"According to The Associated Press, Democrats have won at least 230 House seats, giving them 12 more votes than the 218 needed to control the 435-member chamber.  Two more uncalled races appeared to be leaning Democratic Thursday evening. Republicans had won 196 seats, with 7 uncalled races leaning in their direction." 

Elections officials in Florida's Sarasota County will conduct a recount in the race for the 13th district after it was reported that there were over 13,000 undervotes.  "Regardless of the recount result, the case will likely end up in court and will have ramifications not just in Congress but throughout Florida.  Activist groups from Sarasota to Miami-Dade County have voiced concerns over the soundness and accuracy of the ATM-style touch-screen voting machines in use, and for the process of reviewing votes." 

From NBC's Mike Viqueira
The White House served pasta salad and a chocolate dessert -- called, no kidding, "Freedom Chocolate" -- at lunch today with House Democratic leaders Nancy Pelosi and Steny Hoyer.

In other news, topics of discussion included Iraq, Darfur, immigration reform, energy policy, R&D tax credits that have expired and are waiting to be renewed, and "fiscal responsibility," according to a Democratic leadership sources. Hoyer reminded the President that Tip O'Neill and Ronald Reagan worked together on tax reform and Social Security. One Democratic source described these issues as "areas of bipartisanship and urgency." These are all issues that have been emphasized by Democrats in the just-completed campaign.

On Iraq, they spoke of the bipartisan Iraq Study Group. Pelosi noted that while she's interested in what they have to say, she doesn't view the report as definitive or binding in any way. On immigration, Democrats are known to be keen for Bush to take the lead in order to give Democrats cover from the "amnesty" charge.

Graciously accepting defeat, Sen. George Allen (R) conceded to opponent (and now Senator-elect) Jim Webb (D) this afternoon.  Allen, who trails Webb by roughly 9,000 votes, said he doesn't want to subject Virginians to a costly and lengthy recount, and does not expect that one would change the outcome of the election. Laden with football references, Allen's speech was also heavy on religion and faith. The NFL coach's son said he believes in a "purpose-driven life," and because he sees "no good purpose" in asking for a recount, he would sideline himself (that's our own football reference).

Allen was once a rising star in the GOP and was supposed to cruise to victory on Tuesday -- until a series of fumbles led to Webb's rise in the polls. The former Virginia governor and congressman was also an early conservative favorite in the race for president in 2008. Allen garnered the most votes in a presidential straw poll at the Conservative Political Action Conference last February. Just a few weeks later, he was asked if he would be willing to serve as vice president, to which he replied, "It's an important position, but that's not something that one normally aspires to."  While comebacks are always possible in politics, Allen's hopes of obtaining the presidency have been crushed for now, as is any possibility that anyone would consider him for the number-two spot on a presidential ticket in 2008.

Webb, joined by Virginia Gov. Tim Kaine and Democratic Senate campaign committee chair Chuck Schumer, made remarks in Arlington just a short time ago, claiming victory and thanking supporters. But Webb quickly jumped from celebrating to getting serious. He called on President Bush to "publicly denounce" the "politics of divisiveness" that led up to Tuesday's election.  Webb and Allen seem to be taking the first step forward in that department: Webb told the crowd that he and Allen have a lunch date next week.

 

From NBC's Mark Murray
At a luncheon with reporters this afternoon, Republican National Committee chairman Ken Mehlman attributed his party's midterms losses to the Six Year Itch, to the defeats an incumbent party usually suffers during wartime, and to the scandals and ethics problems that led to the loss of at least a dozen GOP-held seats.

At the same time, however, he said those reasons don't tell the whole story. "I think the American people sent a message, and I think we have to listen" -- that the GOP needs to be a "party of conservative reform" and it must strive for the "highest ethical standards." He added that he anticipated the "culture of corruption" tag possibly hurting his party. "Congress should have passed ethics reform"; it also should have passed earmark reform. "We've got to be the party of reform."

If the Republican Party listens, he concluded, 2006 will be considered only a setback, and "the center-right majority will continue." He later noted, "The most dangerous thing in the world is to stay in success" -- because it prevents you from learning from your mistakes.

