RPT-With array of challenges, Obama kicks off second term at public inauguration

* Scaled-back inauguration celebration matches tenor of

times

* Budget troubles, gun control and immigration issues await

* Second oath of office for Obama in 24 hours

WASHINGTON, Jan 21 (Reuters) - Four years after making

history by becoming the first African-American president, Barack

Obama will kick off his second term on Monday with a scaled-back

inauguration that reflects the tempered expectations for his

next four years in office.

Lingering high unemployment, bitter political battles and a

divisive re-election campaign have punctured the mood of

optimism and hope that infused Obama's 2009 inauguration after a

sweeping election win.

This time, Obama's inauguration will feature smaller crowds

and a reduced slate of inaugural balls and parties to match the

more subdued tenor of the times.

When Obama raises his right hand to be sworn in by Chief

Justice John Roberts outside the U.S. Capitol at 11.55 a.m. EST

(1655 GMT), it will be his second time taking the oath in 24

hours.

He had a formal private swearing-in on Sunday at the White

House because of a constitutional requirement that the president

be sworn in on Jan. 20.

Rather than stage the full inauguration on a Sunday, the

main public events were put off until Monday.

Obama will take the oath again and deliver his inaugural

address from the Capitol's west front overlooking the National

Mall, where a crowd of up to 700,000 is expected to watch. That

is down significantly from the record 1.8 million people who

jammed Washington in 2009 for Obama's first inauguration.

The focal point will be Obama's inauguration address, which

he will use to lay out in broad terms his vision for the next

four years but will stay away from policy specifics.

David Plouffe, a senior adviser, said Obama would call on

both parties to come together to resolve daunting second-term

challenges like the budget, the need to raise the nation's

borrowing limit and the Democrat's push for tighter gun laws and

a legal path to citizenship for illegal immigrants.

The president views the inauguration speech and the State of

the Union speech to Congress on Feb. 12 as "a package," Plouffe

said, and would save details of his second-term agenda for the

later speech.

'LAY OUT HIS VISION'

"In the inaugural address he is really going to lay out his

vision for his second term and where he thinks the country needs

to go in the years ahead, the values undergirding that, and then

obviously a detailed agenda and blueprint in the State of the

Union," Plouffe said on CNN on Sunday.

After a bitter election fight against Republican Mitt

Romney, the daunting challenges facing Obama and his political

battles with congressional Republicans have split public opinion

about the prospects for the next four years.

An NBC/Wall Street Journal poll last week found 43 percent

of Americans were optimistic about the next four years and 35

percent pessimistic, with 22 percent having a mixed opinion.

Obama's main political opponent in Congress, Republican

House of Representatives Speaker John Boehner, plans to attend a

White House tea before the ceremony, as well as the inaugural

speech and a post-event lunch at the Capitol with the president

and lawmakers.

Public safety officials and workers closed Washington

streets around the ceremony site on Sunday night in preparation

for the inauguration, with security barriers going up and

thousands of police and National Guard troops being deployed

around the city.

The inauguration ceremony will include music - singers James

Taylor and Kelly Clarkson will perform patriotic songs and

Beyonce will sing the national anthem - and also feature Vice

President Joe Biden taking the oath of office again after doing

so already on Sunday.

Obama and his wife, Michelle, will join Biden and his wife,

Jill, at the capital luncheon before the two couples take part

in the inaugural parade down Pennsylvania Avenue from the

Capitol to the White House.

Obama could get out of his limousine and walk part of the

way to interact with the crowd.

After watching the rest of the parade from a viewing stand

in front of the White House, the Obamas will change and head to

the two inaugural balls - an official ball and one for military

personnel and their spouses.

That is a dramatic reduction in activities from 2009, when

there were 10 official inaugural balls.

With the public ceremony falling on the national holiday

honoring slain civil rights leader Martin Luther King Jr., Obama

will be able to draw some historic parallels. While taking the

oath, he will place his left hand on two Bibles - one once owned

by Abraham Lincoln and the other by King.

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