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THE RESET: Election prompts strategy shifts

WASHINGTON (AP) — Last week's elections are prompting multiple resets and course corrections.

A victorious President Barack Obama, a shell-shocked Republican Party and congressional leaders in both parties are undergoing strategy reboots — both with an eye to the future and to confront the more immediate problem of a looming budget crisis.

Without a deal by Jan. 1, the nation will go over a "fiscal cliff" of automatic tax increases and severe spending cuts that will affect nearly every American. Some economists say it also could trigger another recession.

Lawmakers returned Tuesday for a year-end session a week after Obama won re-election and Congress was left as divided as before, with Democrats still ruling the Senate and Republicans the House.

Both Obama and House Speaker John Boehner say they want to bargain, but wide differences persist. Obama wants to allow taxes to rise on the wealthy while Republicans generally want any budget deal to exclude tax rate increases and include deep domestic spending cuts. It's up to Obama and lawmakers to navigate to common ground.

"Divided government didn't work in the last two years. We're going to have to find a way to make it work in the next two years because these fiscal issues are getting worse, not better," said vanquished GOP vice presidential candidate Rep. Paul Ryan, who now will deal directly with the president as chairman of the House Budget Committee. "I want to be part of the solution," he told the Milwaukee Journal Sentinel.

Not wanting to overplay his hand, Obama met Tuesday with labor leaders, was huddling Wednesday with top corporate chieftains and meeting Friday with bipartisan congressional leaders.

He also faces a host of foreign policy decisions on China, Afghanistan and Iran. And his administration is embroiled in a spreading sex scandal that has already claimed the job of CIA Director David Petraeus.

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Follow Tom Raum on Twitter: http://www.twitter.com/tomraum

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