Democratic leaders are expected to hold a news conference this afternoon acknowledging that they've won majority control of the Senate with 51 votes to Republicans' 49. Tomorrow, Democratic Leader Harry Reid and Whip Richard Durbin are expected to meet with President Bush at the White House. Official control would not take effect until January. When the Senate comes back for the lame duck session next week, Republicans will still hold the majority.

In the race that gave Democrats control of the Senate, we're likely to hear from both Virginia Sen. George Allen (R) and his Democratic opponent Jim Webb today. NBC News declared Webb the apparent winner last night at 8:38 pm.

Des Moines -- Iowa Gov. Tom Vilsack (D) told a select group of friends and supporters that he's running for president via a conference call at 7:00 am. "This is not an exploratory process," he said. "We're jumping in with both feet." Filing the paperwork with the FEC today will make him the first official major candidate to run for the nation's top job. It also allows him to legally begin raising money for a bid. Until now, he has been raising money for the Heartland PAC, his political action committee dedicated to getting Democrats elected to office. But federal law prohibits him from using any of that money for a presidential run.

Vilsack acknowledged to supporters this morning that some people may doubt whether he has a chance to win the election. But, he said, people doubted he could win Iowa's race for governor, too, back in 1998. "I'm a proven winner." This decision to run in 2008 comes after a big election night for Vilsack's party: Iowa Democrats took the governors' mansion and the state House and Senate, plus three congressional seats. Those wins could greatly enhance the Governor's credibility nationally and give him some much-needed attention.

Vilsack will officially make the announcement that he is running for president on November 30 in a series of places including his wife's hometown of Mt. Pleasant. He also plans stops in early presidential nominating states, and in Pittsburgh, PA, where he grew up.  

In terms of how he fits into the Democratic pack, Vilsack is a centrist and chair of the Democratic Leadership Council, as well as one of the few who can claim gubernatorial credentials. For these reasons, his aides were encouraged by former Virginia Gov. Mark Warner's announcement that he won't seek the party's presidential nod.

From Elizabeth Wilner, Mark Murray, Huma Zaidi, and Jennifer Colby
President Bush's bombshell about Defense Secretary Donald Rumsfeld's departure and his own openness to considering the forthcoming recommendations of the Iraq Study Group wound up getting sandwiched between his party's loss of one chamber of Congress on Tuesday night and their loss of the other chamber last night.  NBC News declared Democrat Jim Webb the apparent winner of the Virginia Senate race shortly at 8:38 pm.  Republican Sen. George Allen's campaign plans to offer a statement once state election officials complete their re-canvass.  At last count, Webb had 49.6% to Allen's 49.3%.

While you wait on Allen's statement, we suggest comparing Bush's playbook from when he was governor of Texas to his words from his press conference yesterday.  A lot of his rhetoric in talking about bipartisanship and topics like education and immigration harked back to his days in Austin, when the "uniter, not a divider" image he built up by working with a powerful Democratic lieutenant governor on some of those very issues helped get him elected President.  His schedule for today may produce more of the same: breakfast with the GOP Hill leadership, lunch with incoming Speaker Nancy Pelosi, and a meeting with the President-elect of Mexico.  He also meets with his Cabinet, including his outgoing Defense Secretary.

Bush insisted yesterday that Rumsfeld's exit was not in reaction to Tuesday's "thumping" and that it had been in the works for awhile (putting him in a jam over his statement of confidence in Rumsfeld just one week before).  His choice to replace Rumsfeld, former CIA chief Robert Gates, is a member of the bipartisan Iraq Study Group.  You can't help but wonder if Republican losses on Tuesday might not have been as severe had Bush sent such dramatic signals earlier in the election cycle.  The NBC/Wall Street Journal poll from September showed voters split, 44%-46%, over whether Rumsfeld should resign.  Sixty-eight percent said at the time that it would be a symbolic gesture that would not make much difference in the war.  But the poll was taken before the release of the April National Intelligence Estimate and before the October violence in Iraq.

A Democrat-run Congress is likely to force some real changes to the Administration's Iraq policy.  The Democrats' shared "Six for '06" priorities include calling for US forces to begin being redeployed from Iraq by the end of this year.  The new makeup of the Senate means that Democrats would have at least five more votes for any amendment similar to the Reed-Levin proposal from June to begin withdrawing forces from Iraq this year went down to defeat, 39-60.  That's not counting any possible new support from Senate Republicans in the wake of Tuesday's outcome.  But as the Cook Political Report's Jennifer Duffy points out, some of these new Senate Democrats may have a hard time delivering on what they've told voters they'll do on Iraq. 

