captioning sponsored by macneil/lehrer productions >> lehrer: good evening. i'm jim lehrer. republicans pledged to cut spending and seek a smaller, more accountable government a day after their historic takeover of the house. >> ifill: and i'm gwen ifill. on the newshour tonight: president obama took responsibility for voters' frustrations and called for compromise. we wrap up yesterday's victories, defeats and races still not called. >> lehrer: newshour political editor david chalian fills us in on the hows and whys of republican wins and democratic losses. >> ifill: we hear what party leaders had to say today, starting with the republican likely to be the next speaker of the house, john boehner.

>> republicans have made a pledge to america, and our plenty is to listen to the american people. and the focus on their priorities, and that's exactly what we're going to do. >> lehrer: and we'll have excerpts from president obama's news conference at the white house. that there's no doubt as i reflect on the results of the election, it underscores for me that i've got to do a better job, just like everybody else in washington does. >> ifill: then, jeffrey brown examines the federal reserve's latest action to jump start the troubled economy and how politics will play its part. >> lehrer: plus, mark shields and david brooks offer their day-after election analysis. that's all ahead on tonight's newshour. major funding for the pbs newshour has been provided by:

chevron.

>> and by the bill and melinda gates foundation. dedicated to the idea that all people deserve the chance to live a healthy productive life. this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> ifill: political aftershocks echoed in washington and around the country today after republicans scored resounding victories in the mid-term elections. the democratic majority in the house of representatives lay in ruins, and the two sides began to assess what it all means. in a decided swing of the

political pendulum, republicans regained control of the house just four years after losing it. ( cheers and applause ) and although democrats retained a narrow majority in the senate, the g.o.p. also made aggressive inroads in that chamber, as well as in the nation's state houses. by the time the dust settled early today, republicans has scored the largest party turnover in 70 years, picking up at least 60 seats in the house by decimating democratic strongholds in the south and midwest. a handful of races still haven't been called. ( cheers and applause ) house minority leader john boehner, the likely next speaker of the house, was the face of the republican rout. he grew emotional last night as he recounted the path to victory. >> i've spent my whole life chasing the american dream.

>> ifill: among those ousted: a number of veteran democratic leaders, including 17-term missouri congressman ike skelton; 15-term minnesota lawmaker james oberstar; 16-term budget committee chairman john spratt of south carolina; and 13-term pennsylvania congressman paul kanjorski. in the senate, republicans picked up at least six seats, and by late this afternoon two races-- in alaska and washington state-- remained too close to call. >> give michael bennett a big big round of applause. >> ifill: and colorado incumbent michael benett was only able to claim victory this afternoon, although his opponent republican ken buck had yet to concede. >> change is hard. we can't get it done overnight, but we can get it done together. this definitely a race for the record books. >> back to work for the people of nevada. >> ifill: in one of the most watched races of this election season, senate majority leader harry reid managed to survive a tight contest in nevada.

next on his agenda, he said: finding middle ground. >> the founding fathers in their wisdom said that the house of representatives should be different from the senate. and the only way you can get things done today in the senate and in 1789 in the senate was with compromise. you have to work together. i'm hopeful and confident that when the dust settles, the republicans will no longer want to stop everything. >> ifill: reid defeated tea party-backed republican sharron angle. >> and we the people have been awakened over the last 20 months. and it's been an incredible journey from being asleep to being awakened to constitutional principle and to love of country that i've never seen. >> ifill: democrats were not as lucky in the president's home state of illinois, where republican mark kirk bested obama favorite alexi giannoulias.

>> we are 800 miles from any ocean, but a tsunami just hit the heartland! ( cheers and applause ) >> thank you, pennsylvania! ( cheers and applause ) >> ifill: and in the keystone state, republican pat toomey defeated another democratic hopeful, congressman democrat joe sestak. >> we've got to end the threats of the excessive government regulation and the huge, out of control role that washington has begun to play. >> ifill: the roll call of casualties continued throughout the night: arkansas senator blanche lincoln losing to republican john boozman; wisconsin republican ron johnson beating three-term democrat senator russ feingold. >> my friends, the people of wisconsin have spoken, and i respect their decision. i've called ron johnson and congratulated him and... ( audience boos ) ...and wished him well as our senator. and i also offered my help and the help of my staff in any transition.

>> ifill: but in west virginia, democratic governor joe manchin held onto the senate seat formerly held by robert byrd. and in connecticut, attorney general richard blumenthal defeated wrestling executive linda mcmahon. the anti-establishment tea party movement claimed victories in several key races. in florida, marco rubio beat back a challenge from democrat kendrick meek as well as from governor charlie crist, who switched parties to run as an independent. today, rubio said voters were sending a strong message. >> you better not go up there and become like everybody else we've voted for, because if you do, you'll never get a third chance, and more importantly, our country will suffer. >> ifill: and in kentucky, republican rand paul beat democrat jack conway. >> we've come to take our government back! ( cheers and applause ) >> ifill: but some tea party candidates fell short, including delaware's christine o'donnell, who lost to democrat chris coons.

