The GOP, I think. The next two years were going to be hard ones, and the worst thing for them would be to have control over the legislative branch. This way, the Democrats retain some legislative responsibility, while they still get to give Obama a black eye with a historic wave.
Who loses? As I've said, I wasn't too enthused about the notion that America needed a Democratic legislature to deal with the gigantic problems facing America. It may be better for nothing to get done than for either party to have the ability to enact their wish lists.
The biggest wild cards are on tax cuts and health care. On tax cuts, as someone who thinks that we're going to need to let the Bush tax cuts go in order to address America's mounting entitlement problem, I think the worst-case scenario is that the GOP manages to bully their way to a full repeal. But perhaps optimistically, I think there's at least a chance of a best-case scenario: in the Congressional stalemate, the Bush tax cuts expire.
On health care, I think it's likely that the GOP will try to defund much of the health care bill, while leaving the pre-existing condition rules, and perhaps the addition of adult children to their parents' health insurance. If that happens, health care reform will collapse under its own weight, perhaps taking the US insurance market down with it.
Can they do it? If they're very smart and strategic, confining their defunding to health care, maybe. I expect that Obama and the Senate Democrats would turn it into a showdown, but unlike in 1995, I suspect that the GOP might win that one, politically: the blame would accrue to Democrats who just won't back down on an unpopular health care plan, rather than Republicans who overreached.
But I somehow doubt that the GOP will manage to be that smart and strategic. If there's a shutdown, I expect it will be over a laundry list of issues, and they'll be much more vulnerable in the general election, even as individual members shore up their right flank.
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