FACTBOX-Obama's agenda runs into economic reality

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Nov 25 (Reuters) - The U.S. jobless rate soared to a 26-1/2 year high of 10.2 percent last month while President Barack Obama's once lofty approval rating fell to 50 percent.

The figures underscore problems for Obama and his fellow Democrats as he pushes an ambitious legislative agenda and they worry about losing congressional seats in the 2010 election.

Complicating matters are polls that show the public has begun to blame Obama for the recession he inherited from his predecessor, Republican George W. Bush, when he took office in January.

Thanks, in part, to last year's $700 billion federal bailout of Wall Street, stocks have been on a tear since March. But the double-digit jobless rate has contributed to a perception that Obama hasn't done enough to help Main Street.

Consequently, Obama faces opposition from members of both political parties for many of his top priorities.

Here is a look at some of the battles:

HEALTHCARE

With polls showing the public split, critics and backers of Obama's bid to revamp the $2.5 trillion U.S. healthcare system cite the U.S. economy to try to score points for their side.

Proponents point to a nonpartisan congressional analysis that found that the Democratic bill before the Senate would cut the record federal deficit, provide insurance to millions of uncovered Americans and trim healthcare costs.

But opponents warn that the plan would backfire, cost more than official estimates and make the economy even worse. Many are lined up against a centerpiece of the legislation, a government-sponsored health insurance program to compete with private insurers.

A handful of moderates among the 60 Senate Democrats say the public option must be changed or dropped to win their needed support.

They warn that a government run insurance program would likely lose money. Backers, however, say the public option would drive down costs.

CLIMATE CHANGE

Obama had pushed for enactment this year of legislation to stem global warming. He is going to fall short largely because of the sputtering economy.

The president's fellow Democrats are now hoping to pass such a measure early next year, and in effort to drum up more support intend to cast it as a jobs-creation measure.

But so far, that hasn't gained much traction and estimates of the jobs to be created by turning to alternative energy sources are highly speculative.

Moderate Democrats are particularly nervous about voting for a climate bill. They believe it could raise consumer prices as cheap coal and fossil fuels are phased out in favor of clean energy like solar and wind, which is now more expensive.

TAXES

President George W. Bush's 2001 and 2003 tax cuts expire at the end of 2010. Democrats hope to extend those tax cuts that favor the middle class. But record budget deficits could force Obama to break his campaign vow not to increase taxes for those earning less than $250,000 a year.

JOBS PROGRAM

The White House is mulling further steps to create jobs, but insists it is not cooking up a second stimulus. Republicans will pounce on any big spending requests and point out that unemployment has far exceeded what Obama predicted after Congress enacted a $787 billion economic stimulus package early this year.

REGULATORY REFORM

The White House wants the Federal Reserve to oversee firms that could pose a risk to the entire financial system. But some lawmakers are reluctant to go along because they think the Fed failed to prevent the latest financial meltdown.

The Fed's role in bailing out insurer AIG -- and its refusal to name which firms took in billions of dollars in taxpayer money as a result of that rescue -- has hardened attitudes toward the central bank.

Just before lawmakers went home for the Thanksgiving holiday, progress on regulatory reform faltered when a House committee postponed a pivotal vote over the economic concerns of some lawmakers and Senate Republicans aired stubborn opposition to a Democratic plan in that chamber.

The delay flew in the face of a call by Treasury Secretary Timothy Geithner for swift action and occurred in wake of demands by some Republicans and at least one Democrat, Peter DeFazio, that Geithner resign.

FED CHAIRMAN BERNANKE

Obama's bid to give Fed Chairman Ben Bernanke a second four-term term seems virtually assured and he seems certain to survive a Senate confirmation hearing on December 3.

But Bernanke should expect a public flogging from angry lawmakers before the full Senate votes.

Senator Christopher Dodd, who chairs the Banking Committee that will hold the hearing, has become an outspoken critic of the Fed's handling of the economy. The panel's top Republican, Senator Richard Shelby, is also highly critical.

Another vocal Republican on that committee, Senator Bob Corker, was among the first to publicly question Fed officials about why they did not force banks to take losses from AIG.

AFGHANISTAN WAR

If Obama, as anticipated, increases U.S. troop levels in Afghanistan as part of a bid to ultimately end the conflict, expect another fight in the U.S. Congress over taxes.

David Obey, chairman of the House of Representatives Appropriations Committee, has called for a "war tax" to pay for any troop escalation. "If they ask for an increased troop commitment in Afghanistan, I'm going to ask them to pay for it," Obey told ABC News on Sunday.

IMMIGRATION

Obama says he wants to legislation by early next year to revamp U.S. immigration laws and provide a path toward citizenship for millions of illegal immigrants.

But many of his fellow Democrats in Congress appear to be in no mood to dive into yet another divisive issue just before the November election.

(Writing by Thomas Ferraro and Emily Kaiser in Washington; additional reporting by Donna Smith, Richard Cowan and Tim Gardner, Editing by Alan Elsner) ((For main story, please click on [ID:nN25364776])) ((thomas.ferraro@thomsonreuters.com; +1 202 898 8391))