Democrats seek historic gains, challenges

By Thomas Ferraro

WASHINGTON (Reuters) - Democrats are headed toward historic gains in Tuesday's congressional elections, polls show, as well as herculean challenges afterward on matters from war to Wall Street.

Due largely to the unpopularity of President George W. Bush and the worst U.S. economic crisis since The Great Depression, Democrats may expand their control of the Senate and House of Representatives to the highest levels in decades. They even have a shot at a Senate majority big enough to prevent Republicans from blocking legislation with procedural hurdles.

Democrats may need that kind of clout to quickly deliver on campaign promises they forged with their presidential nominee, Barack Obama, who according to polls appears on track to defeat Republican rival John McCain.

"Democrats will have a brief moment to celebrate, and then will have to get to work fast," said Paul Light of New York University's Center for the Study of Congress.

Said Rep. Chris Van Hollen of Maryland, chairman of the House Democratic campaign committee: "Expectations will be high."

"We're going to move full speed ahead, but we have to manage expectations and explain we can't get it all done overnight," Van Hollen said.

Democrats held a majority in Congress the past two years. But when they tried to advance many of the issues on their agenda, like expanding health care or withdrawing U.S. troops from Iraq, they were repeatedly stymied by Bush's veto pen or Senate Republican procedural roadblocks known as filibusters.

Even with expanded power in Congress and control of the White House, Democrats face unprecedented fiscal restraints that will limit what they can accomplish.

"The problems are huge, and there are a lot of things that Obama and Democrats want to do," said Andrew Taylor, a political science professor at North Carolina State University. "But there's only so much money in the pot."

Democratic campaign promises include ones to move the United States toward energy independence, stimulate the economy, reduce taxes for the middle class, roll back tax cuts for the rich and begin to withdraw U.S. troops from Iraq and redeploy many of them to Afghanistan.

Complicating these efforts will be a record federal deficit, Washington's newly enacted $700 billion financial industry bailout and the growing threat of an economic recession.

Also, Democrats will need to build coalitions between their liberal, moderate and even somewhat conservative wings, particularly on taxes and any new big spending programs.

There are also differences to be resolved among Democrats on such matters as energy, with some pushing for more offshore drilling while others are cool to it.

Democrats are expected to increase federal regulation of the troubled U.S. financial services industry and enact legislation vetoed by Bush to expand stem-cell research and a federally backed children's health insurance program.

PRESSURE FOR RESULTS