>> so tonight i pledge to you, to all the working families cross delaware, that i will work tirelessly to get our state and our nation back on track. >> ifill: the same tide that swept congressional republicans into office also transformed governors' mansions. republican businessman rick scott claimed victory in an extremely tight florida governor. >> with this election, they sent a message loud and clear. they said, "let's get to work." ( cheers and applause ) >> ifill: overall, ten >> ifill: overall, 11 governorships flipped from democrat to republican, pennsylvania and ohio among them. >> we don't owe anything to anybody. we're going to do it the right way and turn the page on american politics! >> ifill: and voters also engineered a change in power in the nation's state legislatures, with at least 18 state legislatures switching to republican from democrat-- a net gain of 500 seats.

after months of rancorous debate and neck and neck competition, the voters finally got their say yesterday. to understand the message they sent, we take a look now at who voted how and why, with newshour political director david chalian. get some sleep last night, david? >> a very little bit, about the same much as you. >> ifill: enough. the last several weeks we heard the president going around the country saying if you vote for me in the way you did in 2008 we can win this thing. obviously that didn't happen. who showed up and who didn't for the democrats? >> one calculation today showed that 29 million of his voters from 2008 did not show up. 29 million voter dropoff from the obama vote. but you're right, the base voters he was targeting very hard. take a look at the democratic base, you have 18 to 29-year-olds over the course of the last three elections, 2006 the young people made up 12% of the electorate. in 2008 a presidential year they jumped up to 18%, back down to 11%. so it didn't work there. didn't work with the african-americans, they moved back down to 10%, their normal

my term turnout. and hispanics moved back down to 8%, so that $30 million effort, gwen, that the dnc put in to touch the first-time obama voters, young people, african-americans, his panics, it did not increase their participation from 2006. >> ifill: so it was just normal mid term turnout. >> and they needed that presidential style turnout to try to keep this wave at bay. >> ifill: if you look at the voters nationally there wasn't that much increase in turnout. but in nevada, for instance, where harry reid held on, i made a difference? >> nevada made the clearest difference. first they had record turnout, 16% in nevada, was hispanic and harry reid long claimed to be the best get out the vote operation in the country. i think his margin of victory was probably true and a lot of it had to do with the latino voters. >> ifill: republicans mounted anti-establishnt tea party

fueled assault on the democratic majority, and it seemed to work. how did they do it? >> the tea party fueled the energy. but the biggest effect for the republican party was being able to win over independents. take a look at these numbers, about independent voters,. in 2006 when democrats swept into control of the house, independents split 57% for democrats, 38%, sorry, 39% for republicans. 2010 the exact flip, 56% of independents went to republicans 38% went to democrats. that right there is the biggest story of the election. >> ifill: who are these independents? >> they claim to be moderate, sort of in the middle of the road. they live in the suburbs, they live throughout the midwest, they live obviously throughout the whole country. but they're not your partisan rabble rousers, they are the swing vote. so in 2006 and 2008 when things were going the democratic way it was because they had ins on their side. the president and the democratss with the spending, the deficit

issues that was top of mind, economy and jobs, lost, communicating to independent voters lost their ability to sway them to their cause. >> ifill: so they were saying do something about my under water mortgage, do something about the jobless rate and they were not getting that answered. >> you couldn't be more spot on. 41% of the voters that went to the polls yesterday said they are worse off financially, their whole financial situation is worse than it was two years ago. of those people, they favored republicans by 30% of the vote. the republicans were able to tap into and speak to the people who felt the economic pressure that so many americans are feeling the last couple years. >> ifill: when you take a look at the guys who were thrown out and you realize how long the collective amount of time they had all been in washington, you wonder whether this was a vote for the republicans or just against the people who were there. >> there's no doubt there was an element of just cleaning house, get everyone out of there that's in charge , and obviously the democrats were in charge of a lot more seats. because we did see these old

dogs go, not just the freshmen, sophomores who had collected a lot of republican turf and were sitting in places that perhaps democrats didn't belong because of those big waves in 2006 and 2008, but you saw that taped piece that when you have something like ike skeleton or john separate, the budget chairman go, it didn't matter what you record was, didn't matter where your votes were. what mattered was that there was a d after your name and the opposition was able to paint you as part of please -- pelosi-obama. >> ifill: the house and senate are different bodies, we're going to hear from the president saying something like that as well. is that part of the message as well, that there's this huge demand for bipartisanship? or are people saying we just don't want to do what you want. >> how about this number, 74% describe themselves as dissatisfied or even angry at the way government works. broken, a broken government what is the electorate was screaming about and there's no doubt that part of what they said with their vote is, please get it

