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Michael Duffy, assistant managing editor of Time magazine, joins Lateline live from Washington to
discuss the electoral downfall of Barack Obama's Democrats.


TONY JONES, PRESENTER: Joining us now live in our Washington studio is Michael Duffy, assistant
managing editor of Time Magazine.

Thanks for being there, Michael.


TONY JONES: We haven't seen anything quite like this since the Newt Gingrich Republican Revolution
in '94, but Bill Clinton still went on to win a second term. What's today's rout going to mean for
Barack Obama and his future?

MICHAEL DUFFY: I think they're spending a lot of time trying to figure that out this morning, and
as your correspondent noted, we're gonna get a first look at that overnight when he has a press
conference here later today.

I think this is a much bigger deal in some way than Gingrich was. The more House seats changed in
some ways and I also think that this is a much more complicated Republican Party for John Boehner
and some of his folks to manage.

Both sides have big challenges managing their coalitions as they move into the next phase here.

TONY JONES: Yes, Boehner is the new Republican speaker. He's made it clear that president Obama
needs to change course. I mean, what sort of change could we possibly see?

MICHAEL DUFFY: Well I think we'll start seeing president Obama talk a little bit more about
deficits and spending cuts and looking for common ground with the Republicans, which wasn't really
part of his first two years in office.

He sort of made a head fake in their direction when he came into office in 2009, but there was not
a lot of co-operation coming from the other side, so he did most of his deals, in fact nearly all
of them, with Democrats.

He doesn't have that luxury any more, Tony. He's going to have to reach out. It's gotta start
today, and he has to be careful not to just make it a series of stunts and photo opportunities; he
has to really get to know some of these Republicans and see what kind of common ground he can forge
with them.

And of course, we don't know whether they're gonna be in the mood to dance. We're just gonna have
to see whether either side can take the steps politically that are required, courageous steps to do
business with the other side of the aisle.

TONY JONES: As the Democrats attempt to come to terms with what went wrong here, we've seen some
quite interesting analysis from some key Democrats, and one has said it's clear the Democrats
over-interpreted their mandate. Is that the case?

MICHAEL DUFFY: Yeah, I think it is. They came into office thinking that it was best to worry about
health care when clearly the country was much more concerned about the economy.

As unemployment has climbed steadily over the last two years, they really made it their second or
third priority. That was a huge mistake. I think Obama does recognise that now. He probably
wouldn't admit it.

And we have a history in this country, recently in particular, of new parties coming to power, one
right after another over the last decade and over-reading what they think the voters asked them to
do. And we're in a time where they're getting punished for it rather quickly and tossed out almost
as quickly as they were brought into power. It's quite volatile here.

TONY JONES: Can we see or could we see Republicans actually reverse some of the reforms that Obama
already managed to make, and particularly I'm thinking of health care reform, because this same
Democrat analysis suggests the health reform isn't holy writ; you can go back and look at it again?

MICHAEL DUFFY: You're right: the analysis does suggest that and a lot of people I think believe
that there could be some drawback. I do not.

I think once these things are passed, it's very difficult to undo them. (Inaudible) Republicans use
that health care reform as a rallying cry, a way to wake up their voters, but I don't see them
finding the will to actually, as they say, repeal and replace it.

Don't forget, even though it's been passed here, it's hardly gone into effect and won't for a few
more years. I could be wrong, but I tend to think there will be no retrenching. I think they're
gonna have their hands full just dealing with the huge problems we face in this country before they
actually undo stuff they spent a year or two creating.

TONY JONES: Here's one of the elements of the Obama legislative agenda which certainly will be
under threat: climate change or action on climate change. It's a very big deal in the rest of the
world. Americans' economic woes have pushed it further and down the agenda, but now it may be off
the agenda altogether.