Beyond the Rummy bombshell, the other striking aspect of Bush's news conference was his tone.  "I understand when campaigns end and I know when governing begins," he said.  He was responding to a question about how he and Pelosi will work together after exchanging barbs during the campaign.  But his statement was a reminder that Bush and his advisors, including chief political strategist turned domestic policy advisor Karl Rove, have approached the last six years as more of a campaign than as a government.  Policy initiatives have been crafted and nominees selected with an eye toward either drawing new voters into the party or appeasing the base.  War rooms and attack ads by third-party groups have become a staple part of the legislative process.  As has political polarization, as Bush's team has relied more on drawing contrasts with Democrats than on finding ways to work with them.

Now, faced with a relatively short list of major accomplishments to show for six years in office under one-party rule, and with his final two years now subject to a Democratic majority, a legacy-conscious Bush may reject campaigning in favor of governing. 

And confirming that the 2008 presidential campaign is underway, retiring Gov. Tom Vilsack (D) if Iowa plans to file the necessary paperwork with the FEC today, per the AP.  Vilsack could use the PR boost in being the first to take such a formal step to help raise his profile to the level of a national candidate.

Bush not only dispatched with Rumsfeld yesterday, but he also dissed Vice President Cheney; NBC's Bob Windrem reports that Bush went against Cheney's wishes in letting Rumsfeld go, and then again in choosing Gates over Cheney's suggestion that they find someone more ideological.

The Washington Post: "Though Bush affectionately patted Rumsfeld on the shoulder as he ushered him out of the Oval Office, there was little sugarcoating the reality that the defense chief, 74, was being offered as a sacrificial lamb." 

The Chicago Tribune: "Rumsfeld is usually not the sort of man seen choking back tears…  But on Wednesday, Rumsfeld was out of moves, and nearly out of words." 

The New York Times says that the timing of yesterday's announcement "left no doubt that Mr. Bush wanted to make a dramatic demonstration of flexibility in dealing with a war that has come to define his presidency." 

The Washington Times reports that "Mr. Rumsfeld knew he was leaving at least several weeks ago," and that one contributing factor "was that a Democratic victory likely means hours of inquisitions on Iraq policy by several House and Senate committees....  Mr. Gates, an intelligence analyst by trade, is expected to do a top-to-bottom review of Iraq strategy and of the generals executing it."  http

Incoming Senate Armed Service Committee chair Carl Levin says he will "question Gates on his willingness to provide information about pre-war intelligence and the costs of the war." 

The Miami Herald says some analysts think that Rumsfeld's exit gives the Administration "a chance to rethink the controversial policies that have earned the United States international condemnation," like its treatment of detainees. 

The Washington Post says of possible changes to the Administration's Iraq policy, "The contours of a new policy are not clear, but there is likely to be more pressure on the Iraqi government to rein in sectarian violence and a growing clamor from Democrats to begin a drawdown of U.S. troops...  The Baker-Hamilton study group is not expected to call for pulling out of Iraq quickly.  Rather, insiders say, the most likely recommendation will be to curtail the goal of democratizing Iraq and instead emphasize stability.  That might entail devoting more resources to training and equipping Iraq's military." 

The Los Angeles Times reports that "some Iraqi officials appeared concerned Wednesday that the power shift in the U.S. Congress and the resignation of [Rumsfeld] could effect major changes in policy toward their bloodied nation...  But Iraqi politicians are mostly in the dark about what to expect, local analysts said, noting there has been much criticism of Republican policy in Iraq but no clear indication of what Democrats would do differently." 

The Los Angeles Times, channeling First Read, says that what lies ahead for the Bush's tenure "may be a two-sided presidency, one open to compromise on domestic legislation but committed to its basic strategy in Iraq and the war on terrorism - one-half Austin, Texas, one-half Sept. 11." 

The Dallas Morning News wonders if Rove can rebuild the GOP before 2008, while some speculate that the Rove era is over. 

