While the Republican Party in the United States engages in bitter recrimination and the billionaires who put hundreds of millions into Mitt Romney’s campaign wonder why he still lost, President Barack Obama has to address major issues for his second term, which starts in January. First, Mr. Obama’s cabinet faces changes. Secretary of State Hillary Clinton and Secretary of Defense Leon Panetta both plan to leave after the Senate confirms their respective successors. Treasury Secretary Tim Geithner will stay on while the administration negotiates budgets with the incoming Congress; Attorney General Eric Holder wants to stay at the Department of Justice through the imminent 50th anniversary of landmark civil-rights legislation. Yet finding replacements will not be easy. U.N. Permanent Representative Susan Rice could face confirmation problems for the State post after saying the September 11 attack on the U.S. mission in Benghazi was unplanned. John Kerry, if appointed, would open up a Senate vacancy and an election which the Democratic Party might not wish to risk; his chairmanship of the Senate Foreign Relations Committee is also a Democratic asset. Eleanor Clift also notes in the Daily Beast that National Security Adviser Tom Donilon may not have the public persona the President favours for the State Department. As for Defense, Under Secretary Michele Flournoy is tipped, but she will have to deal with the military, who hold authority over key defence plans. The easiest move could see White House Chief of Staff Jacob Lew taking the Treasury after Mr. Geithner leaves.

The toughest domestic issue will be Mr. Obama’s relations with Congress, especially the House of Representatives, where the Republicans have long voted on party lines and blocked almost every measure of his. Now, faced with gridlock — the Senate has a 52-45 Democrat majority — and a re-elected President, House Republicans have indicated a willingness to negotiate over the fiscal cliff looming at the end of this year, when Bush-era tax cuts expire just as $600 billion in federal spending cuts also take effect. Amid fears of a fresh recession, the Republicans want to raise revenue by closing tax loopholes, but they are ideologically opposed to tax increases. Mr. Obama, on the other hand, says he has a mandate to raise taxes on incomes above $250,000 a year. He has a potent weapon in that the impending crisis, if left unresolved, will hit lower earners harder. Hard politicking awaits, but the Framers of the Constitution would have expected nothing less in the search for constructive compromise.

More In: Editorial | Opinion