Republican House, Senate gains pose peril and opportunity for Obama

Facing what will be a more Republican and hostile Congress, Barack Obama will begin a new chapter in his presidency following the midterm elections-one filled both with pitfalls and opportunities as he struggles to enact his policies and prepares to run for reelection in two years.

These election results will leave Obama in a bind. With television networks projecting a GOP takeover of the House of Representatives, Obama suffers a brutal blow. The conservative chairmen of House committees will have no love for Obama's agenda. Enacting measures that he hopes to get passed--such as an expansion of health care to include those left uncovered by this year's landmark legislation or an increase in educational benefits through a plan to aid community colleges--now seem impossible. Those proposals will probably have to be re-crafted or abandoned altogether. Indeed, he's likely to face an all-out assault to repeal his health-care bill--although it's one his veto pen can probably nix.

Meanwhile, resisting Republican goals--such as an extension of the Bush tax cuts for people at all income levels--will become much harder too. Those tax cuts are due to expire at the end of 2010, and the president supports renewing them only for income under $250,000 per year. The Republicans now seem likely to be able to peel off enough Democrats to pass their version of the cuts. That would force Obama to either sign a measure he initially opposed or veto a bill that contains much of what he wants, consigning everyone to an income- tax hike--something likely to make him even more unpopular. Going forward, the important Ways and Means Committee in the House will shift from one Michigander to another, from Sander Levin to Dave Camp.

On a range of other measures--such as presidential appointments including a possible Supreme Court vacancy--the president will likewise have a much harder time dealing with what will be a more Republican Senate.

Indeed, the Senate had been troublesome enough for Obama when the Democratic Caucus had 60 members (including the independents Joe Lieberman of Connecticut and Bernie Sanders of Vermont). For instance, the cap-and-trade measure designed to reduce greenhouse gases that cause global warming, passed in the House, but stalled there. With more Republican senators, more measures are likely to meet a similar fate in a body that, because of procedural obstacles, often requires 60 votes to pass a bill rather than a mere 51. One of the incoming Democratic Senators, Joe Manchin of West Virginia, ran a campaign ad in which he shot the cap-and-trade bill with a rifle.

On the other hand, Republican gains could present the politically wounded president with a chance to recalibrate and recover just as Bill Clinton did in 1995, when he rebounded from a devastating midterm and went on to handily win reelection in 1996. Clinton benefited from a Republican party that overreached by dramatically attempting to cut the growth of Medicare. That led to a showdown between the president and the Republicans and a shutdown of the government.

The result? The Congressional Republicans became immensely unpopular. What's more Clinton, at the behest of his political advisor Dick Morris (who was enlisted after the midterm defeat), used his legislative agenda to distinguish himself--or "triangulate," in Morris's words--from congressional Democrats. Clinton passed a dramatic welfare-reform plan over the objections of many Democrats and with Republican help-all of which left him in a much better position for reelection in 1996.

In an interview with National Journal last month, the president said that he wanted to govern with "humility" and he cited education, energy and infrastructure as areas where he could cooperate with Republicans. For his part, Senate Republican Leader Mitch McConnell, in a separate interview with National Journal, said he also would be humble going forward.

For his part, Ronald Reagan recovered strongly from the 1982 midterm elections which cost him 26 House seats under economic circumstances that were arguably as grim as what faces Obama. Two years later, Reagan was reelected in a 49-state landslide. In the 1986 midterms, Reagan watched the Republicans lose control of the U.S. Senate after eight seats became Democratic. Still, in 1989 the 40th president finished his second term strongly with arms control treaties with the Soviets and relatively high popularity.

Whether Obama can be as politically nimble as Clinton or Reagan and whether the Republicans will exceed their mandate remains to be seen. On Wednesday, the president will have his first opportunity to signal any re-adjustments when he holds a press conference in the East Room of the White House to discuss the election results. If he's at all like Clinton, he'll signal his willingness to work with the new Republican leadership and save a combative tone for another day. On election night, the president monitored the results from the residence of the White House.

If he's looking to Clinton for an example, the president may also consider a serious staff realignment. While he kept his Chief of Staff Leon Panetta, he brought in Morris as a near parallel chief of staff. Of course, Rahm Emanuel, Obama's chief of staff, has already departed and other senior staff, such as David Axelrod, his top political advisor, will head for the campaign in 2011. But it's entirely possible that other seats may change hands. Obama will send a signal of his intentions when he announces a replacement for Larry Summers as head of the National Economic Council.

Despite Clinton and Reagan's recovery, the prospects are not good for Obama. Midterm defeats in 1966, 1978, 1990, and 2006 presaged the party in power losing the White House. What is certain is that Obama, who ran on hope, now needs to worry about survival.

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