US President Barack Obama celebrates after his victory
speech on election night in Chicago. Photo by Reuters
Fresh from a decisive re-election win, President Barack
Obama returns from the campaign trail with little time to
savour victory, facing urgent economic challenges, a looming
fiscal showdown and a still-divided Congress able to block his
Obama defeated Republican challenger Mitt Romney on Tuesday
night (local time) in a gruelling presidential race and used
his acceptance speech in front of a huge cheering crowd in
Chicago to strike a conciliatory note toward his political
But in the cold light of the 2012 election's morning-after,
it was clear that even though voters have endorsed a second
Obama term, the president will have a hard time translating
that into a mandate to push forward with his agenda.
His most immediate concern is confronting a "fiscal cliff" of
automatic tax increases and spending cuts that could crush
the US economy recovery - a prospect that weighed heavily on
global financial markets on Wednesday and sent Wall Street
stocks into a post-election swoon.
Voters chose to preserve the status quo of divided government
in Washington. Obama's fellow Democrats retained control of
the Senate and Republicans kept their majority in the House
of Representatives, giving them power to curb the president's
legislative ambitions on everything from taxes to immigration
This is the political reality that Obama - who won a far
narrower victory over Romney than his historic election as
the country's first black president in 2008 - faces when he
returns to Washington later on Wednesday.
But that did not stop him from basking in the glow of
re-election together with thousands of elated supporters in
his hometown of Chicago early on Wednesday.
"You voted for action, not politics as usual," Obama said,
calling for compromise and pledging to work with leaders of
both parties to reduce the deficit, to reform the tax code
and immigration laws, and to cut dependence on foreign oil.
Obama told the crowd he hoped to sit down with Romney in the
coming weeks and examine ways to meet the challenges ahead -
though the president may be more in need of mending fences
with Republican congressional leaders who wield clout in
The problems that dogged Obama in his first term, which cast
a long shadow over his 2008 campaign message of hope and
change, still confront him. He must tackle the $1 trillion
annual deficits, rein in the $16 trillion national debt,
overhaul expensive social programs and deal with the split
The most urgent focus for Obama and US lawmakers will be to
deal with the "fiscal cliff," a mix of tax increases and
spending cuts due to extract some $600 billion from the
economy at the end of the year, barring a deal with Congress.
Ec o nomists warn it could push the United States back into
House Majority Leader John Boehner moved swiftly on the
fiscal cliff issue, saying he would issue a statement on it
on Wednesday, citing "the need for both parties to find
common ground and take steps together to help our economy
grow and create jobs, which is critical to solving our debt."
Post-election concern about festering US fiscal problems
contributed to a fall in global financial markets as jittery
investors scrambled for less-risky assets. All three major US
stock indexes were down more than 2 percent in late morning,
with the Dow Jones industrial average down nearly 300 points.
Eurozone debt worries were also a factor in the market
Obama is expected to make a push for a bipartisan solution to
the emerging fiscal crisis in coming days, but Boehner has
made it clear he intends to stand firm against any income tax
increases on wealthier Americans, which Obama has demanded.
Obama also faces international challenges like the West's
nuclear standoff with Iran, the civil war in Syria, the
winding down of the war in Afghanistan and dealing with an
increasingly assertive China.
COMFORTABLE WIN IN ELECTORAL COLLEGE
Romney, a multimillionaire former private equity executive,
came back from a series of campaign stumbles to fight a close
battle after besting Obama in the first of three presidential
But the former Massachusetts governor failed to convince
voters of his argument that his business experience made him
the best candidate to repair a weak US economy.
The nationwide popular vote remained extremely close with
Obama taking about 50 percent to 49 percent for Romney after
a campaign in which the candidates and their party allies
spent a combined $2 billion. But in the state-by-state system
of electoral votes that decides the White House, Obama
notched up a comfortable victory.
By early on Wednesday, Obama had 303 electoral votes, well
over the 270 needed to win, to Romney's 206. Florida's close
race was not yet declared, leaving its 29 electoral votes
still to be claimed.
Romney, 65, conceded in a speech delivered to disappointed
supporters at the Boston convention center. "This is a time
of great challenge for our nation," he told the crowd. "I
pray that the president will be successful in guiding our
He warned against partisan bickering and urged politicians on
both sides to "put the people before the politics."
The Republican Party, after losing two presidential contests,
is now likely to go through a period of painful
soul-searching, especially over how it has alienated Hispanic
voters, an important constituency in Obama's victory.
"The fact is Republicans are going to have to do a lot of
rethinking at the presidential level," Newt Gingrich, a
former House speaker who lost the Republican nominating race
to Romney, told CBS's "This Morning" program.
'FAILURES OR EXCESSES'
In the election aftermath, there were indications that
partisan gridlock would persist in Washington.
Senate Republican leader Mitch McConnell gave no sign that he
was willing to concede his conservative principles, signaling
potential confrontations ahead.
"The voters have not endorsed the failures or excesses of the
president's first term, they have simply given him more time
to finish the job they asked him to do together with a
Congress that restored balance to Washington after two years
of one-party control," McConnell said.
Obama's win puts to rest the prospect of wholesale repeal of
his 2010 healthcare reform law, which aims to widen the
availability of health insurance coverage to Americans, but
it still leaves questions about how much of his signature
domestic policy achievement will be implemented.
Obama, who took office in 2009 as the ravages of the
financial crisis were hitting the US economy, must continue
his efforts to ignite strong growth and recover from the
worst downturn since the Great Depression of the 1930s. An
uneven recovery has been showing some signs of strength but
the country's jobless rate, currently at 7.9 percent, remains
Obama's re-election puts him in the company of three of his
past four predecessors whom voters granted a second term. He
now faces the task of reshuffling his cabinet. Treasury
Secretary Timothy Geithner and Secretary of State Hillary
Clinton plan to step down soon.
Democrats widened their control of the 100-member Senate by
one, seizing Republican-held seats in Massachusetts, Indiana,
and Montana, and retaining most of those they already had,
including in Virginia and Missouri. The Republican majority
in the 435-member House means that Congress still faces a
deep partisan divide.
"That means the same dynamic. That means the same people who
couldn't figure out how to cut deals for the past three
years," said Ethan Siegel, an analyst who tracks Washington
politics for institutional investors.
International leaders offered their congratulations. Israeli
Prime Minister Benjamin Netanyahu, who has had a testy
relationship with the US leader, vowed to work with Obama "to
ensure the interests that are vital for the security of
British Prime Minister David Cameron said Britain and the
United States should make finding a way to solve the Syrian
crisis a priority following Obama's re-election.
Russian President Vladimir Putin welcomed Obama's re-election
and hoped it would have a positive impact on US ties.
In the Middle East, where the Obama administration has taken
a cautious approach to while the Arab Spring has shaken the
region, Obama's win was met with more of a sense of relief
than happiness. A tweet from one of Saudi Arabia's most
influential clerics summed up the Middle East's response.
"Obama isn't good," tweeted Salman al-Oudah, "But he is the