together, folks in washington, we want you to start working in a way that actually affects our lives in a positive way so we don't have to sit here and scream that we're angry at a protect en government. 74% of the country angry or dissatisfied with government, that's just a number that no incumbent party can beat back successfully. >> ifill: and that no one can afford to ignore. david chalian, thanks again. >> my pleasure. >> lehrer: and now to today's news conferences. first, the republicans. house speaker-to-be john boehner, senate minority leader mitch mcconnell and mississippi governor haley barbour held their event at the capitol. here are some excerpts. >> as you've heard me say last night, we are humbled by the trust that the american people have placed in us. and we recognize this is a time for us to roll up our sleeves and go to work on the people's priorities: creating jobs, cutting spending and reforming the way congress does its business. it's not what... it's not just what the american people are demanding, it's what they are

expecting from us. and the real question now is this: are we going to listen to the american people? republicans have made a pledge to america, and our pledge is to listen to the american people and to focus on their priorities. and that's exactly what we're going to do. last night, the president was kind enough to call me. we discussed working together on the american peoples' priorities: cutting spending, creating jobs. and we hope that he will continue to be willing to work with us on those priorities. but as i said last night, the new majority here in congress will be the voice of the american people, and i think we clearly expressed that last night. we're going to continue and renew our efforts for a smaller, less costly and more accountable government here in washington, d.c. >> we're determined to stop the agenda americans have rejected and to turn the ship around.

we'll work with the administration when they agree with the people and confront them when they don't. choosing... i think what our friends on the other side learned is that choosing the president over your constituents is not a good strategy. this election yesterday was clearly a referendum on the administration and the democratic majority here in the congress. ignoring the voters and their wishes, as you could see during the entire two-year period, produces predictable results. i would say to our friends on the other side of the aisle, and listening to what they've had to say this morning, they may have missed the message somewhat. i get the impression they're thinking... their view is that we haven't cooperated enough. i think what the american people were saying yesterday is that they appreciated us saying no to the things that the american people indicated they were not

in favor of. so i think the group that should hopefully get the message out of yesterday's elections is our friends on the other side of the aisle, and we hope that they will pivot in a different direction. work with us on spending, trade agreements and nuclear power and clean cold technology and other things the president has said that he's for, yet most of my members are for. >> on behalf of the republican governors, while governors' races may be thought of as being separate or very different from what's going on in washington, in this case, even in governor's races, this election was a referendum on obama's policies. and the policies of the obama administration, the pelosi-reid congress, were repudiated by the voters. governors-- and i would say a lot of democratic governors, i believe, will agree with this--

going forward, governors believe that we can work with the congress to try to set things in a better direction. >> how do you see yourself integrating all the tea party activism into the structure of the house? >> what... what unites us as republicans will be the agenda of the american people. and if we're listening to the american people, i don't see any problems incorporating members of the tea party along with our party in... in the quest that's really the same. >> mr. boehner, mr. leader, i know that all of you-- and, senator mccconnell, this is for you, too-- i know that all of you have been reading about '94 and how, you know, the mistakes and pitfalls of your colleagues that you were actually part of. i wonder how... what are the lessons you take away from that? how will you govern differently this time? and, senator mcconnell, how does it affect what you will do in the senate if you don't have a majority? >> well, i think clearly the election yesterday did not

transfer full control of the government to the opposition. it was a first step in the direction of changing what we've been doing in washington. there are two opportunities for that change to occur. our friends on the other side can change now and work with us to address the issues that are important to the american people, that we all understood. or further change, obviously, can happen in 2012. >> we know that house republicans are pledged to repeal and replace the president's health care reform. you've got an upcoming appropriations process. do you plan to try and use that appropriations process to defund the... the reform law? >> listen, i believe that the health care bill that was enacted by the current congress will kill jobs in america, ruin the best health care system in the world and bankrupt our country. that means that we have to do everything we can to try to repeal this bill and replace it with common-sense reforms that'll bring down the cost of

health insurance. >> leader boehner, next congress looks like one of the first early tests will be increasing the debt limit. tea party... the wave of tea party candidates, they'll likely oppose that. how will you work with them to achieve that? >> we'll be working that out over the next couple of months. >> mr. boehner, there is, you know, differing points of view in your conference about what to do about earmarks, what to do about the debt limit. mr. cantor and mr. mccarthy have a vote up or down to raise or not raise the debt limit here. how are you going to be able to operationally do some of these things when there are competing factions in your conference on what to do on key issues? >> well, that's what the transition's for: give us a little time to figure out how we do those big things that need to be done on behalf of the american people. >> ifill: a short time later, president obama met reporters in the east room of the white house. >> some election nights are more fun than others. some are exhilarating; some are humbling.

