Republicans see opportunities in 2010

By Steve Holland - Analysis

WASHINGTON (Reuters) - When Republicans see signs that Americans are having doubts about President Barack Obama's healthcare proposals and economic policies, they see opportunity as they plot strategy for 2010 elections.

Cuffed around in the 2006 and 2008 elections by Obama's Democrats, the Republican Party is looking for a way out of the political wilderness and many in the party think Obama himself may hold the key.

While Obama is not up for re-election until 2012, the congressional elections in November 2010 are likely to be seen as a referendum on his leadership.

Democrats believe an economic rebound and a healthcare insurance deal will put Obama in a stronger position by the time the 2010 election rolls around.

But with the U.S. economy still limping along and Americans worried about trillions of dollars of new spending to rescue it and pay for a healthcare overhaul, Republican leaders say the party stands a chance to pick up seats in the Democratic-controlled House of Representatives and the Senate.

Former Massachusetts Governor Mitt Romney, a potential 2012 Republican presidential candidate, told Reuters that it was vital for Republican candidates in 2010 to "not just talk about our principles but hold true to them."

"We're a party that doesn't believe in spending money we don't have. And Republicans that can show that they have been fiscally conservative will stand in stark contrast to the extraordinary deficits and forecasts of even greater deficits that are coming from the Democrats," said Romney, who ran for president last year and lost the party's nomination to John McCain.

A rally in Washington this month by thousands of people opposed to Obama's policies was a sign of a re-energized Republican base.

At the same time Obama's popularity has dropped, with independent voters who often hold the key to elections showing more skepticism at his healthcare plans and deficit spending.

'FAR OUTSIDE OF THE MAINSTREAM'

Representative Eric Cantor, the No. 2 Republican in the House, said Republicans could win 40 seats to seize control of the House.

"I have thought all along that the agenda that has emerged from this White House, which also seems to have its roots in the speaker's office (House Speaker Nancy Pelosi), will strike Americans as being far outside of the mainstream of what this country is all about," Cantor said in an interview.

Democrats point out that deficits soared under Republican President George W. Bush, aided and abetted by Republicans in Congress. They say Obama has simply been cleaning up the mess he inherited from Bush.

And they say that while Republicans may like their chances now, expected improvement in the U.S. economy and a likely victory of some sort in the healthcare debate this year will put some wind in Obama's sails and help Democrats.

"The fact is that Obama inherited two wars, an economy that was in the toilet, a banking system that was near collapse and record home foreclosures," said Democratic strategist Bud Jackson.