The economic pattern of the early 1980s may well be repeated. The US economy is likely to start to recover strongly, with a growth rate of more than 5 per cent expected this month.

But it looks increasingly doubtful that Mr Obama and the Democrats will enjoy the benefits. Having won Massachusetts, the Republicans will have no compunction in claiming that what saved the US economy was the conservative backlash. If the Democrats fail to challenge them, this is the version of reality that American voters will start to believe.

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The majority party normally loses seats in midterm elections, but the Republican resurgence of recent months is more than a conventional midterm rebound. How can a little known Republican run a competitive Senate campaign in Massachusetts? The culprit is the unpopularity of health reform, and it means that Democrats will face even worse problems later this year in less liberal places than Massachusetts.

We have polled voters in 11 states likely to have competitive Senate races in November on how they feel about health reform and how they might vote in November. The interviews were conducted from Jan. 6-11 with 500 registered voters in Arkansas, Colorado, Connecticut, Delaware, Florida, Louisiana, Missouri, Nevada, North Dakota, Ohio and Pennsylvania. The polls were conducted by YouGov using a panel of Internet users selected to be representative of the registered voters in each state.

Health reform is more popular in some of these states than in others. Where it’s popular, Democratic candidates don’t have too much of a problem, but where it’s unpopular””and that includes most states””the Democratic Senate candidates are fighting an uphill battle. Support for health reform varies in these 11 states from a low of 33% in North Dakota to a high of 48% in Nevada. Democrats trail Republicans in six of the states; three are toss-ups; and in two, Democrats have a solid lead.

Read it all from yesterday’s Wall Street Journal.

No wonder the White House was surprisingly nice in its first public statements about Scott Brown’s victory in the Massachusetts campaign. After all, Brown’s victory just handed Obama what he needs to win his own campaign for reelection as president in 2012.

From Truman to Clinton, embattled presidents have seen a path to reelection by running against the Senate and House. Of course, that’s usually because those legislatures are in the hands of the other party. But Obama now has a chance to run against an obstructive Senate that contains””oh, the shame of it””less than a supermajority of his own party. It’s the best of both worlds….

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As Senate Democrats reconvened Wednesday at the Capitol in the wake of their devastating loss in Massachusetts, they vowed to press ahead toward enacting a health-care bill, possibly with a scaled-back package of provisions that could gain Republican support.

But Democrats cautioned that discussion of such plans is just getting underway. “We’re not going to rush into anything,” said Senate Majority Leader Harry M. Reid (Nev.). “Remember, the bill we passed in the Senate is good for a year. There are many different things that we can do to move forward on health care, but we’re not making any of those decisions now.”

Scott Brown’s victory in a special election Tuesday “changes the math in the Senate,” Reid conceded. But just as Democrats face new pressures to reach across the aisle, he added, GOP senators must be willing to meet halfway.

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With Democrats reeling from the Republican victory in the Massachusetts special Senate election, President Obama on Wednesday signaled that he might be willing to set aside his goal of achieving near-universal health coverage for all Americans in favor of a stripped-down measure with bipartisan support.

“It is very important to look at the substance of this package and for the American people to understand that a lot of the fear-mongering around this bill isn’t true,” Mr. Obama said in an interview on ABC News. “I would advise that we try to move quickly to coalesce around those elements of the package that people agree on.”

He continued: “We know that we need insurance reform, that the health insurance companies are taking advantage of people. We know that we have to have some form of cost containment because if we don’t, then our budgets are going to blow up and we know that small businesses are going to need help so that they can provide health insurance to their families. Those are the core, some of the core elements of, to this bill.”

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If you believe some of the blogs, the Democrats lost Massachusetts, and Obama’s approval is plummeting nationwide, because he alienated his left-wing base. Perhaps that does account for an absence of turnout among young voters in the Virginia gubernatorial or Massachusetts Senate races, but the polls have not shown growing dissatisfaction among young, minority, or liberal voters–the three voting blocs that accounted for Obama’s strongest support in 2008. Where he has lost ground–and where the Democrats have lost ground–is primarily among white working and middle-class voters and senior citizens.

The Suffolk University poll in Massachusetts, which like the PPP poll, was pretty much on target in the final result, singled out two white working-class towns, Gardner and Fitchburg, as bellwethers. Obama won Gardner, where Democrats hold a three-to-one registrations edge, by 59 percent to 31 percent in 2008. Brown won it by 56 percent to 42 percent. Obama won Fitchburg, with a similar Democratic edge, by 60 percent to 38 percent in 2008. Brown won it by 59 percent to 40 percent. That suggests a fairly dramatic shift among white working class voters.

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DJ reports Senate Democrats are to seek an increase to the federal government’s borrowing limit by $1.9 trillion lifting the total amount the U.S. government can owe to $14.294 trillion, several congressional aides said. The increase is forecast to support the federal government’s borrowing needs the end of 2010, one Senate Democratic aide said. The borrowing hike comes soon after a $290 billion increase to the debt ceiling agreed to by lawmakers at the end of 2009.

