The Iowa caucuses – which saw former Massachusetts governor Mitt Romney barely edge out former Pennsylvania senator Rick Santorum by eight votes – launched the battle to deny Obama his hoped-for second term.
In keeping with its previous line of attack, Obama campaign manager Jim Messina said in a statement that the "extremist Tea Party agenda won a clear victory" shortly after results were announced early Wednesday.
"No matter who the Republicans nominate, we'll be running against someone who has embraced that agenda in order to win – vowing to let Wall Street write its own rules, end Medicare as we know it, roll back gay rights, leave the troops in Iraq indefinitely, restrict a woman's right to choose, and gut Social Security to pay for more tax cuts for millionaires and corporations."
Messina also warned of "unprecedented" spending by outside groups on campaign ads and urged the president's supporters to step up donations and on-the-ground organising ahead of the November vote.
"Watching the circus on TV, it's tempting to think it's almost funny – but this is not a joke. We've got to be ready," Messina said.
Obama, weighed down by the sputtering economy and lingering high unemployment, faces a tough re-election battle with the eventual Republican nominee.
Romney has been a frontrunner for months, but nearly all the other candidates have at some point cycled to the front of the pack as wavering Republicans have sought a more conservative alternative.
Santorum, an ardent social conservative strongly opposed to abortion and gay marriage who had lingered in the second tier of candidates up until just a few days ago, was nearly able to defeat Romney in Iowa after running an intense campaign in the heartland state.