Not sure how it will all come out, but the fact that most of the late breaking news is leaning R is less than encouraging for Ds. Prediction seems to have settled on approx 55 seats for Rs, with variation from 40-80 depending on which model you use. There is a good deal of unfairness in that outcome, from my perspective, as the biggest obstacles from a progressive point of view were in the Senate, not the House. I will feel bad for a number of my friends on Hill staff looking for new jobs.
OTOH, I expect extremely little policy action for the next two years, which -- as Krugman pointed out recently -- is likely to be disastrous for us as a country. The Republican wave of 1994 had an aggressive policy agenda which led them to cooperate on a number of pieces of legislation. From a D perspective, this was not necessarily a good thing (welfare reform, Telecom Act of 1996, and repeal of Glass-Stegal being major accomplishments of the period). But the incoming class of Republican freshman are being elected explicitly on a "no to 'big government' platform.
So the determining factor for movement will be the extent to which the Obama administration chooses to roll over. The biggest test on this will be -- surprise -- the Bush era tax cuts, where the Obama administration is already signaling that it may rethink its current opposition to extending the cuts for the top 1% because it fears blame for an increase in middle class tax rate. But even if the Obama administration is willing to give on most issues, there are simply not a lot of things that the incoming R freshmen plan to do. There are no big dereg prizes to be had. The only thing they can push for, consistent with their agenda, is massive cuts in discretionary spending -- which they can achieve by refusal to pass expenditure bills.
From a policy perspective, therefore, much depends on how the Executive Branch decides to react. If the "lesson learned" by the Obama people is they need to stoke their base, then we will see significant new action from Executive Branch agencies along more progressive lines. While this seems unlikely in light of the history of the Administration, I do not rule it out entirely. For one thing, the Obama people will need something to run on in 2012. OTOH, if the lesson learned is to be even more "centrist," then we can look forward to total inaction on any front over the next two years.
In any event, I shall avoid election coverage tomorrow and simply view the aftermath of the train crash on Wed.