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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.

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“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.

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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 112th 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.

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