Below are some of the possible consequences of the move:

Financial crisis
The US financial crisis is the worst since the Great Depression. Economists say the country is in a recession that may get worse by the time the next president takes office in January. Mr Obama advocates a second stimulus package to jump-start the economy. The plan would include funding for infrastructure and another round of rebate checks.

In order to stimulate the weak US economy, Mr Obama and the Democrats are likely to reach an agreement on a second stimulus package valued at US$175 billion (S$258 billion) to try to get consumers spending again.

He is likely to take further steps to regulate the financial industry in the wake of a credit crisis that infected Wall Street and triggered a stock meltdown that cost Americans billions of dollars in retirement savings.

Foreign policy
Mr Obama has promised an orderly withdrawal of US troops from Iraq and a greater focus on the war in Afghanistan.

Democrats will call on him to carry out his pledge, but the gains that have been made in Iraq in recent months may make it tempting for Mr Obama to stop short of his pledge to pull out one combat brigade per month until they are all withdrawn.

He has said he would be willing to meet, without preconditions. with leaders of countries hostile to the United States, such as Iran, Cuba and Venezuela. Look for increased US diplomatic activity with those countries with the aim of determining whether an Mr Obama meeting with the leaders would be worthwhile.

Health care
Mr Obama identified bringing down high health-care costs and reforming the health insurance system as an economic priority. He has also proposed a national insurance programme to allow individuals and small businesses to buy health care similar to that available to federal employees, supplemented in part by a tax on employers who do not provide coverage.

Energy
US dependence on foreign oil is seen as both a security and economic threat. Mr Obama says he is open to offshore drilling and nuclear power, but emphasises boosting energy efficiency and massively increasing investment in renewable energy.

Taxes
Mr Obama wants to expand the Earned Income Tax Credit and Child and Dependent Care Tax Credit, create a refundable 'Universal Mortgage Credit' of 10 per cent of mortgage interest for homeowners who do not itemise tax returns, and eliminate income tax for seniors making less than US$50,000 a year.

He ran on a pledge to give Americans who make less than US$200,000 (S$295,000) a year a tax cut, thus reaching 95 per cent of taxpayers, and raise taxes on those making above US$250,000 a year.

With him and Democratic congressional leaders in charge, this pledge may be scaled back to give fewer people a tax cut and to include more people among those who would face higher taxes. -- REUTERS