Oct. 23 (Bloomberg) -- L. Sonny Young usually hosts up to 20 people on Sundays at his Springfield, Ohio, barber shop to make calls for President Barack Obama’s health-care overhaul. Last week, only three people showed up.

“People are getting tired,” said Young, who used his shop to organize support for Obama’s presidential campaign in historically Republican Clark County. “We need to move it on, just step it up,” he said of the administration.

Young gives Obama credit. He quelled the worst financial crisis since the Great Depression. He passed a record $787 billion stimulus package and made more progress on health-care legislation than any president in more than 40 years. He also repaired the U.S. image abroad and earned a Nobel Peace Prize.

As the 63-year-old Ohioan suggests, all that could prove ephemeral if Obama can’t reverse an unemployment rate that has risen to a 26-year high of 9.8 percent, cut a budget deficit that stands at $1.4 trillion, remake the U.S. health-care system and produce a winning strategy for Afghanistan.

“In virtually every area that matters, the honest grade for the administration would be an incomplete,” said Bill Galston, a scholar at the Washington-based Brookings Institution who was a domestic policy adviser to former President Bill Clinton.

Obama is a victim of both circumstance and his own aspirations.

Obama’s Goals

Even facing the worst financial crisis in decades, he pressed for revamping the U.S. health-care system that accounts for one-sixth of the economy. Two Senate committees and three House panels have passed different versions of the legislation. Both chambers are working to meld their respective plans and remain split on key aspects of the bills, such as a public insurance option to cover the uninsured.

The new administration also has invested in clean energy and put in new fuel efficiency standards for cars while waiting for Senate action on climate legislation. Obama’s team also is pressing Congress to approve the most far-reaching revamp of financial regulation in 75 years in a bid prevent another crisis. The efforts have been stalled in the face of opposition from the financial industry.

Internationally, he’s weighing whether to send an additional 40,000 troops to Afghanistan as he searches for ways to convince North Korea to give up its nuclear weapons and prevent Iran from obtaining them. All those policies will play out in the context of the 2010 mid-term congressional elections.

Election Time Line

“The time line to 2010 starts soon,” said Julian Zelizer, a professor of history at Princeton University. “He’s only got a few months of flexibility left.” After that, lawmakers will focus on their own, not the president’s, priorities, he added.

The stock market has experienced both a bear and bull market during Obama’s first nine months in office. The Standard & Poor’s 500 index plunged 20 percent during the first seven weeks of his presidency and has surged 61 percent since, its steepest rally since the 1930’s.

Behind the turn-around: a perception among investors that the U.S. had avoided another Great Depression, thanks in part to Obama’s $787 billion economic-stimulus program and his actions to shore up the country’s 19 biggest banks.

“Obama quickly got his arms around the very difficult economic challenges he inherited,” said Mohamed El-Erian, chief executive officer of Newport Beach, California-based Pacific Investment Management Co., which runs the world’s largest bond fund. “The markets are focused on what did not happen, namely, that the U.S. and global economy avoided a major meltdown.”

Troubled Americans

That might not be enough for voters to support Democrats, Zelizer said. Americans are more troubled by a continued rise in unemployment that Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pennsylvania, forecasts won’t peak until the middle of next year at around 10.5 percent.

That’s certainly the case in Clark County, where the unemployment rate was 9.9 percent in September. “They just want to know where are the jobs, when are the jobs going to come,” Young said.

From July 20-Oct. 19 Obama averaged a 53 percent job approval rating, compared with the two previous quarters which were both above 60 percent, according to Gallup Daily tracking poll. The nine-point drop from the second quarter is the steepest for an elected U.S. president in his first term.

Obama’s advisers defend the president’s policies, saying that the stimulus package has sparked an economic recovery and saved or created 1.5 million jobs, with more to come. They’ve also left open the possibility of further steps to combat joblessness.

Creating Jobs

“The goal of anything we do is to create private sector jobs,” senior adviser David Axelrod, said in an interview last week.

The president’s room to maneuver is limited by the budget deficit, which former congressional budget analyst Stan Collender forecast would still be over $1 trillion in the current fiscal year that began on Oct. 1. “He’s running out of resources,” Zandi said.

Federal Reserve Chairman Ben S. Bernanke, speaking at a San Francisco Fed conference Oct. 19, urged the administration to set out a strategy to “substantially reduce federal deficits over time” to maintain confidence in the U.S. dollar.

The dollar has dropped 13 percent against an index of major currencies since Obama took office on Jan. 20.

Beyond domestic policy, international matters also are shaping his first year in office.

Hurdles Abroad

While Obama’s Nobel Peace Prize, awarded Oct. 9, is testament to America’s burnished image, what has remained out of Obama’s reach is visible progress persuading North Korea to return to talks, convincing Israeli, Palestinian and Arab leaders to compromise on steps to peace and achieving a breakthrough on relations with Iran.

Afghanistan has emerged as the toughest national security challenge.

On Capitol Hill, Republicans are pressuring Obama to commit fast to a substantial surge of troops, while Democrats are questioning an expanded or prolonged U.S. involvement. There is no resolution yet to an August election marred by fraud, and the insurgency in neighboring Pakistan has worsened.

“How the mission in Afghanistan fares will to a significant degree determine the legacy of the Obama presidency,” said Charles Kupchan, an adjunct senior fellow at the Council on Foreign Relations.

Major Challenges

Zelizer likened Obama’s challenges to those Lyndon Baines Johnson confronted after he assumed the presidency following John F. Kennedy’s assassination in 1963. Johnson pushed through legislation in 1964 outlawing racial segregation and launched the war on poverty. He also expanded the U.S. military role in Vietnam, the start of what proved to be an unpopular build-up that convinced him not to seek re-election in 1968.

Americans are split on Obama’s record. Forty-nine percent of voters say he has accomplished a great deal or a good amount, while 50 percent say not much at all, according to an Oct. 15-18 ABC News/Washington Post poll.

“I’m happy with where we’re at,” Axelrod said. “And frankly given the fact that we’re governing the worst economy of our lifetime, it’s a remarkable thing that his support has held up as well as it has.”

To contact the reporters on this story: Rich Miller in Washington rmiller28@bloomberg.netJulianna Goldman in Washington at jgoldman6@bloomberg.net

Last Updated: October 23, 2009 00:01 EDT