2012: Economy, GOP Set Tone Of Presidential Race Washington's new balance of power may lead to either conflict or compromise. How Obama and the GOP get along may decide the next election — if the economy doesn't do it for them.

2012: Economy, GOP Set Tone Of Presidential Race

President Obama's chances for political recovery over the next two years depend upon forces that may be largely outside his control. One is the economy, and the other is the way Republicans play the stronger hand they've just been dealt.

The economy is likely to be as big a factor in 2012 politics as it has been this year. If the job market were to pick up, Obama's approval ratings and prospects for re-election would improve markedly. For now, though, the economy remains weak.

And Republicans are likely to interpret their thumping victory in Tuesday's congressional elections as more than just a mandate to continue opposing Obama's policies. They may see their new majority in the House and their gains in the Senate as a clear sign they have momentum and can beat him two years from now.

"Across the country right now, we’re witnessing a repudiation of Washington, a repudiation of big government," John Boehner of Ohio, the presumptive new House speaker, said at an election night rally.

Cue More Rancor

"Republicans will perhaps misinterpret this election as predicting a win in 2012," says Larry J. Sabato, director of the University of Virginia Center for Politics. "Midterms do not predict the following presidential election."

In fact, history suggests the opposite is often the case. Still, Republican hopes for taking the White House and the Senate two years from now may lead to near-constant confrontation with the president.

The Republican leaders in both the House and Senate indicated in the campaign's closing days that they have little interest in pursuing compromise with Obama.

"If they think they can win in 2012, their sole goal is to paste as many defeats on Barack Obama as they can," says Allan Lichtman, a historian at American University. "They've made that clear."

Republicans may sense that they can continue to gain strength by denying Obama victories. But now that they control a chamber of Congress, they may share or inherit the blame for gridlock in Washington, creating a possible opening for Obama.

The Clinton Playbook

As Lichtman notes, in three midterm elections since World War II, the president's party lost control of Congress during his first term -- 1946, 1954 and 1994. In each case, the president was re-elected two years later.

"While it's not a good thing, losing a midterm election, it is by no means a harbinger of doom," Lichtman says.

Many political observers are already wondering what Obama will learn from the experience of President Bill Clinton. After Democrats lost their congressional majorities in 1994, Clinton convinced the public that GOP leaders were to blame for a subsequent budget battle that led to a government shutdown.

After that, Clinton and GOP congressional leaders learned to work together, presenting shared victories to voters in 1996. Both retained power.

"The model sitting right in front of President Obama is Bill Clinton, obviously," says Whit Ayres, a Republican political consultant. "He figured out ways to work with Republicans and had, in many ways, the most productive two-year period of his presidency."

A Choice Between Conflict And Compromise

But things may not play out that way this time around. Obama may not seek ways to compromise, as Clinton ultimately did. He may instead continue to push an ambitious domestic agenda and seek to blame Republicans for its failure, or try instead to burnish his leadership credentials on the world stage.

"It will be fascinating to watch Obama try to pick his way, step by step, in the 112th Congress," says Burdett A. Loomis, a University of Kansas political scientist. "He doesn't yet, at least, have the kind of raw, political acumen that Clinton had."

Republicans, for their part, are likely to be emboldened by the success of their anti-Obama message during the recently concluded campaign. The new GOP House majority will continue to challenge Obama's policies, while using their investigative powers to keep up the pressure on the president.

"It will be subpoena city, so he will be on the defensive," says George C. Edwards III, a political scientist at Texas A&M University.

Republicans Line Up For 2012

The sense that Obama is vulnerable means that the field of possible Republican presidential prospects -- which is already large -- will expand further, GOP consultant Ayers says.

During most presidential years, Republicans have coalesced early behind a vice president or some other heir apparent. At this point, though, the party has no such obvious candidate.

"Republicans tend to elect the next guy in line," says Grover Norquist, president of Americans for Tax Reform and a GOP activist, "but we have two competing narratives of who is next in line."

One narrative holds, according to Norquist, that it's Mitt Romney's turn. The former Massachusetts governor ran the last time around, finishing behind Sen. John McCain. But, Norquist suggests, it may be that the party's on-deck circle is occupied by former Alaska Gov. Sarah Palin.

"Everybody I talk to thinks of her as the outside person," Norquist says, "but there's an argument that she's the establishment, next-in-line person. She's not out of nowhere -- she was the vice presidential candidate."

GOP Faces Off -- With Itself

Romney and Palin -- assuming they run -- will be at the head of a long line of other governors and lawmakers. Whittling down the field may make this year's contentious GOP primaries seem tame.

Social issues, which did not play a large role in political debates this year, may re-emerge, with evangelicals playing a disproportionately large role in the early primary and caucus states.

Republican voters have already displayed a propensity this year for rejecting establishment-anointed choices in favor of insurgent conservatives. "These people are not going to be particularly cooperative about moving to the center," says Ruy Teixeira, an elections analyst at the Center for American Progress, a progressive think tank.

But a nominee beloved by the party faithful in 2012 could be left high and dry by the more centrist electorate typical of a presidential election year.

"One of the statistics that's interesting about this election is the high proportion of the electorate that is identifying itself as independent," says Stephen Wayne, a government professor at Georgetown University. "If that proportion remains high, there will continue to be a lot of volatility in elections."

Whom Will Independents Favor?

Losing the support of independents became a big problem for Obama and his fellow Democrats this year. The two parties will have the next two years to win their affections.

That won't be easy for either Democrats or Republicans. Obama and the Democratic Senate may get nowhere trying to move legislation on key issues, such as immigration and climate change, through the Republican House. Meanwhile, GOP hopes of undoing Obama's signature health care law will run into what Norquist calls the president's "veto pen-slash-baseball bat."

Obama will attempt to defend the health care law and his other achievements against both GOP repeal efforts and public complaints about its import and effect.

But It Still Comes Down To The Economy

But while Obama needs to do a better job of framing his policies as part of a thematic whole that the public can embrace, Teixeira says, his fate still depends largely on the state of the economy.

"The main thing he needs to come back is for the economy to get better and for people to feel better about his administration," Teixeira says.

"If there's absolutely no improvement in the economy," he adds, "Republicans can run a puppy dog for president in 2012 and have a chance to win."