but every election, regardless of who wins and who loses, is a reminder that, in our democracy, power rests not with those of us in elected office, but with the people we have the privilege to serve. i told john boehner and mitch mcconnell last night i am very eager to sit down with members of both parties and figure out how we can move forward together. i'm not suggesting this will be easy. i won't pretend that we will be able to bridge every difference or solve every disagreement. there's a reason we have two parties in this country, and both democrats and republicans are... have certain beliefs and certain principles that each feels cannot be compromised. so on... on a whole range of issues, there are going to be areas where we disagree. i think the overwhelming message that i hear from the voters is that we want everybody to act responsibly in washington; we

want you to work harder to arrive at consensus; we want you to focus completely on jobs and the economy and growing it, so that we're ensuring a better future for our children and our grandchildren. and, you know, i think that there's no doubt that, as i reflect on the results of the election, it underscores for me that i've got to do a better job, just like everybody else in washington does. so with that let me take some questions. >> i'm wondering, sir, if you believe that health care reform that you worked so hard on is in danger at this point and whether there's a threat as a result of this election. >> if the republicans have ideas for how to improve our health care system, if they want to suggest modifications that would deliver faster and more

effective reform to a health care system that, you know, has been wildly expensive for too many families and businesses and certainly for our federal government, i'm happy to consider some of those ideas. so there are going to be examples where i think, you know, we can tweak and make improvements on the progress that we've made. that's true for any significant piece of legislation. but i don't think that if you ask the american people, should we stop trying to close the doughnut hole that will help senior citizens get prescription drugs, should we go back to a situation where people with pre- existing conditions can't get health insurance, should we allow insurance companies to drop your coverage when you get sick even though you had been paying premiums, i don't think that you'd have a strong vote for people saying, you know, those are provisions i want to eliminate. >> president bush, when he went through a similar thing, came out and he... he said this was a thumpin', and you talked about

how it was humbling, or you alluded to it perhaps being humbling. and i'm wondering, when you... when you call your friends... >> mm-hmm. >> ...like congressman perriello or governor strickland and you see 19 state legislatures go to the other side, governorships in swing states, the democratic party set back... >> mm-hmm. >> ...what does it feel like? >> it feels bad. ( laughter ) you know, the toughest thing over the last couple of days is seeing really terrific public servants not have the opportunity to serve anymore, at least in the short term. and you mentioned... there are just some terrific members of congress who took really tough votes because they thought it was the right thing, even though they knew this could cause them political problems.

with respect to the... the tax cut issue, my goal is to make sure that we don't have a huge spike in taxes for middle-class families. so my goal is to sit down with speaker-elect boehner and mitch mcconnell and harry and nancy sometime in the next few weeks and see where we can move forward in a way that, first of all, does no harm; that extends those tax cuts that are very important for middle-class families, also extends those provisions that are important to encourage businesses to invest and provide businesses some certainty over the next year or two. and how that negotiation works itself out i think it's too early to say. >> so you're willing to negotiate? >> absolutely. i think it's important to... to point out as well that, you know, a couple of great

communicators, ronald reagan and bill clinton, were standing at this podium two years into their presidency, getting very similar questions because, you know, the economy wasn't working the way it needed to be. and there were a whole range of factors that made people concerned that maybe the party in power wasn't listening to them. you know, this is something that i think every president needs to go through because the... you know, the responsibilities of this office are so enormous and so many people are depending on what we do. and in the rush of activity, sometimes we lose track of, you know, the... the ways that we connected with folks that got us

here in the first place. and that's something that... now, i'm not recommending for every future president that they take a shellacking like... like i did last night. ( laughter ) you know, i'm sure there are easier ways to learn these lessons. but i do think that, you know, this is a growth process and an evolution. and the relationship that i've had with the american people is one that built slowly, peaked at this incredible high, and then during the course of the last two years as we've together gone through some very difficult times, has gotten rockier and tougher. and, you know, it's going to, i'm sure, have some more ups and downs during the course of me being in this office. >> lehrer: we have more politics coming, including how today's federal reserve actions fit into the election picture, and

