* Republicans pick up at least 60 in House, 6 in Senate
* Wall Street cheers Republicans' victory
* Obama, Boehner, Reid to talk about outlook
(Recasts, adds new quote from Boehner, market reaction)
By Andy Sullivan
WASHINGTON, Nov 3 (Reuters) -- U.S. President Barack Obama
faced a bleak political landscape on Wednesday after voters
punished Democrats for the sluggish economic recovery and
handed control of the House of Representatives to Republicans.
Democrats managed to retain control of the Senate even as
Republicans strengthened their ranks, which could herald an
extended legislative stalemate when the new Congress begins
work in January.
From tax cuts to housing, Obama's hand is weakened. He will
have to fend off attempts to repeal his healthcare and Wall
Street reforms and will face an aggressive pushback against
Major new initiatives on climate change and immigration are
probably off the table. [ID:nN0315887]
"The ability of this administration to get major new
programs done was already limited. This just seals the deal,"
said Jaret Seiberg, policy analyst with the investment advisory
firm Washington Research Group.
Top News-U.S. elections link.reuters.com/fyq86p
TAKE A LOOK on elections [ID:nUSVOTE]
PDF on the election link.reuters.com/faq52q
Web page here
Republicans picked up at least 60 House seats, far more
than the 39 they needed for a majority that would elevate John
Boehner to House speaker and put Republicans in charge of House
committees. Many races remained too close to call.
It is the biggest shift in power since Democrats lost 75
House seats in 1948.
'DO THINGS DIFFERENTLY'
Republicans portrayed Obama and his fellow Democrats as big
spenders who recklessly ran up massive deficits and extended
the reach of an intrusive government. The charge seemed to
resonate with voters who have been battered by the deepest
recession since the 1930s.
"It's pretty clear the American people want us do something
about cutting spending here in Washington and helping to create
an environment where we'll get jobs back," Boehner told
reporters at the Capitol.
Obama made a late-night call to congratulate Boehner and
discuss ways they could work together to create jobs and
improve the economy, a Boehner aide said.
The president was due to hold a news conference at 1 p.m.
EDT (1700 GMT) to talk about the post-election landscape.
Boehner and other Republican leaders were to hold a press
conference at the Capitol at 11:30 a.m. (1530 GMT).
Senate Democratic leader Harry Reid, who survived a
high-profile challenge in Nevada, was scheduled to speak at 2
p.m. EDT (1800 GMT) about the Senate outlook.
The No. 2 Senate Democrat, Dick Durbin, said no significant
legislation would pass without input from Republicans.
"We need to move beyond filibusters and enter a real
conversation about passing legislation that this country
needs," he told Reuters.
While Republican candidates have pushed an agenda of
aggressive spending cuts and a repeal of Obama's reforms, they
will have trouble overcoming the president's veto pen.
A clash looms over the budget deficit, which hit nearly 9
percent of gross domestic product last year.
"What is unclear is whether or not the Obama administration
is willing to cut any deals with the Congress in the next two
years," said Israel Klein, a lobbyist at the Podesta Group.
Stocks extended gains on Wednesday after rising for months
on the prospect that increased Republican influence would
result in a less aggressive Congress. But even though a divided
Congress is seen as bullish for stocks, because it makes
passing new laws more difficult and lessens uncertainty for
business, investors will be looking for signs of compromise.
"Gridlock is good but there are issues that have to be
addressed such as creating jobs and improving the economy,"
said John Canally, an investment strategist with LPL Financial
in Boston. "We have seen a lot of pointing fingers in this
election -- if the two sides show their willingness to
cooperate in these press conferences, that will be what the
market will be really looking for."
Republicans eyeing a presidential challenge to Obama in
2012 should not read too much into the election results, said
Ipsos pollster Cliff Young.
"They say very little -- if nothing -- about Obama's
electoral prospects," Young said. [ID:nN03272002]
TEA PARTY EFFECT
Conservative grass roots activists associated with the Tea
Party movement shook up the Republican Party earlier this year
when they toppled some incumbents deemed not conservative
enough and replaced them with less experienced, more
Tea Party favorites won in Florida, Utah and Kentucky,
ensuring an influx of conservative views in the staid chamber.
But the movement may have prevented Republicans from
winning the Senate, as voters rejected Tea Party-backed
candidates in Nevada, Delaware and West Virginia.
Exit polls found voters deeply worried about the economy,
with eight in 10 saying it was a chief concern. Nearly
three-quarters believed government did not function properly,
and four in 10 said they supported the Tea Party.
The Republican rout extended from coast to coast and
knocked at least 30 Democratic incumbents out of the House.
In the Senate, Republicans gained six seats, including
seats in Indiana, Wisconsin, North Dakota, Pennsylvania and
Arkansas as well as Obama's former seat in Illinois.
Senate races in Colorado and Washington were too close to
The three-way race for the Republican-held Alaska Senate
seat also was too close to call, with incumbent Lisa Murkowski
running as an independent write-in candidate against Tea Party
favorite Joe Miller and Democratic challenger Scott McAdams.
Republicans picked up at least 10 governorships from
Democrats, including the battleground state of Ohio, and seized
control of at least 17 state legislatures from Democrats.
The victories give them control over the once-a-decade
process of redrawing congressional districts that begins next
year and could help the party extend its electoral
(Additional reporting by John Whitesides, Thomas Ferraro,
Richard Cowan and Kim Dixon in Washington, and Angela Moon in
New York; Editing by Leslie Adler)