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Mayor Bloomberg started his year on the stage he was supposed to exit. He took the oath of office for a third time at City Hall, promising to soften his sometimes hard edges and avoid the pitfalls that other third term mayors have faced.

He brought in a new inner circle, replacing long-time aides with new deputy mayors: Howard Wolfson, Robert Steel and Stephen Goldsmith, all charged with thinking outside the box.

Immediately, the mayor was forced to deal with a massive budget deficit and proposes ideas seen before, like closing 20 fire companies and cutting social services. The City Council was able to successfully block many reductions in June, but come November budget cuts the Council had blocked seem all but inevitable.

A big issue of Bloomberg's second term also re-emerged. Term limits were placed on the November ballot -- two years after Bloomberg and the Council changed them without voter input -- and voters decided to go from three terms back to two.

Bloomberg's national profile continued to increase when he waded into one of the biggest debates of the year and gave an impassioned speech defending the development of a mosque and community center near Ground Zero.

The mayor traveled the country to support candidates in elections outside New York and closer to home endorsed Andrew Cuomo for governor. Talk in political circles once again turned to whether Bloomberg has aspirations for the White House. By year's end, Bloomberg essentially ruled it out.

The end of the year, though, brings headaches and talk of those third term blues. Cathie Black, his pick to replace Joel Klein as Schools Chancellor, received days of terrible press and Bloomberg was attacked for the secretive selection process.

The anti-corruption mayor was also forced to grapple with a huge scandal. Six private contractors were charged with ripping off $80 million from the city.

At the end of the year, Mayor Bloomberg remains relatively popular but he still has to deal with some voters who think he's been on the stage for too long.