shields and brooks. but first, the other news of the day. here's hari sreenivasan in our newsroom. >> reporter: supporters of legalizing marijuana fell short tuesday in california. 54% voted "no" to allowing possession of pot for recreational use. opponents of the idea hailed the outcome. >> we knew that voters weren't going to buy into this. so we're glad that the california voters made the right decision. they made a responsible decision for california. and, you know, certainly the last thing we need in california is to be broke and stoned. so, thank goodness that's not going to be the case. >> reporter: california voters also refused to delay greenhouse gas regulations until unemployment comes down. elsewhere, voters in oklahoma barred state courts from using the islamic sharia law in making rulings; and in iowa, three justices lost their seats on the state supreme court after they voted to legalize gay marriage. authorities in greece have halted all outgoing airmail packages for 48 hours. they acted after a spate of mail bombs that targeted embassies in

athens and european leaders. one bomb reached the office of german chancellor angela merkel. another one, addressed to italian premier silvio berlusconi, caught fire at an airport. greek police said they believe domestic terrorists are involved, with no connection to al qaeda. the indonesian volcano mt. merapi exploded today with its most ferocious eruption yet. the blast threw ash clouds six miles out and forced evacuations of refugee camps. more than 70,000 villagers have already had to flee, and 38 people have died since the volcano went active. aid groups warned funding for the refugees might run out in five days. former president george w. bush considered dropping vice president cheney as his running mate in 2004. he writes about it in his new memoir, "decision points." according to the "new york times," mr. bush says he considered a cheney offer to step aside because it would show who was in charge. he also says "cutting troop levels too quickly was the most important failure" in the war in iraq. the book is being published next week. the u.s. supreme court returned

today to the issue of public support for religion. the case involved arizona tax credits for taxpayers who contribute to scholarship groups. many of the scholarships go to private religious schools. opponents argued the tax credits violate the separation of church and state. the obama administration joined the state in defending the program. u.s. auto sales were up last month. chrysler and hyundai led the way with gains of more than 35%. ford was up 19%. and wall street advanced again today. the dow jones industrial average gained 26 points to close at 11,215. the nasdaq rose six points to close at 2,540. those are some of the day's major stories. now, back to gwen. >> ifill: the federal reserve takes a bold step that could have its own political implications. jeffrey brown has the story. >> reporter: they've tried one thing and another, and now another very big thing. in its latest attempt to boost a struggling economy, federal reserve announced today it will

buy $600 billion more in government bonds by the middle of next year. explaining its move, the fed cited data that confirms that the pace of recovery inout put and employment continues to be slow. employers remain reluctant to add to payrolls, housing starts continue to be depressed, longer term inflation expectations have remained stable. but measures of underlying inflation have trended lower in recent quarters. and now of course the fed is acting amid a very new political order that will also impact the economy. we look at all this with david wessel, "wall street journal" economics editor and author of "in fed we trust, ben bernanke's war on the great panic." and david i'll start with you, first help us understand exactly what the fed is doing today and how it's supposed to stimulate growth in the economy. >> what the fed is doing today is announcing a program of printing $600 billion worth of

money, that's what a central bank does, and whying that money to buy long-term treasury bonds in the market. this will push up their price and push down the interest rate on those bonds, and they hope that will spread to other debt in the economy, mortgage rates and corporate borrowing, and that should make it easier for some people to borrow, make them more willing to borrow and make them spend a little more money. they also hope this will raise the price of stocks because they figure people will not want to buy bonds any more because the yields are so low, that will make people feel and actually be richer, maybe they'll spend a little more. finally, although they don't admit it, they know this will tend to depress the value of the dollar on the world currency markets, that will make it easier for american exporters to sell more stuff, and that too should contribute to growth. >> reporter: christie, to continue the explanation here, this line i read at the ebb of that statement, measures of underlying inflation have trended lower, that means the fed is worried about deplace, right? things spiraling down. >> absolutely.

what the fed is worried about in its most extreme scenario is that you experience in the united states what happened to japan in similar circumstances where the country was unable to get out of recession and instead of having growth you had a deflationary trap and things just sort of trending downwards and downwards, and we've had some worrying spines of that. we've seen in the bond market this astonishing thing where investors have actually paid the government money to lend them money. that's a really big deal. and it does suggest that the markets longer term are worried about what will happen with the u.s. infrustrationary deflatio deflationary environment. >> reporter: david, what's interesting about this is all the leadup to this move, all the talk refers to it as uncertain whether it will work, risky, controversial. explain that. what are the positives and the risks here? >> we are really in uncharted

waters here. we will learn over the next year whether this works or not. the fed, even the proponent of it, can't be sure it will work. what they're saying is they had a choice. do this or do nothing. in order times they would cut the short-term interest rates that they influence directly, but those have been at zero since december of 2008. so they are basically saying we are taking a risk here, we're not sure this will work, we've looked a risks, the risk that this will create too much inflation down the road, that it will trigger a massive decline in the value of the dollar, the risk it will undermine confidence in the u.s. government, the risk that this will make the fed somehow seem less independent of the political process. we've looked at all those things we've looked at inflation, as chris just said, we've liked at unemployment and styed this is a risk worth taking. >> reporter: christie, i want to you start connecting the dots here to this election we had

