Cao was sworn into office on January 6, 2009, with his family and a group of Vietnamese-Americans in attendance. After the swearing-in by Speaker of the House Nancy Pelosi, Jefferson Parish Judge Robert Murphy re-administered the oath in Cao's new office.
Despite the tardiness of the election date, Cao rapidly set up his office and staff and gained committee assignments for the 111th Congress. On March 24, 2009, 11 weeks to the day after he was sworn in as a new member, Cao delivered his first speech on the House floor: his statement supported a bill by California Democrat Linda Sánchez to express congressional support of Welcome Home Vietnam Veterans Day. In the speech, which was broadcast on C-SPAN, Cao said, of Vietnam War veterans, "I am pleased that I, a direct beneficiary of their service, can take part ... in this historic event." The bill passed. Cao's speech had been written by his Legislative Director, A. Brooke Bennett.
Cao was invited to a White House reception on April 23, 2009. He presented President Obama with a letter requesting $490 million for post-Katrina restoration of New Orleans' Charity Hospital. (FEMA had offered $150 million). Cao also spoke with Vice President Joe Biden regarding the recovery of New Orleans.
According to a 2011 survey by the National Journal, Cao was the most liberal Republican in the House. In 2009, he was one of seven Republicans who voted to publicly rebuke Representative Joe Wilson, Republican of South Carolina, for his outburst of "You lie!" against President Obama during an address before a joint session of Congress.
In April 2009, Cao's district staff moved into what was described as the first office in Kenner for a sitting congressman. The office was formerly a storeroom in Kenner's Community Services Department at 624 Williams Boulevard (LA 49).
Among the bills which came to the floor during Cao's first days in Congress, Cao voted against the Obama Administration's stimulus package. Cao justified his votes on expressed dissatisfaction that his 2nd congressional district of Louisiana ranked dead last among the 435 congressional districts in outlays provided by the legislation even though the district was one of the most seriously damaged by hurricanes. Cao's vote provoked a petition to recall him, which formally began on February 16, 2009. Louisiana Secretary of State Jay Dardenne and other Louisiana officials, as well as congressional analysts, perceived it as having little or no prospect of succeeding. Although the petition collected more than 13,000 signatures on the first day, it needed more than 100,000 within 180 days to fulfill Louisiana requirements. Congress has never removed, and has no constitutional provision to do, a member based on constituents' recall. Several leaders of the recall campaign, specifically the Reverends Samuel Butler and Toris Young, claimed to have been supporters of Cao, though Cao and his campaign manager Bryan Wagner, a former member of the New Orleans City Council, said they had never met them. After Louisiana Attorney General Buddy Caldwell issued an opinion that the state cannot recall federal officials, Butler and Young announced that they would pursue the matter in the federal courts. Young's ability to criticize Cao was mocked by Times-Picayune columnist James Gill because of Young's 11 convictions for fraud and identity theft.
On March 1, 2009, the Times-Picayune reported that Obama had tried to reach Cao on his cellphone prior to the vote on the stimulus package but was unsuccessful; Cao acknowledged that Obama "might have been persuasive" with a "concrete commitment" to help the 2nd district and New Orleans. Cao stated that the Obama administration's $410 billion omnibus spending bill for the final 7 months of Fiscal Year 2009 (ending September 30, 2009) "would provide important benefits for his 2nd Congressional District" and became one of 16 Republicans voting in favor of that bill.
On February 25, 2009, Cao grabbed headlines by announcing that his staff members were investigating the Federal Emergency Management Agency (FEMA) office in New Orleans. Cao, whose aversive relationship with the agency had started during his time as a community activist for victims of Hurricane Katrina, accused FEMA of a host of malfeasance charges, including "widespread complaints of discrimination, sexual harassment, ethics violations, nepotism and cronyism." Cao conveyed his concerns to the Obama administration's Homeland Security Secretary Janet Napolitano, who promised that "we will obviously follow up." The next day Cao's call for the resignation of Doug Whitmer, head of FEMA's New Orleans office, was bolstered by United States Senator Mary Landrieu, whereupon the story spread on CBS News. Popular reaction quickly pervaded New Orleans blogsites, one of them calling its discussion FEMA having a Cao. On February 27, 2009, acting FEMA Director Nancy L. Ward replaced Whitmer with Tony Russell, previously an administrator in FEMA's Denver office. Ward stripped Jim Stark of his immediate responsibilities for Louisiana's FEMA district, leaving him as FEMA assistant administrator for Gulf Coast recovery. Cao had also been critical of John Connolly, FEMA chief for Gulf Coast public assistance, whom Stark cited as his source of information on "how much public-assistance money FEMA should approve for local projects" (in a congressional hearing with Cao on February 25, 2009). Connolly was previously with FEMA's Philadelphia office, and Cao asked rhetorically, "How many times has Philadelphia been hit by a hurricane?" On March 5, 2009, Cao joined Napolitano, Jindal, Housing and Urban Development Secretary Shaun Donovan, Louisiana Lieutenant Governor Mitch Landrieu, U.S. Representative Charlie Melancon, and other federal, state, and local officials on a tour of damaged areas in New Orleans, including the campus of Southern University at New Orleans (SUNO), where the group was led by SUNO President Victor Ukpolo. Eleven days later, on March 16, Cao again visited the SUNO campus, pledging full support of Ukpolo's mission to rebuild the campus. The seguing event on Cao's agenda during the same day was a fund-raising cocktail party at the home of bankers Stephen and Dana Hansel at which the admission contribution was $1000 a person and an unexpected guest was former Speaker of the House Newt Gingrich who was en route to lead a discussion in James Carville's political science class at Tulane University. The Times-Picayune, in an editorial on March 19, 2009, praised Ukpolo and Cao in their efforts to secure funding for restoration of SUNO's campus.
Cao was the only Republican to vote for the draft Affordable Health Care for America Act (H.R. 3962) on November 7, 2009. Yet Cao, because of concerns of alleged public funding for elective abortion provisions, joined the rest of his party in opposing the final version, the Patient Protection and Affordable Care Act.
Cao is more fiscally conservative. He voted against President Obama's proposed stimulus package in 2009. He also voted against the Democratic-backed Lily Ledbetter Fair Pay Act.