Sen. Russ Feingold (D-Wis.) told a local reporter, “It’s probably back to the drawing board on health care, which is unfortunate.” Rep. Bill Delahunt (D-Mass.) told MSNBC this morning he will advise Democratic leaders to scrap the big bill and move small, more popular pieces that can attract Republicans. And Anthony Weiner (D-N.Y.) said his leadership is “whistling past the graveyard” if they think Brown’s win won’t force a rethinking of the health care plan.

Sen. Evan Bayh (D-Ind.), who now might draw a challenge from Rep. Mike Pence (R-Ind.), said the party needs to rethink its entire approach to governing.

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….the Massachusetts vote is a loud and clear signal that the American people hate this legislation. Barack Obama came into office assuming that economic distress would move most Americans to favor big-government legislation. It turns out that’s not so. Not when Democratic bills would take away the health insurance most of them are content with. Not when it’s the product of backroom deals and blatant political bribery.

But Scott Brown’s victory was not just a rejection of Democrats’ health care plans. Brown also stoutly opposed the Democrats’ cap-and-trade legislation to reduce carbon emissions. He spoke out strongly for trying terrorists like the Christmas bomber in military tribunals, not in the civil court system where lawyers would advise them to quit talking. He talked about cutting taxes rather than raising them as Democrats are preparing to do.

Brown’s victory represents a rejection of Obama administration policies that were a departure from those of the Bush administration. In contrast, on Afghanistan, where Obama is stepping up the fight, Brown backed Obama while his hapless left-wing opponent Martha Coakley was forced (her word) to oppose it to win dovish votes in the Democratic primary.

Democrats will be tempted to dismiss Brown’s victory as a triumph of an appealing candidate and the rejection of an opponent who proved to be a dud. But Brown would never have been competitive if Americans generally favored the policies of the Obama administration and congressional Democratic leaders. In that case, even a dud would have trounced the man who drives a truck.

Read the whole thing.

Voter anxiety and resentment, building for months in a troubled economy, exploded like a match on dry kindling in the final days of the special election for US Senate. In arguably the most liberal state in the nation, a Republican – and a conservative one at that – won and will crash the Bay State’s all-Democratic delegation with a mandate to kill the health care overhaul pending in Congress.

It is difficult to overstate the significance of Scott Brown’s victory because so much was at stake. From the agenda of President Obama and the legacy of the late Edward M. Kennedy to a referendum on the Democratic monopolies of power on Capitol and Beacon hills, voters in a lopsidedly Democratic state flooded the polls on a dreary winter day to turn conventional wisdom on its head.

Brown, an obscure state senator with an unremarkable record when he entered the race four months ago, was a household name across the country by the end of the abbrevi ated campaign. Running a vigorous, smart, and error-free campaign, he became a vessel into which cranky and worried voters poured their frustrations and fears, ending the Democrats’ grip on a Senate seat the party has held for 58 years, nearly all by two brothers named Kennedy.

Voters were demonstrably unsentimental about keeping alive the spirit of the late Ted Kennedy in electing the next senator. His widow, Victoria Reggie Kennedy, tried to bolster the sagging candidacy of Democratic Attorney General Martha Coakley in the closing days, to little effect.

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The Democratic Party’s defeat in Massachusetts on Tuesday — the loss of a single, crucial Senate seat — will force President Obama and his congressional allies to downscale their legislative ambitions and rethink their political strategy.

The most immediate challenge facing Democrats after Republican Scott Brown’s victory is how to salvage healthcare legislation now that they no longer have the 60 votes needed to break GOP filibusters.

But even as Massachusetts voters streamed to the polls to anoint Sen. Edward M. Kennedy’s successor, Democratic leaders showed no signs of standing down.

“We’re right on course,” House Speaker Nancy Pelosi (D-San Francisco) said after meeting with her leadership team. “We will have a healthcare reform bill, and it will be soon.”

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Scott Brown, a little-known Republican state senator, rode an old pickup truck and a growing sense of unease among independent voters to an extraordinary upset Tuesday night when he was elected to fill the Senate seat that was long held by Edward M. Kennedy in the overwhelmingly Democratic state of Massachusetts.

By a decisive margin, Mr. Brown defeated Martha Coakley, the state’s attorney general, who had been considered a prohibitive favorite to win just over a month ago after she easily won the Democratic primary.

With all precincts counted, Mr. Brown had 52 percent of the vote to Ms. Coakley’s 47 percent.

“Tonight the independent voice of Massachusetts has spoken,” Mr. Brown told his cheering supporters in a victory speech, standing in front of a backdrop that said “The People’s Seat.”

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Republican Scott P. Brown pulled off one of the biggest upsets in Massachusetts political history last night, defeating Democrat Martha Coakley to become the state’s next US senator and potentially derailing President Obama’s hopes for a health care overhaul.

The stunning, come-from-behind victory caps a dramatic surge in recent days as Brown, a state lawmaker from Wrentham once thought to have little chance of beating a popular attorney general, roared ahead of Coakley to become the first Republican senator elected from Massachusetts since 1972.

With 100 percent of precincts reporting, Brown had won 51.9 percent to Coakley’s 47.1 percent. Independent Joseph L. Kennedy received 1 percent.

