Republicans run the House — now what?

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With Republicans having recaptured the House of Representatives and Democrats retaining a slim margin in the Senate, life will be different for the Obama White House, beginning even before the 112th Congress is sworn in next January.

For one thing, the Illinois Republican who swiped Barack Obama’s former Senate seat, Mark Kirk, takes his seat right away — the result of a special election — meaning that immediately, the Democratic majority drops to 58 seats. For another, the “lame duck” session of the current Congress is still to come, with important business left to do before the end of the year. So what do Democrats and the White House have to look forward to?

An ugly “lame duck” session

The question of whether or not to extend the Bush tax cuts of 2001 and 2003 will be front and center in the lame duck session. President Obama wants to extend the tax cuts only for families making $250,000 a year or less, while Republicans have vowed to make all of the tax cuts permanent, including for the top 2 percent income earners, as well as to extend former President George W. Bush’s temporary abolition of the inheritance tax. Combined, those extensions would at $4 trillion to the deficit over ten years without corresponding spending cuts, according to the Congressional Budget Office.

Harry Reid, who won a surprise victory over tea party favorite Sharron Angle in Nevada Tuesday night, punted the issue to the parting Congress. And since the tax cuts were written to expire at the end of the year, the debate won’t wait until the next Congress is seated in January.

WATCH SEN. HARRY REID ON ‘MORNING JOE’:
[MSNBCMSN video=”http://www.msnbc.msn.com/id/32545640″ w=”592″ h=”346″ launch_id=”39985041″ id=”msnbcd6965″]

Expect the lame duck session to be brutal, as dozens of defeated Democrats in the House (many of them conservative “blue dogs” who favored extending the tax cuts) and cautious Senate Democrats weigh whether to cut a deal for a temporary extension of the cuts, while also having to agree to a budget for the coming year, decide whether to extend adjustments to the Alternative Minimum Tax, and re-enter the always contentious debate over whether to extend unemployment benefits set to expire at the end of the month. The White House must also decide how much of a fight it wants so soon after a midterm election that signaled that a significant portion of the country wants to see a change in direction. And Republicans have already tossed around the idea of a government shut-down.

Health care reform

One of the signature battles of the coming year will be over health care reform, which will play out both in the courts, where 15 states are suing to stop the bill from taking effect, and in Congress, where Republicans have vowed to repeal it. With a majority in the House, the GOP could take the first steps. Even short of repeal, which would likely fail in the Senate, or be vetoed by the president, House Republicans could hack away at reform by choking off funding to enforcement provisions of the bill.

Republicans promised repeal as part of their “Pledge to America,” and the Tea Party freshmen will likely hold them to it. But senior Republicans, particularly in the Senate, would dearly like to hang on to the popular provisions of reform, such as the ban on using pre-existing conditions to deny insurance coverage. Still, with the Tea Party base in full revolt against what they call “Obamacare,” the GOP may have no choice but to at least try for full repeal. That could be risky with voters who are now beginning to see the benefits kick in.

Investigations

The Republicans poised to take over leadership positions in the House are among the most conservative, and the most aggressive members of the caucus. California Rep. Darrell Issa, who will lead the House Government Reform Committee, is already promising to launch investigations into the White House appointment of “czars” to oversee various agencies, and to limit their power. Armed with subpoena power, House Republicans like Issa could bury the administration in hearings into everything from Fannie Mae to the Fox News report of a pair of New Black Panthers members who stood outside a polling place, to the president’s birth certificate, and some Democrats worry Issa could even be on a mission to try and find grounds to impeach the president.

The Social Security debate

Former President George W. Bush has said his biggest regret is not pushing through the privatization of social security, which to most observers means partial or full privatization of the program. The 112th Congress could be the first to give privatization a serious try. President Obama has impaneled a debt commission that is looking at ways to balance the federal budget, with possible social security adjustments on the table. But the debate won’t be easy, or pretty. Several in-coming House and Senate members, including Florida’s tea party star Marco Rubio, have expressed support for ideas like raising the retirement age, or creating “private social security accounts,” all ideas Bush put forward during his administration, but which proved deeply unpopular with the public.

2012

Perhaps the silver lining for the White House out of Tuesday’s defeats in the House is that starting in January, Republicans can no longer simply be the party of no. They now have a responsibility for governing, and will share in the credit, and the blame, for the state of the nation and the economy.

Another upside: tea party characters like in-coming Rand Paul of Kentucky, or House members like Michele Bachmann and Florida’s newly elected Rep. Allen West, whose statements and affiliations have often brought them attention — and not always of the positive kind — could provide the president with a welcome foil. The contrast between Tea Party, now officially a part of Washington, and Obama, particularly if they float ideas or rhetoric that come across as extreme, could ironically help Obama at re-election time.