Following weeks of partisan bickering, a limited deal that enables the United States to climb back up the "fiscal cliff" has been belatedly approved by Congress. The manoeuvring follows intense last-minute negotiations between Vice-President Joe Biden and Mitch McConnell, the top Republican in the US Senate.
The legislative agreement rolls back many of the US tax rises, and delays cuts to US government agencies and departments such as the Pentagon, scheduled to take effect from this week. It is a partial victory for President Barack Obama, but the tortuous nature of the negotiations has served him an early warning that, despite his re-election victory in November, political polarisation and deadlock in Washington look set to intensify during his second term.
To be sure, Obama will still achieve some further domestic policy success in the next four years, but the chances of securing a series of major legislative victories are not strong. Republicans (including the sizeable Tea Party caucus), who were so at odds with the President's first-term agenda, maintain their firm grip on the House of Representatives, and hold a sizeable minority in the Senate. Obama's opponents in Congress are keenly aware that his narrower margin of victory in November than in 2008 equates to a more fragile electoral mandate.
The fact that Obama's second term will probably not be a highly productive one for domestic policy is not unusual for re-elected incumbents. During their first four years in the White House, Presidents usually succeed in enacting several core priorities (in Obama's case, including healthcare reform, and the 2009 fiscal stimulus bill), while key items that fail to secure a critical mass of support are rarely resurrected.
There are several reasons why Presidents find it difficult to secure legislative approval for significant new measures in second terms. The party that controls the White House, as with Democrats now, often holds a weaker position in Congress in second presidential terms. Thus Dwight Eisenhower in 1956, Richard Nixon in 1972, and Bill Clinton in 1996 were all re-elected alongside Congresses in which both the House and Senate were controlled by their political opponents.
The productiveness of second terms can also be stymied by turnover of senior personnel. For instance, several members of the Cabinet, including Treasury Secretary Tim Geithner, Environmental Protection Agency Administrator Lisa Jackson, and Secretary of State Hillary Clinton have said they are departing. The problem for Obama is that it is not always easy to recruit figures of the same status and calibre as those who leave, and, even when this happens, new staff can take considerable time to hit the ground running, and, where necessary, be confirmed by Congress.
Re-elected Administrations in recent decades have often been affected by scandals (although the events that trigger the scandals can happen during first terms). Watergate ended the Nixon Administration in 1974, Iran-Contra badly damaged the Reagan presidency and the Lewinsky scandal led to Bill Clinton's impeachment in 1998.
It remains to be seen if any major scandals will affect the Obama Administration. But some Republicans in Congress are pressuring Obama on what they see as his team's "cover-up" of events surrounding the killing of four US citizens, including the US ambassador, in Libya in September.
Even if Obama and his Administration escape scandal, he will not be able to avoid the "lame-duck" factor. As Presidents cannot seek more than two terms, the political focus will inevitably be beyond them, particularly after the 2014 congressional elections when the 2016 presidential campaign starts. This overall domestic policy context means Obama, like other second-term Presidents in the post-war era, is likely to increasingly turn his focus towards foreign policy. This is especially likely if the US economic recovery builds up pace in coming months.
Foreign policy could become an especially strong point of focus for the President after the Israeli election on January 22 if Benjamin Netanyahu is re-elected Prime Minister and ups the ante with Iran over its nuclear programme. A missile strike by Tel Aviv, with or without the support of Washington, is a real possibility. This issue thus has potential to pose major headaches for Obama, and will require skilled statesmanship, especially given his strained relationship with Netanyahu.
The probable emphasis by Obama on foreign policy will be reinforced by a desire to establish a significant legacy. Previous re-elected Presidents have often seen international initiatives as key to the legacy they wish to build, including Clinton, who tried to secure a Palestinian-Israeli peace deal.
Almost two decades later, with a significant breakthrough between the Israelis and Palestinians still log-jammed, other areas of the world are potentially more important to any Obama legacy. In particular, following withdrawal of US troops from Iraq, and the intended reduction in Afghanistan, the President is continuing his post-9/11 re-orientation of policy towards Asia-Pacific. This was symbolised, within days of his re-election, by his trip to Burma, Cambodia and Thailand.
Threats on the horizon to securing this re-direction of policy include the possibility of further terrorist attacks on the US homeland from al-Qaeda, and a major upsurge of tension in the Middle East, perhaps emanating from Israeli-Iranian conflict, or the implosion of Syria.
However, should any of these scenarios arise, it will only reinforce Obama's broader focus on foreign policy in coming years.
Andrew Hammond is an associate partner at ReputationInc. He is a former United States editor at Oxford Analytica, and special adviser in the Government of Tony Blair.