The Washington Post sees bad news for GOP hopes of broadening the party in Tuesday's turnout: "Democrats won big... by undoing GOP gains among groups President Bush once envisioned as essential ingredients of a durable, conservative governing majority in Washington: Catholics, married mothers and Latinos.  These voters, who were instrumental in electing Republicans in recent elections, took flight from the GOP in large numbers." 

Channeling First Read, the Houston Chronicle writes that passing comprehensive immigration reform now seems more likely after the Democrats' victories.  "Still, few were rushing to predict that Congress will quickly - or successfully - tackle a major immigration overhaul in the legislative session that begins in January.  'Some of the worst (political) barriers have been washed away,' said Tamar Jacoby, an immigration expert with the conservative Manhattan Institute.  '(But) it's still going to be extremely hard to accomplish it in Congress.'" 

The Houston Chronicle: "It is not clear how long the spirit of cooperation will last.  The Democrats and the White House are divided on issues such as the Iraq war, taxes and expanding federal funding for embryonic-stem-cell research.  Although the president announced he was replacing Rumsfeld..., he essentially repeated his goals of keeping U.S. fighters in Iraq until a victory is achieved there." 

The San Francisco Chronicle says Pelosi spent yesterday "soaking in the reality of making history."  After an early morning phone call with President Bush, Pelosi held a news conference, was interviewed by Brian Williams, Katie Couric, and Wolf Blitzer, and was congratulated by Condoleezza Rice.  Pelosi's husband, Paul, said today was the first time he saw his wife begin to relax. 

NBC's Mike Viqueira reports that House Democrats seem likely to gather one week from today to elect their new leadership.  Although Pelosi isn't expected to be challenged for Speaker, Democrats may see fights for their number-two and number-three posts.  Rahm Emanuel, the highly successful chair of the party's House campaign committee, is considering challenging former Congressional Black Caucus chair Jim Clyburn for whip.  Emanuel asked reporters yesterday to give him "another 24 hours" to decide whether or not he is going to make the race, Viq reports.  Then there's the under-the-radar struggle between Rep. John Murtha and House Minority Whip Steny Hoyer (MD), which is about to become very visible. 

These fights put Pelosi in a bit of a fix, Viq says.  Hoyer is a Pelosi rival and Murtha has been seen as her stalking horse.  And Pelosi is already under heat from the black caucus, first for the way in which she handled the Rep. Bill Jefferson scandal, and now for her not-so-secret plan to pass over Rep. Alcee Hastings, an impeached former judge, for chair of the Intelligence Committee.

Viq also advises that there really is no such thing as a "Speaker-elect."  There will be no interval between the time Pelosi is formally elected Speaker and the time she actually becomes Speaker.  That day will be January 3.  Nor is Pelosi yet "Speaker designee," which will likely come next Thursday when House Democrats hold their elections. 

On January 3, all House members will gather in the chamber to vote for Speaker, Viq says.  Each member's name will be called, whereupon that member will shout out the name of his or her favorite.  The process will take a couple of hours.  Even if a member doesn't like the caucus' nominee, he or she will be under tremendous pressure to vote for the agreed-upon candidate.  With rare exceptions, the vote is straight party-line.

On the Republican side, Hastert is as good as retired; he announced yesterday that he won't stand for minority leader.  The current majority leader, John Boehner, has declared his intention to run for minority leader but faces a challenge from a leading conservative, Mike Pence.  House members have moved their leadership elections back two days from next Wednesday to next Friday.

The Chicago Tribune writes about Hastert's announcement that he will he step down as party leader.  "It was a sex scandal that made Dennis Hastert the House speaker and a sex scandal that helped unmake him."  

Roll Call covers an incoming Senate Minority Leader Mitch McConnell talking about bipartisanship and other Republicans on the Hill privately blaming their losses on Bush. 

USA Today rounds up finger-pointing by prominent Republicans like Bush, Rush Limbaugh, and Dick Armey yesterday. 

The Washington Post's Milbank says Bush, "who started his appearance with an admission that 'I share a large part of the responsibility,' went on to blame everybody else...  The president's performance fit neatly into yesterday's version of the post-election ritual in Washington: The winning side gloated, and the losing side pointed fingers every which way." 

