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Obama Faces Transition, Many Challenges Ahead

President-elect Barack Obama will have to hit the ground running when he assumes office in January.

The 47-year-old first-term senator will step into the Oval Office with a full plate. He will have to prosecute two wars, ensure the nation isn't vulnerable to terrorist threat and continue to help the U.S. and world economies get back on their feet after the worst financial crisis since the Great Depression.

The "Daily Show's" Jon Stewart put his finger on it when he asked Obama recently, given all the problems the new president will be facing, "Is there a sense that you don't want this?"


"The real challenge for the new administration is going to be prioritizing," said former Bush economic adviser Lawrence Lindsey on CNBC Wednesday morning. "There is going to be a $1.5 trillion budget deficit. At some point, they'll have to say you can't do everything."

Obama announced the key members of his transition team Wednesday. The team will be co-chaired by John Podesta, President Bill Clinton's former chief of staff; Valerie Jarrett, a longtime Obama confidante; and Peter Rouse, Obama's chief of staff in the Senate.

Obama also may have a press conference before week's end to announce top White House appointments. Reports say Obama would like to announce key nominations such as secretary of state and Treasury chief before the end of the month. Among the top contenders for Treasury secretary: Larry Summers, former Harvard president and deputy Treasury secretary. The thinking is that because he has already been through the confirmation process, his appointment would likely sail through. And some reports say Rep. Rahm Emanuel (D-IL) has been offered the White House chief of staff job.

A Wartime Transition

Because of the gravity of the issues facing Obama, this transition will be like few others.


"This is the first wartime transition since 1968, the Johnson-Nixon turnover during the Vietnam War," Pentagon spokesman Bryan Whitman said on Tuesday. Because of that, the Pentagon says it has made unprecedented efforts to ensure a smooth transition for the Obama team.

The president-elect will have big decisions to make on the wars in Iraq and Afghanistan. The U.S. has more than 150,000 troops in Iraq and 30,000 military personnel in Afghanistan. Obama has long opposed the war in Iraq and pledged that he would set up a timetable for the withdrawal of U.S. forces there. He has broadly hinted at getting that done in 16 months, though he said it would depend on conditions on the ground.

A draft security agreement between Iraq and the United States sets out a target for troop withdrawals. U.S. commanders have backed the agreement. The pact does not suggest drawing down troops as quickly as Obama has said he would like to. It is unclear where the middle ground will be.

The president-elect will need to square that decision with his desire to beef up troops in Afghanistan, where the Taliban is increasing both its power and its reach. Top military officials have said that with the U.S. military stretched so thin, the only way to step up the fight in Afghanistan is to winnow down troop levels in Iraq. A U.S. Army brigade of more than 4,000 troops is slated to head to Afghanistan in the early days of the new administration.

Events on the ground in Afghanistan further complicate the issue. The Afghan government has been stepping up its effort to work out some sort of peace deal with the Taliban. It is unclear where the Obama administration comes out on that. There has been some talk that Obama is considering leaving Defense Secretary Robert Gates in place — at least for the early portion of his term — which could make the transition easier. But it makes the decisions ahead no less complicated.

Another big concern is terrorism. Terrorists have a history of exploiting transitional moments to launch their attacks. It happened in Britain, in Spain and in the United States. The original World Trade Center bombing attempt by al-Qaida happened just weeks after President Clinton took office in 1993. And the handover of power to an Obama administration will be the first transition since the 9/11 attacks. With that in mind, there is a new law that will allow fast-track security clearances for the new administration. Some of Obama's transitional advisers should have interim security clearances starting Wednesday.

The transition briefing for Obama officials at the FBI also will bear all the hallmarks of the more dangerous post-9/11 world. Eight years ago transition briefings at the bureau were fairly straight forward. There would be the requisite discussions about organized crime, white collar offenses, and other basic criminal elements on which the FBI had drawn a bead. Incoming administration officials would learn about investigative techniques and counter-espionage efforts.

But in the first transition after the Sept. 11 attacks, the briefings will take on a very different tenor. Now the discussions will revolve around terrorist threats and their trip wires, how the FBI is working to prevent further attacks, and the growth of spies not just here at home, but overseas on the other end of an Internet connection.

There also is the sticky issue of new Justice Department guidelines that permit, among other things, the FBI to investigate Americans in national security cases without evidence of a crime. The FBI has said the changes in the rules were merely an attempt to bring national security investigation guidelines more in line with criminal investigations the FBI already conducts. The ACLU said the new investigative guidelines open the door to racial profiling.

The best way to gather domestic intelligence will likely be one of the early hot button issues the new Obama administration will face. Obama has floated the idea of creating a senior position that would coordinate domestic intelligence gathering, but it is unclear how exactly that would work.

Facing The Financial Crisis

But perhaps the most delicate issue for the new Obama team will be the 2-month old financial crisis. The markets will not wait for an inauguration. Obama has been in almost constant contact with Treasury Secretary Henry Paulson since the crisis broke out, and he is expected to keep that conversation going as Paulson begins making decisions on how to dole out the $700 billion in the bailout program.

Obama has already been in discussions with congressional leaders about the possibility of another stimulus program: a package of $100 billion for public works projects, expanded unemployment benefits, food stamps and winter heating assistance for cities and states. Such a program, even if it were passed, would need to survive a Bush veto, so it is unclear how far such an effort would get.

Speaking on CNBC this morning, former Treasury Secretary John Snow cautioned the incoming administration from taking the wrong message from last night's win. "The mistake they could well make is to interpret this as a mandate, and it is important not to overreach," he said. "You don't have a mandate for a far reach in political spheres."

He said the election last night wasn't as much about Obama as it was about the financial crisis.

"The economy stupid, the economy stupid. That is what captures what happens in this election," he said.

With reporting from the Associated Press.

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