Assuming there is an election in November, I expect Republicans to take the House or come very close to it. The Senate will remain in Democrat hands by a smaller margin.
Assuming the Dems lose one or both houses of Congress, the odds are better than 50/50 they will employ their nuclear option to use a lame duck session of Congress to pass amnesty, cap & trade, and possibly additional regulations on the internet which over time the bureaucracy can use to stifle free speech and commerce on the internet. I don’t see them attempting to pass the VAT in the lameduck session.
In January the new Congress will be elected. The President and the Democrats will immediately begin talking about the need to deal with the deficit while at the same time continuing to propose new spending programs and expansion of existing programs. The expiration of the Bush tax cuts will result in lower economic activity and higher unemployment. At least 2 or 3 states will come to the federal government for a bailout (California, Michigan, Massachussetts perhaps). The mantra from the White House and media will be the economic crisis and the obstructionist Republican Congress. We heard the prelude to this in Obama’s Saturday speech in which he bashed Republicans for not extending unemployment benefits.
I fear under this pressure, the Republican Congress will buckle and compromise. They’ll agree to a VAT and higher retirement age for Social Security which will enrage small business and the conservative base. Any new taxes will be blamed on the Republican Congress. The nightly mainstream news will be filled with stories of people suffering because the Republican Congress is too stingy to vote for Obama’s big spending programs.
By the 2012 elections the economy will still be in deep recession if not depression. The tax increases, lack of capital creation, and high regulatory burden will have crushed the small businesses which create most new private sector jobs. The barriers to starting new businesses will be so high many unemployed people will not even try to start up a new business, defaulting to government assistance.
For Obama the loss of his big Democrat majorities in Congress are the perfect setup for 2012. The economic misery will intensify after the election. By 2012 people will want change and he will tell them the Republican Congress is the source of their misery. Plus, if he gets amnesty for illegals passed in the lame duck session with a quick path to citizenship (or if he delivers amnesty through an executive order), he will have millions of new grateful voters in 2012 to provide the winning margin of victory.
Unfortunately, polls show his support at over 40% despite the economy. He only needs to shift 10% of the voting population, not 30%.
I agree;if/when the Dims lose the house,they’ll have some lovely parting gifts for the American people during the lame duck session.