliff. Although there has been slight recent improvements in the economy, there is still a long way to go.

The Fiscal Cliff And The Budget Deficit 

The Fiscal Cliff was a series of tax increases and spending cuts that would effect virtually every American and could potential cripple the already weak economy. The idea was that the Democrats and Republicans would act to prevent cuts to defence and social programmes dear to either side, as well as the expiration of a temporary payroll tax cut and the low tax rates dating back to the George W Bush presidency. The proposals are so drastic that they could throw the economy into a deep recession.



With the situation in Iraq and Afghanistan winding down, America is keen to prevent Iran from getting hold of nuclear weapons even though they have stated that their nuclear programme is peaceful. At present, US and Iran are in a sort of Cold War with tensions building between the two nations. Another factor Mr Obama must consider is the threat of an Israeli military strike against Iran’s nuclear infrastructure – and an Iranian promise to retaliate.

The Cost of Medicare 

There are two main burdens that are causing medicare to run out of money at an ever growing rate: the ever-growing 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. It is predicted that the programme will run out of money by 2024 even though many feel the programmes is unnecessary.

Working With Congress

There is a lot of parliamentary gridlock within Congress due to it being bitterly divided since the 2010 mid-term elections. As a result, the Democrats have struggled to pass any legislation which is mildly controversial, except renaming a post office. The willingness of the Republicans to compromise is slim and getting legislation passed in Obama’s second term will be a struggle.
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Digestible Politics