last night. we have the fe acting on the one hand today and we have a president and congress over on this side with a very new political balance. how have things changed and connect the dots for us, how have things changed in terms of responding to the economy and the jobs problem? >> i think it's a really paradoxical moment, isn't it. because on the one hand you have a lot of economic analysts, people on wall street saying hurrah with the election results and one of the reasons they're cheering is they say this means there will be gridlock in washington, the politicians aren't going to be able to do anything. >> reporter: explain that, why is gridlock considered a good thing for some people? >> well, the point of view of a lot of business people, and i'm not saying whether i agree with this, but the point of view is as long as washington doesn't mess around with them, that that will create a nice stable environment, it will be possible to make good decisions. but at the same time, and i do think that it is quite likely that we will now have gridlock

in washington. you have this really big nonelected actor coming in actually a really big measure, you know, the size of this oneity tateive easing is nearly as big as the tarp was, nearly as big as the first stimulus it so when you're seeing the elected politicians really move into paralysis, paralysis that was chosen by the voters, you have the unelected, in fed we trust, the great ben bernanke moving in and saying okay, the elected politicians can't do anything, but i am really worried about the economy so we're going to come in with a really big stick. >> reporter: david, how do you connect the dots, because it interesting, you have the election last it in and the first big policy thing that happens is this fed move. how do we think about them? >> i think the timing is a little coincidental. the fed plans its meetings calendar a year in advance. but i think what's going on here is that there are a lot of economists, including some at the fed, who think what the smart thing for the u.s. government to do now is to do

some more short-term fiscal stimulus, tax cuts and spending increases, and package that with some long-term deficit reducti reduction. they think that would be the right medicine to help the u.s. economy now, and shore up confidence, investor confidence in the u.s. economy in the long run. they don't think that's going to happen. so sitting there at the finish, looking at the -- the federal reserve, looking at the sta tut a says they have to do whatever they can to have maximum employment, employment too high and inflation too low, they are stepping into the vacuum, just as they did at the beginning of the crisis when the congress was reluctant to act and president bush was happy to let the fed do the heavy lifti lifting. >> i was just going to agree with david and say, you know so, what's really interesting is ben bernanke is a republican and he was appointed by a republican, but in a way he is sort of picking up the ball which the

now republican controlled legislature, the smart money is betting will not be able to carry on. it is a really interesting moment where you have, in a way, the country's chief nonpartisan economic decision maker, but appointed by a republican, effectively saying i think there should be more stimulus and since it's not going to happen, i have my own printing press so i'm going to print some more money. >> reporter: david when you look at the deficit and the politics of the time, how cramped or crimped is government in general in terms of trying to deal with the economic problems of the time? you're saying the fed doesn't think anything is going to happen. >> right. i think that if the u.s. government wanted to, it could borrow more money now and do for stimulus, and it would be a good idea if at the same time it said here's our business plan for paying back some of this debt. the problem is not economic. but it looks like the rest of

the world wants to lend us almost unlimited amounts of money at very low interest rates. the problem is really one of political leadership and gridlock, as chris just said, and it's why we have an independent central bank. so that sometimes when the politicians can't act, the rest of us don't have to suffer, we have another escape valve really that the fed is providing to try and help the economy, which is growing so slowly that we're at risk of seeing unemployment rise from here rather than fall, as we all hope it will. >> reporter: so christie, just briefly, we heard today that president obama come out, we heard the g.o.p. leadership come out, what do you look for from where you sit going forward now in terms of government's ability while the fed is acting on the side here very strongly, in terms of government's ability to help the economy? >> i think the reality is it seems very unlikely that you're going to have the elected politicians right now after this very strong republican showing come up with a second stimulus.

and the problem is, as david was suggesting, yes, the fed is carrying the water. but having the fed do this, having it come from the monetary side, has a different impact than it would if you had fiscal policy, if you had the government actually spending money too. and i think the problem is when the fed acts as it does, printing more money, it's a rich get richer phenomenon, this is going to be great for the banks, it's going to be great for people whose personal finances are strong enough that they can remortgage, refinance their mortgages. but it's not so great for the people who are in trouble. and that's one reason why it might not have as powerful an impact as the fed would like. >> reporter: all right, christie freeland, david wessel, thanks very much. >> you're welcome. >> lehrer: finally tonight, judy woodruff receives election analysis from shields and brooks. >> woodruff: and that is "new york times" columnist david brooks and syndicated columnist mark shields. gentlemen, welcome back from last night.