"Republicans, including party leaders, acknowledged yesterday that the party had wandered far from its commitment 12 years ago to clean up corruption, shrink the federal government and slash irresponsible spending," says the Washington Times. 

The Los Angeles Times covers conservative leaders concluding yesterday that the party's losses weren't so much because of ideology as because the party strayed from its moorings on spending and the size of government.  "A Republican National Committee memo laying out talking points for conservative pundits, bloggers and other supporters - which was obtained by The Times - underscored that message, calling for the party to 'refocus conservative principles of less government, lower taxes, less regulation, strong national defense, judicial restraint and fiscal conservatism.'" 

"An adviser to Allen, speaking on condition of anonymity because his boss had not formally decided to end the campaign, said the senator wanted to wait until most of canvassing was completed before announcing his decision, possibly as early as this evening," reports the Boston Globe.  "The adviser said that Allen was disinclined to request a recount if the final vote spread was similar to the figures that were reported on election night." 

The New York Times: "Mr. Webb, taking a page from the Republican playbook in the contested presidential vote count in Florida in 2000, tried to cast his victory as inevitable." 

"Nationally, more than 40% of eligible voters cast ballots in Tuesday's elections," says USA Today.  "That's up modestly from a turnout rate of 39.7% in" 2002.  Among the preliminary findings: "The USA's tightest Senate races brought out thousands more voters.  The turnout rate in Virginia's Senate race was 52%, compared to 39% in the last midterm election in 2002...  Montana's turnout rate increased to 62% from 55%."  Conversely, "[t]urnout sagged in less-competitive states."  And, "Contentious ballot measures didn't always draw voters.  In Colorado - where voters banned gay marriage, raised the minimum wage and turned down legalizing small amounts of marijuana - the turnout rate was about 58%, up from 49%.  But turnout in South Dakota, which rejected a strict abortion ban, dropped to 67% from 72% in 2002." 

From the NBC News Decision Desk
NBC News has declared Democrat Jon Tester the apparent winner of the Montana Senate race.  Democrats now have 50 votes in the Senate, including the votes of Independent Bernie Sanders of Vermont and of Joe Lieberman of Connecticut.  Republicans have 49 votes, and one race, Virginia, remains undecided.

Special to First Read from The Hotline
Here are a few Democrats who deserve mucho credit for building an impressive ground machine...

At the DCCC, they are Sean Sweeney and Adrian Saenz, political and field directors, respectively.

At the DSCC, pol. dir. Guy Cecil spent months developing GOTV programs in Montana and Missouri that effectively harnessed those states' blue waves. (Not for nothing are DSCC exec = dir J.B. Poersch and DCCC exec dir. Karin Johanson old hands at "field.") BTW: the DCCC brought in guru Michael Whouley to supervise the field programs during the last two months.

In Missouri, for example, the DSCC had 5,400 volunteers and paid staff on the streets 11/7. They targeted 250K drop-off voters and 350K swing voters outside of St. Louis and Kansas City. While the Republicans bragged about making 3 million voter contacts on the Saturday before the election, Democrats made about 3.5 million contacts.

An analysis of internal RNC and DSCC/DCCC data suggests that during the final week, the Democrats made, on average, knocked on about twice as many doors as Republicans did nationally. The two parties made roughly the same number of telephone calls.

In Montana, Cecil worked with the state Democratic party and Gov. Brian Schweitzer's aides to mobilize thousands of volunteers. The Democrats also modeled the electorate in MT and MO and made selective use of microtargeting.

The Republicans' 72 Hour Task Force is no longer impregnable, but it still performed quite well given the environment. The Republican base was motivated and the program worked to turn them out. Credit goes to the RNC's unassuming but driven political director, Mike DuHaime, as well as White House political director Sara Taylor.

Republicans managed to win 14 of 23 congressional races decided by two percentage points or less and 13 of 19 races decided by 5000 votes or less. That's a testament to the durability of the 72 Hour Program.

From NBC's Mark Potter
Hutchinson Island, FL -- For most of the night, the mood at Joe Negron's campaign HQ was loud and upbeat. His many supporters there were convinced that he had defied the odds after replacing the disgraced Mark Foley in a late bid to secure this House seat, a traditional Republican stronghold. It was a race drawing international attention.

