Republicans in high-stakes challenge to Obama

By Matthew Bigg - Analysis

ATLANTA (Reuters) - Republicans in Congress may be playing a high-risk game by flexing their muscles and snubbing a popular new U.S. president who very publicly sought their support.

They denied President Barack Obama, a Democrat, even one vote for a more-than-$800-billion economic stimulus plan in the U.S. House of Representatives, urging him to cut both government spending and people's taxes.

The plan passed the House on Wednesday and another bill will likely pass the Senate next week before lawmakers hammer out a joint bill likely to clear both Democratic-controlled houses by mid-February.

Hewing a tough conservative line may please Republican supporters outside Washington for the moment but the strategy could backfire in the long term if perceived as an obstacle to economic recovery.

"The minority party is ... searching for ways to be relevant and maybe this is a way for them to do it," said Phil Smith, political director of the Concord Coalition, a non-partisan organization that promotes fiscal responsibility.

In doing so, they acknowledge a short-term risk. Obama's popularity is high and a Pew Research Center poll shows the economy is the dominant issue for voters.

Republicans want to show they are the party of low taxes and small government -- and resisting Obama's package is a way to prove it. But Obama isn't giving up. He has sought their support and will keep on trying, the White House says.

RISKS FOR REPUBLICANS

It's a risk. If the package revives the economy, Republicans could face elections for Congress in 2010 saddled with the burden of having opposed crucial legislation.

Complicating matters is a feeling among some conservatives they squandered their reputation for being careful with public finances under President George W. Bush, Obama's predecessor for eight years that ended on January 20.

Many Republicans believe that although Bush cut taxes, he violated the twin party goals of small government and restrained spending.

Democrats are quick to say Republican lawmakers played a leading role in the shift to big spending since after all they controlled Congress for six of the eight years Bush held office.

"Republicans failed to stick to their principles while in office," said Kelly McCutchen, vice president of the Georgia Public Policy Foundation, an independent think tank that promotes limited government and economic freedom.

Conservatives argue their hard line on the economic stimulus bill is an opportunity to return to the principles that underpinned their electoral success.

Republicans are further struggling with how to position themselves as winners, having lost control of Congress in 2006 and the presidency in November when Obama defeated Republican Senator John McCain.