Photo by Nick Knupffer; courtesy of Creative Commons

One of the most important and time sensitive tasks the president must work with Congress on is avoiding the, “fiscal cliff.”

The Dow Jones Industrial Average finished down for the second day in a row on Thursday as investors worry about what will happen to the U.S. economy if a deal is not made.

The “fiscal cliff” is a combination of letting the tax cuts expire and spending cuts to help balance the federal budget. These measures would go into effect in January, unless Congress makes a deal on how to combat the federal deficit.

President Obama’s phone call to congressional leaders suggests he wants compromise now more than ever to keep the country moving.

Both parties realize this is a major issue and on Wednesday both Majority Leader Senator Harry Reid (D-NV) and House Speaker Representative John Boehner (R-OH) said they are willing to work with the opposing party, but Boehner does not want taxes for the wealthy increased.

President Obama will have to work with both sides to strike a deal and prevent the cost cutting measures from going into effect.

On Thursday, the Congressional Budget Office (CBO) said these tax increases and spending cuts would cause the economy to constrict in 2013 for the entire year and unemployment would reach 9.1 percent by the end of 2013. The CBO added that by 2018, however, the employment rate could drop to 5.5 percent.

The President would have to help ease partisan gridlock in Washington if he wants a deal to be made. Even though this is not a defined role for the president, Obama will have some of the responsibility on his shoulders. 

The 112th United States Congress is arguably one of the most polarized the country has ever seen. There are multiple factions of the Republican Party and the two parties almost never agree.

Minority Leader Senator Mitch McConnell (R-KY) did not work with the president during his first term. Some people have renewed hope because Obama cannot be elected again, which may mean the Republicans, including Senator McConnell, would be willing to compromise. 

After dealing with the “fiscal cliff” issue, most believe the president will turn his attention to the economy. The economy has improved in recent months, but there is still work to be done. Many believe Obama will do what he can to ensure the economy continues to improve. 

If he can do so, it will also help the president and his party in the 2014 mid-term elections. 

There are multiple issues the president will be occupied with on the international front as well. Four of the leading issues include dealing with the Euro zone crisis, dealing with Iran, monitoring the Civil War in Syria and enforcing trade agreements with China.

In the short term, President Obama will have to appoint a new Secretary of State. 

Reach staff reporter Max Schwartz here; follow him on Twitter here.