More than a few political analysts were anticipating a Negron victory over businessman Tim Mahoney, a Democrat running in his first campaign. They argued that Negron had surged in the polls and would ride the momentum to victory. Even with Foley's name still on the ballot, many believed a majority of voters would rally behind the man the national GOP had spent nearly $2 million trying to elect. The campaign slogan of "Punch Foley to Elect Joe Negron" had reverberated throughout the district.

But shortly before 11:00 pm, there were danger signs that only a few here in the jubilant crowd seemed to notice. Mahoney was maintaining a razor-thin lead. Counties that many believed would overwhelmingly trend Republican were split more evenly. And then came a terse announcement that in a few minutes Negron would join the crowd to talk about what was happening. To those paying attention, it didn't feel like victory.

Before the microphone, Negron put on a good face, talking about the challenges he had to overcome, including a late start in the campaign, and of course, the fact his name by law would never be on the ballot. He thanked his supporters for all their hard work and then dropped the bomb, saying, "We came up short."

Throughout the crowd there was a painful groan. Many were caught off-guard and were stunned. More than a few would leave the room weeping. They truly thought they had pulled off a major upset in the 11th hour.

By virtually all accounts, Negron was a solid candidate who ran an aggressive and well-supported campaign. But even in this district, which has been represented by a Republican congressman for three decades, it wasn't enough in the age of Foley and Iraq. The voters spoke and sent a previously unheard-of Democrat off to Washington, and in that were heard around the country, and around the world.

From Elizabeth Wilner, Mark Murray, Huma Zaidi, and Jennifer Colby
A recount in Montana and a canvass in Virginia are all that separate Republicans from keeping control of the Senate and their ability to confirm presidential nominees, as most had expected they'd do, and a devastating loss of both chambers of Congress.  At this writing, the breakdown of the Senate is 49-49, with Independent Bernie Sanders and renegade Democrat Joe Lieberman voting with Democrats.  The present breakdown of the House is 234 Democrats to 201 Republicans; at least 19 Republican members have lost their seats.

At this writing, the Montana Senate race has come down to 1,735 votes, with Democrat Jon Tester leading GOP Sen. Conrad Burns with about 1,000 votes left to be counted.  Final results are expected this morning, after which there may be a recount.  In Virginia, Democrat Jim Webb leads GOP Sen. George Allen by 7,847 votes.  Canvassing begins there this morning.  Virginia election officials and the candidates have 10 days to count the votes, including the provisional and absentee ballots, and then call for a recount if one is desired by either side.

President Bush surely would rather have kept control of Congress than gotten his comprehensive immigration reform bill.  But for a president who may not be inclined to change course on his Iraq and domestic policies, despite last night's clear referendum on his presidency, it's one of a few topics on which he can strike a bipartisan note today without being seen as yielding to his new circumstances.  As we've suggested before, Bush's prospects of getting a guest-worker plan and a path to citizenship for illegal immigrants actually improve with a Democrat-run House.  Another potentially bipartisan legislative avenue recently mentioned by the White House is energy policy.

One key domestic item Bush opposes which could now have the votes to withstand a presidential veto is expanded federal funding of embryonic stem-cell research.  Back in July 2006, such a bill passed the Senate, 63-37.  Assuming that Tester and Webb hold onto their leads, Democrats would likely pick up four additional votes for the funding, providing a veto-proof margin.

There's no reason to expect any immediate change in the Administration's approach to Iraq.  Just yesterday, White House spokesman Tony Snow added US Ambassador Zalmay Khalilzad to the list of top officials heading up the war, along with Vice President Cheney and Defense Secretary Rumsfeld, who aren't going anywhere anytime soon.  The Administration has said its Iraq policy won't change regardless of the election outcome.  NBC's Richard Engel reports this morning that some effort has been made to inform Iraqis that the outcome won't affect US troop levels. 

But with a Democrat-run House, the Administration could expect its Iraq policy to be investigated at a number of levels, and if Democrats also claim control of the Senate, it could result in real changes.  Back in June 2006, the Reed-Levin amendment to begin withdrawing forces from Iraq this year went down to defeat, 39-60.  Assuming that Tester and Webb hold onto their leads, Democrats would likely pick up at least five more votes (Brown, Casey, McCaskill, Tester, Webb) on a similar amendment.

