His most pressing challenges are all too familiar - a still weak economy and almost 23 million people out of work.
There are also sharp differences with Republicans in Congress on taxes, spending and the massive deficit.
Presenter: Kim Landers
Speaker: Norm Ornstein, Resident, American Enterprise Institute
KIM LANDERS: Outside the White House in the early hours of the morning, president Barack Obama's supporters were still celebrating.
LAUREN HAIGLER: It's just electric. It's so happy and so excited that we've got four more years.
KIM LANDERS: For Lauren Haigler and Marvin Wallace there was relief, mixed with a dose of reality.
LAUREN HAIGLER: We got our president re-elected for four more years and there's still work to do and I truly think we're on the right path.
KIM LANDERS: The hope and change that Barack Obama once promised has faded and for voters like Josh Brophy expectations have been tempered.
JOSH BROPHY: He's not perfect but he's the strongest option that was available and I'm happy that we have him.
KIM LANDERS: Barack Obama won despite the highest unemployment rate of any president since Franklin Roosevelt in 1936 and he's only the second Democrat since then to win a second term.
Norm Ornstein is a resident scholar at the American Enterprise Institute.
NORM ORNSTEIN: People still blame Bush more than they do Obama for the poor state of our economy.
There was a more sophisticated sense that the economic troubles that we have now are not typical of a recession but are deeper and more complicated and there is more of a willingness I think to give a president more slack, a little bit more time.
KIM LANDERS: But the president knows there's little time to savour his election triumph.
BARACK OBAMA: You voted for action, not politics as usual. You elected us to focus on your jobs, not ours. And in the coming weeks and months I am looking forward to reaching out and working with leaders of both parties, to meet the challenges we can only solve together.
KIM LANDERS: The biggest challenge is the so-called fiscal cliff - a combination of dramatic spending cuts and tax increases that are set to take effect in January and threaten to send the country back into recession unless the president can cut a deal with Republicans in the Congress.
Norm Ornstein doubts Republicans will be in a mood to cooperate.
NORM ORNSTEIN: What he's going to have to do is use maybe more of a public approach, using the bully pulpit, going out to the country to put some pressure on those House Republicans.
KIM LANDERS: For a newly re-elected president the reality of dealing with a still divided Congress is a daunting task.