Vacation Over, Obama Set to Face Emboldened GOP

Associated Press + More

HONOLULU — After two weeks out of the spotlight, President Barack Obama is returning to Washington to face an emboldened Republican Party and the first major shake-up of his senior staff.

The first weeks of the new year will be an early test of how the president will deal with a divided Congress and whether he can build on the victories he secured during the final days of the lame-duck legislative session. And with a host of Republicans readying to run for his job, the administration will simultaneously be laying the groundwork for Obama's re-election bid, which will be operated out of Chicago. [Read more about the 2012 presidential election.]

Senior adviser David Axelrod plans to head to Chicago this month, with Obama's 2008 campaign manager, David Plouffe, taking his place at the White House. More staff will follow Axelrod to Chicago, though aides have not yet been asked to commit to making the move.

Obama is also considering naming former Commerce Secretary William Daley to a top White House job, possibly chief of staff, a person familiar with the matter said Monday. Daley, an executive at JPMorgan Chase, would bring extensive private sector experience to a White House seeking to counter the notion that the president is antibusiness.

The person was not authorized to speak publicly on the manner and requested anonymity.

After making only a few brief public appearances during his nearly two week family vacation, Obama eased back into the public eye on his final day in Hawaii. After an afternoon at the beach, Obama treated his friends and family to shave ice, a Hawaiian snow cone, stopping to shake hands and talk with people who had gathered near the Island Snow store that is a favorite of the Obamas. He also joined his family for an evening trip to the Honolulu Zoo. [See photos of the Obamas behind the scenes.]

The president was to arrive back in Washington before midday Tuesday, a day before lawmakers on Capitol Hill reconvene. Republicans, having taken control of the House and boosted their seats in the Senate, are promising to take aim at the president's agenda, from his spending plans to his health care overhaul. And they're not wasting any time.

Republicans in the House are planning to vote on a full repeal of Obama's health care law before the president's State of the Union address later this month. However, Democrats will control the Senate and could thwart the repeal drive. And Obama has promised to veto a repeal if it reaches his desk. Even so, Republicans say they will try to starve the overhaul of money and dismantle it piece by piece. [See photos of healthcare reform protests.]

Obama will also face opposition on spending and the debt. Though the president has said the nation's long-term fiscal health must be addressed, he's warned that cutting spending now could be disastrous for the fragile economic recovery.

But conservative Republicans, including many newly elected members of Congress, want to cut spending immediately. The first test of how much Obama is willing to compromise with this wing of the GOP comes in February, when lawmakers have to pass a massive spending bill to keep the government running.

"You know, I think there's going to be politics. That's what happens in Washington. 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," Obama said to reporters traveling back to the capital with him on Air Force One.

Another critical juncture could come as early as March, when lawmakers vote on whether to raise the debt ceiling. Some GOP lawmakers, including South Carolina Sen. Lindsey Graham, have said they won't vote to raise the debt limit unless there is a plan in place for dealing with long-term obligations, including Social Security, and for returning to 2008 spending levels.

With the debt ceiling at $14.3 trillion, and the debt at nearly $13.9 trillion and growing daily, White House economist Austan Goolsbee said that refusing to raise the limit would have a "catastrophic" impact on the economy. [Read more about the deficit and national debt.]