WASHINGTON (Reuters) - President Barack Obama's Democrats may be headed for a train wreck on November 2, but his own re-election bid in 2012 would face a brighter path if a grindingly slow economic recovery picks up steam.
How Obama navigates a starkly different political landscape in Washington over the next two years and whether the ailing U.S. economy rebounds will go a long way toward determining his standing when he asks Americans for four more years at the next presidential election.
"If the economy is still in bad shape in the spring of 2012, that really spells problems for the president because this election will be fought over whether the economy has recovered or not," said Andy Smith, a political science professor at the University of New Hampshire.
Washington politics will likely get more difficult for Obama after the November 2 congressional elections, with Republicans seemingly poised to take control of the House of Representatives and cut the Democratic majority in the Senate.
Pressure will be on Obama and lawmakers to find ways to inspire confidence in the economy, resolve the mortgage foreclosure crisis, spur business investment and create jobs.
Many of the new wave of Republicans will be of the conservative, Tea Party variety, wanting to slash spending and cut the government down to size. This will make any new stimulus initiatives difficult to achieve, such as Obama's $50 billion proposal for infrastructure projects.
With Americans in an anti-Washington mood, political battles between Obama's Democrats and Republicans are a strong possibility over taxes, spending and deficits.
Will the larger presence of Republicans force Obama to move from the left to the center and compromise with his opponents, as President Bill Clinton did after the 1994 Republican revolution when his Democrats were trounced in the midterm congressional elections?
"We're about to learn a lot about Barack Obama," said William Galston, who was a policy adviser to Clinton. "If he is as eager to be a transformative president and do big things as he is said to be, then he will probably send his administration off on a different course. But we don't know anything yet."
REPEAT OF 1996?
This White House -- and Republicans too -- are well aware of the history. Clinton rolled to re-election in 1996 after compromising with Republicans on such items as welfare reform.
Most experts predict a confrontation fairly soon between the Obama White House and Republicans over the size and direction of the budget deficit of some $1.3 trillion and whether to extend Bush-era tax cuts.
Obama will fight to protect his signature healthcare overhaul, which Republicans want to repeal, and his revamp of financial regulations. He also wants to advance legislation to address climate change, which many Republicans view as a national energy tax.
But some agreement could be possible on spending cuts.
"Republicans want to reduce spending and debt. If the president becomes interested in that, I think he'll find us a willing partner," Senate Republican leader Mitch McConnell told Reuters this week.
Both sides need some victories to take to their constituents, so there is possibility of compromise.
This could include a scaled-backed energy plan, perhaps taking steps to promote nuclear power, which Republicans want, in exchange for the Democratic priority of green investments.
Obama last week told a television audience that "there are a lot of good Republican ideas out there."
Sniping from the sidelines will be potential Republican challengers to Obama in 2012. The road to the presidential proving grounds of Iowa and New Hampshire is already well-trod by more than a dozen possible Republican candidates.
The group ranges from Tea Party champion Sarah Palin to former Massachusetts Governor Mitt Romney and Minnesota Governor Tim Pawlenty.
Experts believe Obama would match up well against any in this group -- if the economy is on the mend and the jobless rate is trending downward from its current 9.6 percent.
But he has a long way to go. Obama's approval rating on the economy was 38 percent in a CBS News poll on Tuesday.
"If it's 'morning in America' by the end of next year, he's in fine shape. If it's midnight and things are getting worse it doesn't mean he can't win, but then it becomes a much bigger challenge," said Norm Ornstein, a political expert at the American Enterprise Institute.
While administration officials believe Obama will enjoy an improving economy in 2012 and that Americans by then will see the benefit of his policies, Republicans see a weakness in Obama they will try to exploit in his coming campaign.
"The fundamental problem that he's going to have is explaining to the country why he campaigned as a post-partisan centrist and governed like a typical spendthrift," said Republican pollster Whit Ayres.
(Editing by Eric Beech)
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