As Bush and other prominent Republicans like re-elected Rep. Tom Reynolds and Senate campaign committee chair Elizabeth Dole face the press and each other today, one party elder tells First Read that the big question will be whether the party finds the right balance between how much of last night was due to the war (which alienated moderate and independent voters), how much to the party coming loose from its moorings on spending and smaller government (which turned off conservatives), and how much to assorted other issues.  That effort will be complicated by the party's shrunken ranks of moderates in both chambers.

NBC's Kelly O'Donnell reports that Bush began making his series of phone calls at 7:00 am.  Calls are being put in to presumptive House Speaker Nancy Pelosi, outgoing Speaker Dennis Hastert, and the rest of the House and Senate leadership.  He invited Pelosi and current House Minority Whip (and aspiring Majority Leader) Steny Hoyer to lunch tomorrow, and invited the Senate Democratic leaders to coffee on Friday.  Advisors say Bush is extending a "strong spirit of goodwill and cooperation."  We'd note that Bush has a model to follow, should he choose to follow it, in re-elected Gov. Arnold Schwarzenegger (R).

As Democrats take their victory lap, the question for them is whether they are aware that they didn't win so much as Republicans lost.  Will they think they have a mandate, as Bush claimed he had in November 2004?  Or will they see a new majority as an opportunity to earn the trust of voters and dangle some publicly popular items before voters as an incentive to elect a Democratic president in 2008?

Pelosi, who's expected to be elected Speaker-designate by her caucus next week (she'll get the official title in January), holds a press conference right after Bush's today and does interviews with the three network anchors.  Her task will be to strike a bipartisan tone, not only to send a signal to Republicans, but also to the ranks of red-state Democrats who will now pad the party's ranks on Capitol Hill.  House campaign committee chair Rahm Emanuel, national party chair Howard Dean, and governors' association chair Bill Richardson also hold press conferences.  The party now holds a majority of governorships -- 28 -- for the first time since 1994.

Democrats gambled in not putting forth a more substantive agenda than their "Six for '06," a collection of long unpassed items like a minimum wage increase and federal funding for embryonic stem cell research.  They also gambled in not trying to come up with a unified position on Iraq, and it paid off.  Republicans in Washington wound up being as divided over Iraq today as they ever accused Democrats of being.  But as the Cook Political Report's Jennifer Duffy points out, some of these new Senate Democrats may have a hard time delivering on what they've told voters they'll do on Iraq.

Not putting forth a more substantive agenda may have repercussions for Democrats down the road.  Many of the seats they won last night simply by virtue of not being Republicans -- including PA-4, PA-10, and OH-18 -- could turn out to be rentals that they'll be hard-pressed to retain in 2008. 

Speaking of 2008, winners among that pack include: Sen. Evan Bayh (D), who campaigned hard for his state's three new Democratic members of Congress; and Sens. Barack Obama (D) and John McCain (R), who campaigned for seemingly everyone.  Among the losers: Gov. Mitt Romney (R), who saw not only his own seat in Massachusetts fall to Democrats, but five other GOP-held governorships under his stewardship as chair of the Republican Governors Association; and Gov. George Pataki (R), who can't exactly claim to have boosted his party in New York.  On the fence is Kerry, who also raised money and stumped for a lot of Democratic candidates, but stepped in it at the end.

NBC's Chris Donovan points out that on the day after the 1994 midterm elections, President Clinton held an afternoon news conference in the East Room.  He said he was reaching out to Republicans and asking "them to join me in the center of the public debate where the best ideas for the next generation of American progress must come."  When asked by a reporter if the election was a repudiation of him, Clinton responded:  "Well, I think that I have some responsibility for it.  I'm the President.  I am the leader of the efforts that we have made in the last two years.  And to whatever extent that we didn't do what the people wanted us to do or they were not aware of what we had done, I must certainly bear my share of responsibility, and I accept that." 

Writing about the 1994 election 10 years later in his memoir "My Life," Clinton pointed out that "we got the living daylights beat out of us."  He wrote: "The Republicans were rewarded for two years of constant attacks on me and for their solidarity on the contract.  The Democrats were punished for too much good government and too little good politics."   "I was profoundly distressed by the election, far more than I ever let on in public," he said, noting that he believed some of his "hard decisions" on policy issues cost those Democratic members who supported him their seats.  And he wrote that "on the day after the election, I tried to make the best of a bad situation, promising to work with the Republicans."

