Analysis: Obama pivots to new string of problems (AP)

WASHINGTON – President Barack Obama dodged a debt-ceiling fiasco Tuesday. He reacted with a wiped brow more than a victory lap, and with good reason.

As Republicans gradually weigh a potential challenger, Obama’s re-election bid faces daunting problems: high unemployment, a limping economy, lackluster approval ratings and a demoralized liberal base. The last-minute debt agreement prevented a full-blown disaster. But it might do little or nothing to help Obama’s campaign.

It cuts spending that might otherwise have produced jobs. And for now, at least, it keeps Obama from claiming he tackled long-festering problems such as Medicare, Social Security and a revenue base that consistently lags behind the nation’s spending habits.

Obama has considerable political assets, including robust fundraising and an up-and-running nationwide operation. Also, the Republican primary process is murky, and it’s too soon to gauge whether it will produce a top-notch nominee who can match Obama’s proven campaign skills.

But job worries are dominating this election, and economists see little likelihood of a serious recovery before the November 2012 election. The man who ran on hope and change in 2008 is hoping voters will decide against change this time, fearing the GOP nominee would be worse.

Obama seems well aware of his challenges. In

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Analysis: Debt deal takes minor swipe at red ink (AP)

WASHINGTON – The debt limit compromise may have resolved this year’s most clamorous political battle between President Barack Obama and Congress, but it takes only a modest swipe at the heart of the matter: the government’s relentlessly huge budget deficits.

The legislation, which Obama signed into law Tuesday shortly after Congress voted its approval, would save at least $2.1 trillion over the coming decade, according to the nonpartisan Congressional Budget Office, which tallies the price tags of bills for lawmakers. That’s real money, even by Washington standards.

But it’s just a slice of the nearly $7 trillion in red ink expected over the next 10 years — an amount that could grow by trillions more if tax cuts enacted under President George W. Bush are extended beyond their scheduled expiration in 2013.

The debt limit package makes no sea changes that could set the budget on course for better days. It offers little prospect for stemming the growth of Social Security, Medicare and Medicaid — the huge benefit programs that analysts agree are the chief drivers of the government’s burgeoning budget mess.

“It nibbles at the edges of the problem,” said Nigel Gault, chief U.S. economist for the private firm IHS Global Insight. “The

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