WASHINGTON (Reuters) - One year into his presidency, Barack Obama's ambitious legislative agenda, including environmental policy, is threatened by political setbacks and an electorate questioning his priorities in the midst of tough economic times.
The Democratic president came to office promising to seek comprehensive energy and environmental reforms, including the passage of a cap and trade bill to reduce carbon dioxide emissions blamed for global warming.
But the U.S. Senate -- historically a burial ground for many presidential initiatives -- hasn't yet responded to Obama's call.
Here are some possibilities for Obama regaining momentum:
Senator John Kerry has been working with Republicans and independents in the Senate on a grand compromise bill that would include cap and trade, expanded domestic oil and gas drilling and added incentives for nuclear power.
But cap and trade has many opponents. It would require industry to reduce its carbon pollution over the next 40 years and require companies to hold permits for every tonne they emit. Those permits could be traded on a regulated market. Opponents say it will drive jobs abroad and raise U.S. consumer prices.
Some Democratic leaders are now raising the possibility of passing just part of a comprehensive energy policy -- the less controversial part, such as incentives for utilities and others to use more alternative fuels such as wind and solar power.
That would leave the door open for possibly debating cap and trade, or another approach to lowering carbon emissions, for another time.
A special election on Tuesday resulted in Republicans picking up a seat in the Senate and robbing Democrats of the supermajority of 60 that they needed to overcome roadblocks.
As a result, Obama is staring down the possibility that his leading initiative, healthcare reform, may not pass.
Some Congress-watchers think that as a result, Obama and his fellow Democrats in Congress should try to regain momentum in Washington by scoring a quick victory on something, such as an energy/environment initiative that recent polls show the public supports.
"If healthcare is not dead, it's awfully close to sleeping for a while and the agenda is going to have to focus on someplace they can win. They need to post some points and quick, no matter what. Time is running out," said Kevin Book, an analyst at ClearView Energy Partners in Washington.
As the year wears on, Democrats' hopes of getting major bills passed diminish as the November congressional elections further politicize debates.
Some environmentalists argue that unlike in the healthcare debate, there at least are some Republicans willing to engage on cap and trade. Senator Lindsey Graham, for example, is dealing with Kerry on a climate bill and Senator Susan Collins has co-sponsored a Democratic bill calling for a carbon cap, but without the trading.
If Kerry, Graham and independent Senator Joseph Lieberman can strike a deal on a cap and trade bill, it could rise from the ashes.
If recent events underscored anything, it is that the U.S. public is worried about the economic future in the face of a 10 percent unemployment rate, the highest in a quarter-century.
When Obama delivers his annual State of the Union address to Congress on January 27, he is likely to focus on jobs and expected to cast his environmental policy as a way to create jobs and stimulate the economy. "If you sell those arguments you've got a winning issue," Kerry argues.
Senate Majority Leader Harry Reid opened the first legislative session of 2010 on Wednesday saying Democrats will work to create "new jobs, good paying, clean-energy jobs that can never be outsourced."
The Environmental Protection Agency has the power to act on climate change after the Supreme Court ruled that pollution threatens human health. Obama would prefer that Congress passes a climate law, but if it fails, EPA could crack down on emissions. Lawyers for emissions traders say the EPA could craft its own cap and trade program. But EPA action is vulnerable to potential moves by lawmakers and litigation from industry groups to stop the agency from regulating the gases.
Editing by Eric Walsh