Coakley called Brown to concede a little more than an hour after polls closed, and the Brown campaign party erupted into jubilant cheers soon after.

Read the whole article.

Republicans scored an historic victory overnight that put President Barack Obama’s agenda in jeopardy exactly a year after he took power – and could kill health-care reform.

A little-known Republican state legislator came from a 30-percentage point deficit to win Edward Kennedy’s old seat in the US Senate in Massachusetts in what appeared to be a massive protest vote against the party that controls both chambers of Congress and the White House.

“This is a huge wake-up call for the Democrats, for the Obama Administration and the country. America is fed up of the arrogance coming from Washington,” said Andy Card, White House chief of staff in the George W. Bush Administration.

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From here:

In many ways the campaign in Massachusetts became a referendum not only on health care reform but also on the openness and integrity of our government process. It is vital that we restore the respect of the American people in our system of government and in our leaders. To that end, I believe it would only be fair and prudent that we suspend further votes on health care legislation until Senator-elect Brown is seated.

Turnout was heavy Tuesday as Massachusetts voters trudged through a light snow to choose their next U.S. senator, one who could determine the fate of the Democrats’ health care overhaul plan and much of President Barack Obama’s domestic agenda.

Late polling by the campaigns indicated the race between Democratic state Attorney General Martha Coakley and Republican state Sen. Scott Brown was too close to call. However, a Suffolk University poll of three key towns Saturday and Sunday ”” Fitchburg, Gardner and Peabody ”” gave Brown a comfortable lead in each.

Read it all. Brown at 81.8 on Intrade at present, Coakley at 20.0.

“Scott Brown has turned this into a referendum on what’s going on in Washington, especially with health care. His campaign began to gain traction when he said that, ‘I am going to be the 41st senator, the one who can stop a lot of this,’ ” [David] Gergen said.

—CNN

An interesting list–we shall see.

The White House’s announcement yesterday that it will schedule its State of the Union address for next Wednesday, January 27th, an earlier date than most insiders expected, is surely not coincidental and reflects a desire to pressure the House into voting for the Senate’s version of the health care bill almost immediately, assuming that Scott Brown defeats Martha Coakley in Massachusetts tonight.

The pitch that the White House and Nancy Pelosi will make to the Democratic members of the House is a difficult one and will need to be extremely well executed, but is likely to consist of one or more of the following arguments….

Read it all.

Interesting stuff on the Special Massachsuetts Senate Election. Also, if you want there is a way to follow it in live chat.

Right now Brown is in the 70’s on Intrade. I am remaining cautious.

Brown at 79.0, Coakley at 26.4.

The uncertainty surrounding the suddenly-too-close-to-call Massachusetts Senate special election, as well as its high stakes, has political handicappers and strategists wondering if maybe they’ve seen this one before – in 1991, when long-shot Democrat Harris Wofford seized on the health care issue to pull off a shocking Pennsylvania special election victory that sent tremors across the political landscape.

It’s hard not to notice the similarities between the 1991 Senate special election and the current Massachusetts Senate contest.

Much like Republican Scott Brown in Massachusetts, Wofford, a little-known Democrat who had been appointed to the late Republican Sen. John Heinz’s seat, began the race as a distinct underdog, and few expected he would be able to overcome former Gov. Dick Thornburgh, who left his post as U.S. attorney general to run for the seat.

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Read it all. I see over on Intrade that Brown is up to 70 and Coakley is down to 30. It will be stunning if it holds–KSH.

Even if Democrats lose the Jan. 19 special election to pick a new Massachusetts senator, Congress may still pass a health-care overhaul by using a process called reconciliation, a top House Democrat said.

That procedure requires 51 votes rather than the 60 needed to prevent Republicans from blocking votes on President Barack Obama’s top legislative priorities. That supermajority is at risk as the Massachusetts race has tightened.

“Even before Massachusetts and that race was on the radar screen, we prepared for the process of using reconciliation,” said Chris Van Hollen of Maryland, chairman of the Democratic Congressional Campaign Committee.

“Getting health-care reform passed is important,” Van Hollen said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend. “Reconciliation is an option.”

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The last price (at present) is 47, -14 on the day.

The White House has reached a tentative agreement with labor leaders to tax high-cost health insurance policies, sources said Thursday. The agreement clears one of the last major obstacles on the path to final passage of comprehensive health care legislation.

White House press secretary Robert Gibbs said health care negotiators are “very, very close” to an overall deal and hope to have resolved most of their differences by day’s end. But White House officials privately cautioned that their optimism does not mean that a final health care deal will be formally announced Thursday.

Four labor negotiators briefed lawmakers on the parameters of the deal at a luncheon at the Capitol. Lawmakers said the agreement would raise the cost of unusually generous health policies and ignore secondary coverage, such as vision and dental plans. Health plans negotiated as part of collective-bargaining agreements would be exempt for two years after the 2013 effective date, giving labor leaders time to negotiate new contracts.

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David Walker, chief executive officer at Peter G Peterson Foundation and former U.S. Comptroller, talks with Bloomberg’s Carol Massar and Matt Miller about the U.S. financial crisis.

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