Starting with health care, the U.S. President faces a slew of issues, both at home and abroad, that could make or break his first year in office.

U.S. President Barack Obama has set a deadline of next month to have a Bill on the Oval Office desk to extend health insurance to the 46 million Americans who have no cover. It is possible, though unlikely, that he will get no Bill at all, but more likely, and almost as controversial, is that he will end up with a Bill that has been so watered down it will disappoint reformers.

Having lost ground to the Republicans over the summer, and seen support for health care slip in the polls, he will on Thursday night in a rare address to Congress try to wrest back the initiative.

He needs to describe a reform package that will win over liberal and fiscally conservative Democrats as well as moderate Republicans. The Senate finance committee, which has been drawing up a health Bill, has a deadline to produce draft legislation by September 15 supported by Democrats and Republicans. But the early drafts do not include a public option — a federally funded scheme to provide competition for the insurance companies, which is also favoured by Mr. Obama.

Iran

Mr. Obama promised during the election campaign to engage with countries such as Iran that were treated by George Bush as outcasts. He has offered direct talks with the Iranian leadership, and sent two letters, but Tehran has so far spurned his advances. The President has set a deadline of the end of this month for a response.

The signals from Iran so far have been mixed. Mahmoud Ahmadinejad, the Iranian President, said at the weekend he would go into talks about any issue, except the one that Mr. Obama wants: Iran’s alleged pursuit of a nuclear weapon. Iran’s chief nuclear negotiator, Saeed Jalili, says the country is open to fresh talks but so far has not made a formal offer to either Washington or the EU.

Republicans and rightwing commentators are already lining up to ridicule what they see as the failure of his overtures to Iran, North Korea and Syria.

If Tehran does not agree to fresh negotiations, the likeliest outcome is that Mr. Obama, along with Britain, France and Germany, will lead a push to impose fresh economic sanctions that would hit Iran’s oil and gas industry.

But there is no guarantee that Russia and China, who hold two of the five veto-wielding U.N. security council seats, would support sanctions.

At that point, Israel may opt for a unilateral strike on Iranian nuclear facilities, a move that Mr. Obama opposes.

Israeli-Palestinian conflict

Mr. Obama wants to announce at the U.N. General Assembly in the week beginning September 21 a resumption of the Israeli-Palestinian peace talks.

In an otherwise difficult month, this would be good publicity for him, allowing him to herald a diplomatic breakthrough together with the Israeli Prime Minister, Binyamin Netanyahu, and Palestinian President, Mahmoud Abbas.

But announcing a resumption of talks would be the easy part. The difficult part would follow, with negotiations over the future of Jerusalem, homes for Palestinian refugees and setting the border, awkward at the best of times, but made harder by Mr. Netanyahu’s rightwing coalition and the weakness of the Palestinian leadership. An early taste of the problems ahead was provided last weekend when Israel approved almost 500 new homes in the occupied West Bank, in spite of Mr. Obama’s call for a freeze.

Climate change

Mr. Obama put energy reform at the heart of his White House agenda, holding up the potential of green jobs to lift American workers out of recession and transform the economy.

He got off to a good start when the House of Representatives narrowly passed a climate change Bill in June that, for the first time, sought to reduce America’s carbon emissions. But the effort is stalling. Coal, oil and manufacturing interests have organised against the Bill, eroding support among Democrats, especially in the rustbelt states of the mid-west and coal producing areas.

The Democratic leadership in the Senate this week postponed plans to roll out its version of a climate Bill until later in the month.

Some environmentalists and Democratic leaders now fear that the Senate will not manage to pass climate change legislation this year, and that could seriously undermine prospects of reaching agreement for global action on climate change at an international meeting in Copenhagen in December.

China, India and other big polluters have warned they will not sign up to a climate change treaty until America demonstrates its own commitment to cutting the carbon emissions that cause global warming.

Afghanistan

Mr. Obama fought the election on a promise to end the war in Iraq and switch the focus to Afghanistan. He is sending 21,000 more troops to Afghanistan to bring the U.S. total to 68,000, and has sacked the U.S. commander-in-charge, General David McKiernan, replacing him with a counter-insurgency specialist, General Stanley McChrystal.

But U.S. casualties have been rising, Washington has little faith in the Afghan President, Hamid Karzai, especially after elections tainted with suspected widespread fraud.

Mr. Obama has to make a decision this week or soon after about whether to agree to a request from General McChrystal for more troops. The debate in the U.S. has intensified between those who say the U.S. has to see the war out to the finish, and others who say that it is becoming an increasing muddle. Compounding the problem is Pakistan, with U.S. diplomats reporting that the Pakistani army continues to see India rather than Islamist terrorism as the main threat and still supports the Taliban as a counter to Indian influence in Afghanistan.

Recession

The biggest problem facing Mr. Obama, and the one that could determine whether he secures a second term, is the economy.

In spite of figures suggesting the U.S. economy is emerging out of recession, unemployment statistics released on Friday showed another rise, with almost 10 per cent out of work. The details are worse, with the unemployment rate for African-Americans higher, at 15 per cent.

These are the official figures, which do not include the millions who do not declare themselves as unemployed.

One of the criticisms of Mr. Obama is that the $787-billion stimulus package he introduced, while staggering in its scale, was not brave enough and that another package will be needed. Christina Romer, one of Mr. Obama’s economic advisers, said the stimulus package was working but, significantly, declined to comment on whether there needed to be a second package.

Some of the initiatives in the stimulus package, such as the “cash for clunkers” scheme, in which car owners received a cash incentive for trading in old cars for more fuel-efficient ones, did create a demand, helping to keep car manufacturers and sellers in jobs. But other initiatives have not yet fed into the system.

Guantanamo

Another looming decision is the future of the remaining 229 detainees at the Guantanamo detention centre.

It is one thing to announce the centre is to close but another to find an alternative. Democrats who supported Mr. Obama’s closure announcement in January are less keen now when faced with the prospect of those detainees being transferred to their states for imprisonment or trial.

Congress withheld funds for the closure until this month to give Mr. Obama time to come up with a detailed plan.

Mr. Obama promised Guantanamo would close by January and, for that to happen, he has to make decisions soon in order for work on a new facility to be completed in time.

The Justice Department is expected to have completed a review of the cases of each of the inmates by early next month, making a decision on who should be released, who should stand trial and who should be held in custody indefinitely without trial. If they are to be released, Mr. Obama has to find other countries willing to take them.

For those who will continue to be held, the administration is looking at a prison in Michigan that was due to close — the state is divided over the prospect but some argue that saving jobs makes the transfer more attractive — or one in Kansas, where there is more local opposition. — © Guardian Newspapers Limited, 2009

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