Democrats can hope for and fear big win

By Thomas Ferraro - Analysis

WASHINGTON (Reuters) - With just weeks to go before the November 4 elections, Democrats have reason for hope and fear.

They may win both the White House and U.S. Congress for the first time in 16 years, and then face pressure to deliver on expensive campaign promises amid projected record federal deficits certain to swell by the Wall Street meltdown.

Democrats concede that if they fail to quickly lower energy prices, revive the economy, withdraw troops from Iraq, expand health care and ensure that financial markets are adequately regulated, voters may likely put Republicans back in charge of the Senate and House of Representatives in the 2010 elections.

"If we get in in 2009 and we don't solve people's problems, they will kick us out as quickly as they put us in," said Sen. Charles Schumer of New York, head of the Senate Democratic campaign committee.

It has happened before. The last time Democrats won the White House, House and Senate was in the 1992 elections. Two years later, voters put Republicans back in the charge of both chambers of Congress. But Schumer says he's "optimistic."

"People are demanding change and I think you'll see one of the most productive sessions (of Congress) if we pick up a good number of seats in the House and Senate," he said.

While Democrat Barack Obama and Republican John McCain are locked in a close presidential race, polls show Democrats headed toward expanding their control of Congress. They now hold the House 235-199 with one vacancy and the Senate 51-49.

Democrats are expected to gain up to 15 House seats. Analysts predict they will pick up as many as six Senate seats but fall short of the total 60 needed to clear Republican procedural hurdles, meaning they will have to negotiate -- or face more gridlock.

"You can't make a law without passing something through the Senate. And the way you do that since time began has been to work across the aisle," said Senate Republican leader Mitch McConnell.

True. But with more Democrats in Congress and the public demanding change, Obama hopes to gain the support of enough Republicans to enable him to advance his legislative agenda.

His campaign vows include: revamping financial regulations; rolling back tax cuts for the rich; cutting taxes for the middle class; plugging tax loopholes that he says encourage U.S. companies to move overseas, taking American jobs with them, and curbing global warming. Democrats want to move quickly.

"We want to demonstrate right out of the box that elections make a difference," said Rep. Chris Van Hollen of Maryland, chairman of the House Democratic campaign committee.

SWELLING DEFICITS

But unprecedented federal deficits -- caused largely by President George W. Bush's tax cuts and an increase in federal spending, particularly for the wars in Iraq and Afghanistan -- may limit what anyone can do.

The Congressional Budget Office recently projected the U.S. budget deficit rising to a record $438 billion next year. That's certain to increase as the government moves toward buying hundreds of billions of dollars in bad debt to stem the worst U.S. financial crisis since the Great Depression some 70 years ago.