WASHINGTON The Congress was headed for political gridlock after Tuesday's midterm elections, posing a challenge as the country struggles to get out of the economic doldrums.
Voters disenchanted at unemployment swept Republicans into control of the House of Representatives, yet left the Senate in Democratic hands.
A Republican House will be able to ram through conservative legislation on simply majority votes, including measures to shrink government and cut taxes.
But a Senate still held by President Barack Obama's Democrats could stop those bills, including an anticipated repeal of Obama's overhaul of U.S. healthcare.
The rise of Tea Party conservatives like Florida's Marco Rubio and Kentucky's Rand Paul bodes ill for the chances of Republicans working with Obama on the economy.
"The newly elected crop of House and Senate Republicans will see their mission as not to compromise and cut deals with President Obama, but rather to destroy his remaining agenda and undo healthcare and financial services reform," said Ethan Siegal, an analyst with The Washington Exchange.
Obama called John Boehner, the likely next speaker of the House, and said he was 'looking forward to working with him and the Republicans to find common ground, move the country forward and get things done for the American people,'" the White House said.
The two parties face a busy agenda of economic issues including whether to extend tax cuts implemented under former president George W. Bush, cutting the $1.3 trillion deficit and creating jobs.
Senate Majority Leader Harry Reid, a favorite target for Tea Party Republicans who accuse him of being a fossilized Washington insider, appeared in no mood for compromise after narrowly winning re-election.
"The bell that just rang isn't the end of the fight; it's the start of the next round," he said in his victory speech in Nevada.
Dan Ripp of Bradley Woods, a private firm that tracks Washington for investors, said he expects Congress to move to the right, reflecting the position of American voters.
"That would force the president to decide if he will become more moderate and work with it," Ripp said. "We don't know what the president will ultimately do. We will find out."
Dick Durbin, the assistant Senate Democratic leader, acknowledged his party needed the opposition.
"It means no significant legislation will pass without input from Republicans," Durbin told Reuters.
"We need to move beyond (Republican) filibusters and enter a real conversation about passing legislation that this country needs," Durbin said.
(Editing by Eric Walsh)