The GOP’s dramatic gains in the November elections returned the nation’s capital to its most familiar state—divided government. Even before the 112th Congress was sworn in, it was clear that a new, possibly less caustic, phase of engagement between President Obama and congressional Republicans had been born. Indeed, even as Democrats continued to hold both the House and Senate during the lame-duck session, a new front opened up, pitting Obama against liberals in his own party angered at his overtures toward Republicans.

And so, as a new chapter in the ongoing saga of Washington political combat begins, the three main players—the Obama administration, congressional Republicans and congressional Democrats—are all carefully calibrating how they will work with, and against, each of the others.
 
As a case in point, the December agreement between Obama and Senate Republicans to forestall the expiration of the Bush tax cuts demonstrated, in stark relief, how deeply legislative wrangling and electoral competition have become intertwined.
 
When Obama announced that he had reached a deal that included a two-year extension of the Bush tax cuts for the wealthiest Americans—something Obama had promised to fight ever since he was a candidate for president—it was arguably the first significant bipartisan cooperation between the White House and congressional Republicans since Obama took office. After the deal was announced, Republicans were uncharacteristically muted in their criticism of the president, while many congressional Democrats and liberal activists raised a ruckus, calling Obama’s move a sellout.
 
Nonetheless, the deal comfortably passed both houses of Congress with strong bipartisan support, though 112 House Democrats and 36 House Republicans registered their disapproval by voting “nay.” The bill signing, however, was attended by just one of the top four congressional leaders: Senate Minority Leader Mitch McConnell, who had negotiated the deal with Obama. Passage of the tax deal eased the way for approval of several key Democratic priorities for the lame-duck session, including repealof the military’s “Don’t Ask, Don’t Tell” policy and ratification of the New START treaty.
 
The tax deal and its fallout demonstrate that, with the Republicans having successfully broken the Democrats’ hold on power in the midterms, there are reasons to believe that the two parties may continue to collaborate with each other—and at least as many reasons to believe that they won’t.
 
Interviews with more than two dozen political consultants, lobbyists, congressional aides and former members of Congress found general agreement that the pace of politicking has been on the rise, as has the degree to which legislation and campaigning overlap.
 
“There is no question that there is more of a ‘permanent campaign’ today than ever before,” says Robert Kelner, who chairs the election and political law practice group at the Washington, D.C., law firm Covington & Burling. “It is striking that we are even busier after the election then we were before. It never stops.”
 
Brett Kappel, a campaign finance specialist at the D.C.-based law firm Arent Fox, says that freshman lawmakers are setting up leadership PACs before they even take the oath of office. The rookie lawmakers are forming the organizations “to make sure everyone gets to hear their opinions 24-7-365 until Election Day in 2012,” says Kappel.
 
While several consultants interviewed warn against overestimating the impact of the Supreme Court’s 2010 Citizens United decision loosening restrictions on how corporations and labor unions can spend money on political campaigns, they add that the decision did give extra juice to longstanding trends that have boosted advocacy spending.
 
“Many of the same donors that gave before gave again [in 2010],” Kelner says. “But they gave much more than they did before. It was a continuation of the trend begun by the McCain-Feingold law, which disadvantaged the political parties and favored sending funds to outside groups.”
 
Most notably, the 2010 elections introduced a cadre of new, big-money groups such as American Crossroads and its affiliate, Crossroads GPS, which together backed Republican candidates to the tune of $44 million, most of that spent on advertising. By helping elect their favored lawmakers, these groups have amassed enormous influence. In an indication of how they will continue to exercise that influence as Congress turns to policymaking, in mid-December Crossroads GPS announced a $400,000 advertising campaign urging twelve House Democrats who won narrowly in November to support the tax cut deal.
 
 “Party strategy going forward has to reflect the reality that third-party, independent groups like American Crossroads are setting the agenda,” says Patrick Davis, a GOP consultant. “They have more money and influence than either party. Consultants working inside campaigns in the last few cycles understand that the GOP brand was broken in 2006 and that it has not fully recovered. The Tea Party and the independent groups have filled the credibility gap on the right. Consultants who understand and respect this new coalition structure on the right will play a critical role in shaping party strategy in the coming months.”
 
These right-leaning advocacy groups may end up pushing Republicans to take an uncompromising approach to dealings with President Obama and congressional Democrats, but there is also a long history of cross-party cooperation in situations like the present. “There is a Democratic tradition available to President Obama of principled leadership, should he wish to avail himself of it,” says David Greenberg, a Rutgers University historian who has authored books on presidents Nixon and Coolidge.
 