you had a few hours to look over these results, 60 plus seats in the house, pickups in the senate. the state houses. what does it mean? mark, what are the voters trying to say? >> well, first of all, judy, the results speak very loudly. of the 60 seats that the democrats lost in the house, 48 of them, by the calculation of one senior party strategist, were moderate to conservative. so the middle of the democratic party has been carved out. the democratic caucus -- >> you mean those who lost? >> those who lost. so the democratic party in january will be a far more liberal, than it was. what the voters were saying and i think the conservative author deserves credit for identifying this earliest, and that is blue collar voters in areas of the country that have been hurting economically for more than a generation, upstate new york, pennsylvania, ohio, instead of

voting democratic, voted republican in 2010. they expressed their dissatisfaction about their own political pain and dislocation, and sustained dislocation by voting republican. i think that was a loud message. >> and you're saying moderates? >> a lot of the democrats who won in 2006 and twalt where there was a concentrated effort by rom emanuel and the leaders of the party's campaign committee in the house to recruit candidates who could win in republican areas, who didn't meet a liberal litmus test. >> very the same thing. you know, you take these working class voters, they had surprisingly they had been with the republicans under reagan, they had supported bush, but then as the bush term went on they became disaffected with bush and especially bush economic policies. in 2006 and 2008, they switched, not all of them, but a

significant number switched to the democratic party. but then what happened was the stimulus package. the exit poll shows that a third of voters think it was harmful and a third think it made no difference, so 2/3 thought it was ineffective. so they just decided i'm not seeing income growth, i've tried tax cuts, i've tried debt, they're not helping me. so they fliped away from the democrats on the ground to the obama economic policy which was the stimulus package essentially and some other things. was not helping them. and that doesn't mean they've embraced the republicans, but it was those working class voters who shifted overwhelm ily. >> people were asked what's the top priority for the next congress, 39% said reduce the deficit. almost as many said spend to create jobs. so when john boehner today, the presumably the next speaker, mark, says he wants to listen to the voters, which message is he

saying they should listen to? >> which everyone he chooses. i mean, i think the deficit is not an unimportant issue, and certainly ross perot proved that in 1992 that could it be the basis of a major national candidacy. but i think what it comes down to is economic growth and jobs. i think if the president talks about anything else or is concerned with anything else i think he does it at his own political risk, and at the risk of just separating himself from his voters. i think the same is true for john boehner. john boehner has a more complex job because he's got a more complex caucus, i think, than president obama is dealing with. >> i think there's a lot of projection going on here. if you look at the exit polls, the i believes were more likely than other voters to be alarmed about the deficits. they were also more likely than other voters to want to protect social security, medicare and all the things that create the

deficits. so a lot of the upset about washington over the last couple decades is really projecting our own problems onto the capital. if the american people are not willing to square that circle and how can you expect to elect leaders to do that, and that was nest the exit polls. >> we saw president obama today come out and say he felt bad for those democrats who had lost, and at one point he said he took a shell lacking. mark, was this what you expected from him today? >> i think it was reality based. the democrats did take a shellacking of they lost 19 state legislatures, control of houses in 19 different state legislatures, this was acrord the board defeat for the democratic party, and it was the democratic party's record of the past two years that voters were electing republicans. i thought the president's best answer today was the question from jake tapper of abc news asked about how do you feel, the one you refered to, and he said

i feel bad. but then he immediately switched and talked with some admiration, appreciation and even sadness about members who had lost. and the votes that they had cast and that he admired them so mu much. it's a tough election when you lose people that are giants and respected on both side of the aisle, like ike skeleton in missouri, but that's the legacy of the past two years. >> you're saying that came through today? >> i don't think the president will ever be a feel your pain president like bill clinton was, i don't think he connects emotionally the same way ronald reagan did. but i think the words were appropriate and there was a ring of sincereity about his words. >> did you hear any music? >> no. and i think tell a story, there's these two modes of thought, which he does, most of

us communicate a narrative thought, we tell stories. and if he wants to connect to the american people, he doesn't have to be all sweetness and light, he's in a down moment, talk about the story he's engaged that. clinton could do that, obviously reagan could do that and you could forgive them. you could be there in the down moments and you'd expect them to rise. obama didn't do that. but that was not the main problem with the press conference. byhe way i thought he was reasonable and smart as always in the press conference. my main problem was he was asked several times were there any policies in this defeat and again and again he sort of dodged that question or said no and that it was the economy. the economy was obviously a big part of this election, but to say that the whole series of unpopular policies, cap and trade, health care, stimulus, bailouts were not implicated, i think that's, a, wrong, but b, it draws the wrong impression that you didn't have to change anything. so when he talked about the stuff he had done wrong and

