Posted By: Mark Thatcher

Jed GrahamWed Nov 8, 7:00 PM ET

Democrats rode to power Tuesday on the public's dissatisfaction over the Iraq War. But their limited policy agenda is mostly focused on domestic issues.
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With control of the House and likely the Senate, Democrats will have the power of the purse, but they won't block funding for troops in harm's way, said Stephen Hess, professor of media and politics at George Washington University.

"Democrats will use their power of subpoena and oversight, but they aren't going to deny" President Bush's ability to function as commander in chief, he said.

House Speaker-to-be Nancy Pelosi assured Bush that Democrats aren't bent on "getting even" and won't hold impeachment hearings.

Bush said the war on terror will continue to be "the most important priority" and said Americans don't want to accept defeat in Iraq.

Defense Secretary Donald Rumsfeld's resignation could satisfy critics for the time being.

Democrats will be more aggressive on the domestic front. Even if Republicans had held both houses of Congress, "(Bush) would have had trouble in the final two years, as all presidents have in the past," Hess said. "There's no sugarcoating his prospects."

GOP lawmakers, he said, "are turning away from George W. Bush."

Indiana Rep. Mike Pence (news, bio, voting record) wrote in an election post-mortem that runaway spending under Bush sank the Republicans on Tuesday.

As Bush himself acknowledged, immigration reform that includes a guest-worker program may be more likely with Democrats in power.

Other domestic priorities he listed include reauthorization of No Child Left Behind and progress toward energy independence. He also said he will continue to push for Social Security reform, but he still favors personal accounts that Democrats refuse to consider.

Democrats plan to waste no time in passing their top agenda items. Within the first 100 hours after they take power on Jan. 3, Democrats, Pelosi said, will seek to pass a raft of new legislation, including a hike in the minimum wage.

Democrats will also want the government to negotiate lower drug prices for seniors in the Medicare prescription drug program. Cutting interest rates on college loans, ending subsidies for oil companies and passing lobbying reform are also on the list.

Bush said he thinks he can find common ground with Democrats on the minimum wage if they include "compensation for small business in the bill."

Bush noted that he had experience working with a Democratic legislature when he was Texas governor and that he passed some bills, like No Child Left Behind, with Democratic support. But the president suggested that he won't be shy about using veto power.

Pelosi isn't "going to abandon her principles and I'm not going to abandon mine," he said.

Hess characterized the Democratic agenda as "pretty thin stuff."

Heritage Foundation budget expert Brian Riedl expects little major legislation before the next presidential election.

"Over the next two years, most legislation will be written with thoughts of how it will affect the 2008 campaign," he said.

Riedl expects Republicans in Congress "to be more fiscally conservative next session."

Pence, a prominent budget hawk and head of the conservative Republican Study Committee, said he'll run for House GOP leader.

The Bush tax cuts don't expire until 2011, but an early battle could come over extending tax relief in 2007 from the Alternative Minimum Tax.

AMT relief enjoys bipartisan support and helps blue-state voters the most. But Democrats say they will adopt pay-as-you-go budgeting, so that tax relief could require new revenues from another source.

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