President Harry Truman took this course after losing control of Congress in 1946, and President Bill Clinton did so in 1994, after a Republican tide swept out Democratic majorities in the House and Senate. Clinton used “triangulation,” in which he generally tacked to the center, positioning himself between the Republican majority and the Democratic minority in Congress.
 
Just as Clinton found common ground with Republicans on issues such as welfare reform, a wide range of issues could, with the right nurturing, produce bipartisan cooperation in the 112th Congress. These include free trade, education reform, deficit reduction, tax code reform, government accountability, foreign policy, domestic energy production and immigration enforcement.
 
Still, cooperation won’t be easy, because reaching out to Republicans in most of these areas would alienate elements of the Democratic base—industrial unions on trade, teachers unions on education, beneficiaries of federal largesse on spending cuts, environmentalists on energy production and Latino voters on immigration enforcement. Each of these groups provided crucial bulwarks against even larger Republican gains in 2010, and Obama will need them to win a second term in 2012.
 
Indeed, the looming 2012 election—which will in all likelihood feature both a competitive race for president and a tough battle for control of the Senate—could trump every other factor in determining how the next Congress plays out legislatively. “When control can swing in a single cycle, it gives both parties the incentive to maintain their campaign mentality through the odd years,” says Mark Weaver, an Ohio-based GOP consultant.
 
Not long before the election, Senate Minority Leader McConnell attracted attention for saying that “the single most important thing we want to achieve is for President Obama to be a one-term president.” While McConnell has since demonstrated a willingness to cooperate, as he did on the tax cut deal, other Republicans—especially purists in the Tea Party—may not be in the mood to compromise with a president with whom they have fundamental disagreements and who they consider to be on the ropes.
 
“Outside groups will attempt to play a big role in policy strategy,” says veteran Democratic consultant Victor Kamber. “They will try and collect on their help during the 2010 elections. Whether these groups were on the winning or losing side, they spent millions and expect to be heard by those they supported. The Tea Party will expect instant success on their issues. Liberals will expect their Democratic friends to hold the line and not give back.”
 
This sets a high bar for potential compromises like the one struck on the Bush tax cuts, because each party’s respective base—liberals for Obama, the Tea Party for congressional Republicans—may ultimately exercise a veto over what their leaders do. Both parties must deal with a hyperkinetic, twenty-four-hour news cycle led by Fox News and hard hitting partisan blogs. The pressure from these outlets makes it harder than ever for politicians to compromise or focus on the political center.
 
“Cooperation is just about impossible,” observes John Feehery, a former aide to then-House Speaker Dennis Hastert. “The rank and file has little trust in its leaders, and outside groups have a vested interest in keeping things polarized. Both parties will largely count on outside groups to do their bashing for them.”
 
Illustrating this phenomenon, the conservative group Americans for Tax Reform has already signed up 235 House members and 41 senators in the 112th Congress for its no-tax pledge. “This helps take off the table ‘deals’ with real tax hikes coupled with phony spending cuts, such as what happened in 1982 and 1990,” boasted the group’s leader, Grover Norquist, in an interview before the tax cut deal was announced. That’s why his December 9 endorsement of the tax deal carried significant weight. (The Club for Growth, another prominent anti-tax group, came out against the deal, based on its continuation of the estate tax.)
 
Could voters, in turn, exercise a veto over the party’s ideological extremes? It seems unlikely—but it’s not impossible, experts say. Opinion polls consistently show that, despite the GOP electoral wave in 2010, voters today are unconvinced of either party’s worthiness. That means that both the Democrats and the Republicans should pause before they assume that voters back them over their opponents.
 
“Gridlock is unacceptable if we are going to grow the economy and create jobs,” says Bernadette Budde, senior vice president at the Business-Industry Political Action Committee, an advocacy group that seeks to elect pro-business candidates. She adds that if Congress does not act on budget, tax and spending issues, the states have a crop of newly elected, activist governors and legislators who will pick up the ball instead.
 
Peter Fenn, a Democratic consultant, agrees. “Voters are in a pragmatic, get-things-done mode,” he says. “Gladiator politics make no sense when people are out of work, having trouble making their house or rent payments and finding the money to send their kids to college. Yet politicians find it easier to go at each other than to sit down with one another. By 2012, if Washington isn’t making progress and getting things done, voters will be in even more of a foul mood than they are right now.”
 
Those voters have now voted for change in three consecutive elections—2006, 2008 and 2010. A fourth straight change election would be all but unprecedented—and could end up being even more brutal for those identified with the status quo. Whether such an upheaval occurs will depend to a large degree on how the two parties approach divided government over the next two years.
 
Louis Jacobson is a staff writer with PolitiFact in Washington, D.C. He hasbeen deputy editor of the congressional newspaper Roll Call and covered lobbying,politics and policy for National Journal.