Obama 2.0: Deficit Deal Tops Day-One Agenda

Nov. 7, 2012 -- CHICAGO -- He won a second term by a narrower margin than he won his first, but President Barack Obama believes his victory Tuesday night delivered a mandate that will reinvigorate his stalled legislative agenda and resolve a partisan impasse over taxes.

Obama will waste little time putting his perceived new influence to the test, aides say, making negotiations over expiring tax cuts, looming spending cuts and deficit reduction his immediate priority after the electoral smoke clears.

A double dose of deep reductions to defense and social spending, plus across-the-board tax hikes for all Americans, will automatically kick in 54 days from now unless Obama can broker a deal.

Read more about election results.

"First thing we're going to have to do is to, once and for all, determine how we're going to reduce our deficit and our debt coming out of this terrible crisis we've had now that the economy has begun to grow again, we're adding jobs again," Obama told a local Des Moines, Iowa, TV affiliate Tuesday.

"If we can get that done early, then my sense is not only will the economy grow and see more jobs added, but I think it will take a lot of the rancor out of our politics," he said.

But despite that sanguine view, there are signs that a compromise on taxes with Republicans -- who retained majority control of the House of Representatives -- won't come easily.

Transcript: read Obama's election night acceptance speech.

Obama remains insistent that existing tax cuts on individuals earning more than $200,000 a year and families making more than $250,000 should expire on Jan. 1, 2013. Republicans remain staunchly opposed to any increase in taxes.

"We're not raising taxes on small-business people," House Speaker John Boehner told Politico in an interview on the eve of the vote.

After it became clear Obama would win the election, Boehner released a statement pointing out that Republicans held onto the House of Representatives.

"If there is a mandate, it is a mandate 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," Boehner said early Wednesday morning.

Finding that common ground will be difficult since both men have made such specific declarations about taxes. They tried - and failed - to achieve a "grand bargain" to reduce the deficit in 2011. Through a complicated legal agreement, that failure is what led to the automatic spending cuts and tax hikes Boehner and Obama will now have to work quickly before the end of the year to avoid.

Wasting no time, Boehner has scheduled a press conference to discuss the fiscal cliff on Capitol Hill on Wednesday afternoon.

Analysis: For Obama, a mandate only if he can earn one.

However the fiscal debate is resolved will largely set the tone for a raft of domestic policy debates to follow.

Obama has said he plans a big push for a comprehensive immigration reform bill, a stimulus package for states to help hire public school teachers, and a massive infrastructure upgrade that he says will provide jobs to thousands of construction workers.

He has also signaled plans to consolidate progress on financial regulatory and health care reform by more aggressively implementing the outstanding provisions of the Wall Street reform law and Obamacare.

"I truly believe that if we can get the deficit and debt issues solved," Obama told "Morning Joe" last month, "then that clears away a lot of the ideological underbrush. And then now we can start looking at a whole bunch of other issues that, as I said, historically have not been that ideological."

Obama is expected to navigate the new dynamic with a largely stable team of senior aides and cabinet secretaries, though he will have to recruit and nominate some new members.

He has already begun to take stock of who's planning to leave the administration and who would like to stay, aides say. In the next few weeks he will begin examining resumes of possible replacements for top officials, including Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner.

Even as all the official business looms, Obama is also expected to make it a priority to take some quality time with his daughters, Sasha and Malia, and his wife Michelle in the days ahead.

Obama spent more than 121 days on the road in the 2012 battlegrounds, headlining 170 events this year, by ABC News' count.

"I do miss home," Obama told WZID-FM in New Hampshire on Tuesday. "One of the nice things is I work and live in the same building and if I'm in town, I'm home for dinner at 6:30…I miss that a lot."

"Hopefully after the election we'll be able to settle back into a routine," he said.