Democrats get warning shot for 2010 elections

WASHINGTON (Reuters) - The Obama White House on Wednesday attempted to play down election losses in Virginia and New Jersey in contests that analysts said served as a warning shot to Democrats looking ahead to 2010 voting.

Voters voicing fears over the weak U.S. economy elected Republicans in state governors races in Virginia and New Jersey on Tuesday, dealing defeat to Democratic candidates despite President Barack Obama's personal campaigning for them.

Instead of dwelling on those races, the White House sought to emphasize a Democratic victory in an upstate New York congressional race that exposed divisions within the Republican Party.

Republicans, on the other hand, were ecstatic, saying they were gaining strength and hoping to build momentum for the 2010 U.S. congressional elections after devastating losses in 2006 and 2008.

"The Republican renaissance has begun," said Michael Steele, chairman of the Republican National Committee.

The development took place a year after Obama won a resounding victory to become America's first black president, and many Americans are expressing impatience that the change he promised has yet to bear fruit.

Political analysts said the voting should ring some alarm bells for Democrats looking ahead to the 2010 congressional elections next November, when Americans vote their choice for each seat in the 435-member U.S. House of Representatives and a third of the 100-member Senate.

The party in power typically loses seats in the first election after a new president takes office, giving Obama's Democrats a challenge in trying to defend their strong majorities in Congress.

Norm Ornstein, a political expert at the American Enterprise Institute, said the Democrats' loss of independent voters on Tuesday, after winning them handily in Obama's election in 2008, could create a "frisson of fear" and complicate Democratic efforts to gain passage this year of an overhaul of the U.S. healthcare system.

"I would guess the biggest problem the Democrats have right now is there is skepticism among independents about the healthcare plan and about the spending," Ornstein said.

Health insurers gained as investors bet the election results could slow the president's drive for healthcare legislation. The Morgan Stanley Healthcare Payor index was up nearly 5 percent.

Peppered with questions about the implication of the defeats, White House spokesman Robert Gibbs told reporters the governors races turned on "local issues that didn't involve the president" such as property taxes in New Jersey.

But he acknowledged that economic issues were definitely on voters' minds. The U.S. jobless rate has reached 9.8 percent despite a $787 billion economic stimulus measure and other steps Obama has taken to try to improve the economy.

"I think voters are concerned about the economy," Gibbs said. "I don't think the president needed an election or an exit poll to come to that conclusion."

However, Julian Zelizer, a political science professor at Princeton University in New Jersey, said the anti-incumbent mood expressed on Tuesday and economic unease may have wider implications for the Democrats in 2010.

"Democrats need to be nervous about other states," he said.

REPUBLICANS FACE QUESTIONS ALSO

Republicans faced some difficult questions as well.

Voters elected a Democrat in New York's 23rd congressional district after conservatives forced out the Republican candidate and tried but failed to elect one of their own with the help of such conservative figures as Sarah Palin, last year's Republican vice presidential nominee.

"The race for New York's 23rd district is not over, just postponed until 2010," Palin said on her Facebook page. "The issues of this election have always centered on the economy, on the need for fiscal restraint, smaller government, and policies that encourage jobs."

Gibbs said the victory in New York, as well as a Democratic win in a House seat in California, was more relevant to Obama. "There are two congressional seats that got filled last night. Those are people that will take place in participating in the president's agenda. Democrats won both those seats," he said.

(Additional reporting by Caren Bohan and Patricia Zengerle in Washington and Jon Hurdle in Philadelphia)