President Bush, disappointed with the election results, will hold a news conference on Wednesday to urge his opponents to work with him.

"The president's not the kind of guy who is going to be somber about things," said press secretary Tony Snow. But he added: "They have not gone the way he would have liked."

Bush, unaccustomed to political defeat, planned a morning phone call to Democratic minority leader Nancy Pelosi and made plans to give his take on the midterm election results at a 1 p.m. ET news conference.

NBC News declares Democrat challenger Claire McCaskill as the projected winner in Missouri U.S. Senate race. Incumbent Senator Jim Talent has conceded.

From MSNBC's Chris Jansing
It's nearly one in the morning, and there's a big party going on in the hallway outside of my hotel room. It's been four hours since Joe Lieberman was declared the winner in the Connecticut Senate race, more than three since he gave his acceptance speech.

But after a truly brutal and exhausting campaign, it's time for his supporters to have a victory celebration, and I'm guessing it isn't going to end anytime soon. Beer appears to be the beverage of choice - fueling sporadic chants of "Joe Joe Joe". 

There were also some union members lingering in the ballroom downstairs, and a group a young volunteers were near the hotel lobby, singing a sort of Joe Lieberman fight song to no tune I could recognize (but it was lively). There's also a bit of an air of amazement surrounding it all, as if  they can't quite believe they've really pulled this off.

What a remarkable change of fortunes for Lieberman and his supporters. After his stunning primary loss to newcomer Ned Lamont in August, a lot of people gave him up for politically dead and urged him not to run as an independent. A lot of people, in fact, thought he was making decisions with his ego.

Ned Lamont was an instant star - a poster boy for the growing anti-war sentiment sweeping the country, and he had a personal fortune he was willing to use to finance the campaign. He did spend $16 million or more - but analysts say, not very wisely. And Lieberman's message of bi-partisanship played well with the state's biggest block of voters - independents. He also won overwhelming Republican support. In spite of rampant speculation the Republicans will make him an offer he can't refuse if he'll caucus with them, he says he's sticking with the Democrats. (He also said tonight he goes back to Washington beholden to no political group).

Lieberman got a big laugh at the beginning of his victory speech tonight when he said, "I'm Joe Lieberman, and I approve of this election."  There's a whole LOT of approval going on right now in the hallway outside of my hotel room.

From NBC's Mark Murray
Now that Democrats have captured the House, one of the best upcoming races is now all but underway: the battle for House majority leader. Rep. Steny Hoyer, the current No. 2 House Democrat, just released a statement declaring his candidacy for this post. "I believe that it is imperative that our next majority leader have the skills, ability and energy to reach out to every element of our diverse caucus so that we may achieve consensus," he said. "Our new majority leader also must have an unwavering commitment to our core principles, and be an effective communicator and legislative strategist. I believe that I have established a strong track record in all of these areas over the last four years."

Hoyer's rival for this post will be Rep. John Murtha (D), who announced earlier this year that he would run for majority leader (but then suspended his campaign for fear that it would become a distraction). Murtha is a close friend of Nancy Pelosi, the apparent Speaker, and he gained a cult following among Democrats for his opposition to the Iraq war. Just asked by MSNBC's Chris Matthews if he was running -- and would win -- the race for majority leader, Murtha replied, "You got it."

From MSNBC's Hilary Rosen
Well it now appears that we will have a large Democratic majority in the House. And the Dems deserve it. It was a national campaign with a promise for change. Nancy Pelosi's first words tonight were conciliatory and promise to work with the President to give the American people the change they are seeking. There is no doubt that Pelosi's overwhelming majority will give her the strength to be tough with the White House. 

Pelosi's will take some risks. And my guess is that many in my party will push her to be more combative, but that won't be her first move.  She'll offer the President the chance to restore some oversight to the spending on the war; to the strategy of deployment and she will make sure that the House is open to the recommendations of the coming Baker Commission report. But in many respects, the ball is in the President's court. Will he listen to the people and play nice with the House or will he push for a fight on the big issues?