MICHAEL DUFFY: It is, I think. In fact, a lot of people who lost last night across the country,
particularly in the lower chamber, lost because they took votes on climate change that were not
popular, and the White House has never been as gung-ho about taking steps in that area as it has

President Obama gave a lot of speeches about it, but their heart hasn't been in it since taking
office. I think you're absolutely right, Tony: as far as the United States goes, the congressmen
will not be adding to the climate change policy in the next two years. It's just not going to
happen. They may put some more money in wind and solar and other things, but I don't see them
taking further steps any time soon.

TONY JONES: Back in '94, the Democrat president Bill Clinton had to learn how to live with a
Republican-dominated Congress and Senate. In this case, the Democrats have managed narrowly to
maintain control of the Senate. How significant is that?

MICHAEL DUFFY: Well, I suspect that that will help president Obama keep some of these changes he's
made from being undone. It's another sort of place where he can stop things from being reversed,
but as you pointed out, with Bill Clinton, it was hard for him to reach out across the aisle, as we
have to do in this country, when his own party is a little sceptical about that action.

So as you put it at the top, he faces obstacles both dealing with an opposition party and keeping
his own group from revolting. You know, we have - Democrats tend to get challenged if they get too
far to the centre when they run for re-election, and he doesn't want that.

So it's a real obstacle course, as you said, going forward here, and it suggests to a lot of folks
that perhaps not much will happen in the next two years, that it's simply too complicated a path, a
maze, for anyone to really navigate successfully.

TONY JONES: If that's the case, is it gonna have a serious impact on Obama's chances for a second

MICHAEL DUFFY: Well I think Republicans can see now that the public is not completely sold on Obama
or his agenda, that he has the capacity to misread or over-read, as you said, what the public
wants, and they will be emboldened, I think; more people probably will get into the race now as a
result of what happened last night.

But I would just sort of caution that whatever happens in congressional elections in this country,
the coalition for electing presidents is sort of made of a different set of - from a different
chemistry set and different elements come into play, different sorts of people vote in presidential
contests and you really can't rule out the sheer power of a sitting president.

Americans like four-year presidents; in fact, they like eight-year presidents, they like
continuity, and so any sitting president of any party starts with an advantage that's sort of hard
to remember on a morning like this when for Democrats things look rather bleak.

TONY JONES: OK. One of the key things of this campaign was the anger, the vitriol and the energy
provided this Tea Party movement. I mean, how successful though were they in translating that anger
and that rhetoric into actual representatives in Congress? And I suppose, since we know the answer
to that, has the movement blown itself out?

MICHAEL DUFFY: Yeah, I think it's a great question, Tony, because while they had some victories
last night, they also had some losses. A number of their candidates simply were too far - too
extreme, a little wacky. The voters said, "We're not interested in those folks," and defeated them.

You know, Sharron Angle in Nevada who went to some of her rallies wearing a 44 Magnum on her hip,
was probably more than the market could have borne and they tossed her. And so there are a number
of candidates like that who simply didn't survive last night because they were too new, too
inexperienced and a little nuts.

So there are limits to their success overnight.

Having said that though, a number of the new senators and the new congressmen coming to Washington
in January will have campaigned on 100 per cent Tea Party campaigns, they want to cut the
government, they want to cut entitlement programs.

The Republican Party has no recent history of doing either, so a collision is coming in that party
as well, and it will take a lot of, I think, behind-the-scenes politics to keep that party from

So, both sides have huge challenges. In fact, you could say, Tony, that what we saw last night was
a country really split into four different pieces - the Democrats and the Republicans, a huge group
of independents in the middle that's swinging back and forth every two years and now the Tea Party.

Whether these are going to coalesce back into two parties or remain split into three or four is
really another way to look at the next two years.

TONY JONES: OK, Michael, we'll have to leave you there one a day where "Yes we can" has collided
with, as your own editorial says, with, "Oh no, you don't." We thank you very much for joining us
tonight. We'll see you again soon.

MICHAEL DUFFY: You bet. You bet.