tended to be procedural -- >> does that indicate he's not going to change anything? >> i think it was premature for him to have the press conference today, because i think he's still working it out, i really do. i don't mean to sound like a shrink, because he hasn't comes to grips with the reality that the policies were rejected n. campaign after campaign across the country, they ran against specific policys the democrats had voted for. so it was not just the unpopularity of the economy, though i think that was the dominant theme, an issue and establishing a narrative of 2010 but there were specific policys that did serve for political lie abilities for democrats who lost on tuesday. >> you're saying you think once he has a chance to think about it he may just say i'm not going to compromise? >> he's not going to -- i don't know. if i had a chance to listen to bob dole this morning, and he had a piece of advice for republicans, said look you can

spend all the time you want in repealing health care, he said, then nothing will come of it. and i think both sides are starting to work this out just exactly what their arrangement and accommodation. it's a shotgun marriage. and it's a forced marriage. neither party sought this out, but now they have cold responsibilities for the nation's economy and well-being. republicans in the house and a democratic president. >> what do you see? >> we knew it was coming. i know for a fact the white house has been thinking about this for a long time, we knew it was coming. i would say having spent a lot of time interviewing white house people and republican people, the republicans are a little further along in being aware of the limitations upon them right now. that there's not a lot they can do, they -- i think they've begun to think through a strategy. i'm not sure the white house has begun to think through a strategy. when you're a successful senate candidate in west virginia, takes out a gun and shots shoots one your proposals there's a

signal that maybe there are some policy immy indications here. -- implications here. >> cap and trade, which he did today suggest he's moving beyo beyond. >> what we have not seen is back channel leaking from people on the white house staff saying they are upset about the fact that there are only 5 or 10 people that make all the decisions and some other people say it's time to open that up a little. >> what does that tell you, that we are going to see some? >> there's going to be critici criticism. the old washington phrase, mistakes have been made. mistakes have been made. you're the majority in 2008 and you walk into a mid term election and it's the worst right direction wrong track number in the last five mid term elections in this country, including 2006 and 1994. >> but to get back to your question, mark, should they,

should the president have been thinking about these things? since the polls -- >> yes, he should, yes, he did it openly and notoriously in an interview with peter baker in the sunday times magazine. you know, it would appear that he is, he accepted this verdict before democratic candidates whose names were on the ballot on tuesday even faced their fate. so i think they should have a plan developed, but our feeling is that he's got to work out a relationship with john boehner and with the republicans. >> we won't hold to you a date, unless you're prepared to give one now. for when the white house is ready to work with -- >> i think they will. and he said this, there are some issues upon which they can work together, i think they know that education, energy, obama listed them today. it won't be the main story of the next two years. >> start treaty, there has to be one certainly. i think infrastructure is

another. they've got to work together on the taxes, otherwise they jump up on the first of january and i don't think either side wants that. >> we're glad to work with the two of you, mark shields, david brooks, thank you both. >> lehrer: and beyond the election news of this day: the federal reserve announced it will put another $600 billion in treasury bonds in a bid to cut interest rates and get people spending; and authorities in greece halted all outgoing airmail packages for 48 hours after a spate of mail bombs. and to hari sreenivasan in our newsroom for what's coming up on the newshour on air and online. >> reporter: we'll drill down into the aftermath of the republican victories for many days and weeks to come. with historical perspective on the political earthquake, and analysis of the rule of independent voters and the influence of the tea party and former governor sarah palin. plus reporting on the efforts to repeal or change the new health care law, the coming vote on

extending bush era tax cuts and how the new congress grappled with burgeoning deficits. also we look ahead to the impact wins and losses in state house races may have on the composition of future congresses. all that and more coming up on air and on our web site, www.newshour.pbs.org. gwen? >> ifill: and that's the newshour for tonight. on thursday, has any of this happened before? historians richard norton smith and beverly gage put tuesday's elections in historical context. i'm gwen ifill. >> lehrer: i'm jim lehrer. we'll see you online and again here tomorrow. thank you and good night. major funding for the pbs newshour has been provided by:

and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. captioning sponsored by macneil/lehrer productions captioned by media access group at wgbh access.wgbh.org

announcer: find your voice and share it. american greetings-- proud sponsor of "the electric company." - beaches resorts is a proud sponsor of "the electric company," connecting bright ideas and countless outlets for high-energy excitement. from the u.s. department of education's ready to learn grant, and... - i couldn't believe my luck when i found this coupon outside my door this morning. "this coupon is good for one free hypnosis. quit candy, fly without fear, cure clumsiness."