Republicans are celebrating after little-known state senator, lawyer and former male model Scott Brown won the late Ted Kennedy’s Senate seat in Massachusetts yesterday.
Senator Brown is touting his triumph as a clear sign that Americans want the president to put the brakes on his reform drive, beginning with his unpopular bid to overhaul America’s healthcare system.
“What happened here in Massachusetts can happen all over America,” Senator Brown told a cheering crowd after his win. “I hope [Washington] is paying attention because tonight the independent voice of Massachusetts has spoken.”
The election result means the Democrats have lost their “supermajority” in the Senate, putting Mr Obama’s domestic agenda in jeopardy.
This morning the White House said Mr Obama was willing to work with Republicans on health reform, while the president himself acknowledged that voter anger helped carry Senator Brown to victory.
“People are angry, they are frustrated. Not just because of what’s happened in the last year or two years, but what’s happened over the last eight years,” Mr Obama told ABC America News as he reached the anniversary of his first year in office.
Mr Obama made clear he was sticking with his healthcare push but showed signs of a willingness to give ground.
“I would advise that we try to move quickly to coalesce around those elements in the package that people agree on,” he said.
“We know that we need insurance reform. The health insurance companies are taking advantage of people. We know that we have to have some form of cost containment because if we don’t, then our budgets are going to blow up.
“And we know that small businesses are going to need help so that they can provide health insurance for their families. Those are the core, some of the core elements of this bill.”
The President’s senior adviser, David Axelrod, also insists the health reform plan is not dead.
“We will decide how to move forward, but it’s not an option simply to walk away from a problem that’s only going to get worse,” he said.
Mr Obama plans to extend health care to as many as 35 million of the 36 million Americans who currently lack it, but Senator Brown has promised to be the 41st Republican vote to derail that reform.
The White House insists it will heed the result, but as it grapples with the fallout, top officials are also appearing in public to take the blame for the Christmas Day terrorist incident.
The loss is not quite the present Mr Obama may have hoped for to mark his first anniversary in office.
White House spokesman Robert Gibbs says the administration has to work harder to convince Americans the president knows that the economy is their top concern.
“Healthcare is an aspect of it but this is far broader than that,” he said.
“There is an anger and a real frustration, people’s jobs being shipped overseas.”
The Massachusetts election loss is not the only fallout the Obama administration is having to deal with on its anniversary.
Top US intelligence officials have appeared in public for the first time since a 23-year-old Nigerian tried to blow up a plane on a flight from Amsterdam to Detroit.
At the first of many Congressional hearings, the director of the National Counterterrorism Centre, Michael Leiter, has acknowledged failures.
“Umar Farouk Abdulmutallab should not have stepped on to a plane on Christmas Day. The counter-terrorism system collectively failed,” he said.
But for Republicans like Senator John McCain, that is not good enough.
“Has anybody been fired? Has any been transferred? Has anybody received a letter of admonition? Has anybody been put on leave?” he asked.
Mr Leiter, in response, insisted the government was conducting internal reviews to determine whether or not any of those options should be pursued.
In the meantime, the director of National Intelligence Dennis Blair sounded a warning.
“We have to make it clear we cannot give an absolute guarantee of identifying every single one of these terrorists,” he said.
“We need a system of offence and defence, go after them where they are.”
Still reeling from the botched terrorist attack, grappling with a shaky economy and now an election defeat, it has been a rough end to the President’s first year.