Senate defeat

Reporting from Washington - The Democratic Party's defeat in Massachusetts on Tuesday -- the loss of a single, crucial Senate seat -- will force President Obama and his congressional allies to downscale their legislative ambitions and rethink their political strategy.

The most immediate challenge facing Democrats after Republican Scott Brown's victory is how to salvage healthcare legislation now that they no longer have the 60 votes needed to break GOP filibusters.

But even as Massachusetts voters streamed to the polls to anoint Sen. Edward M. Kennedy's successor, Democratic leaders showed no signs of standing down.

"We're right on course," House Speaker Nancy Pelosi (D-San Francisco) said after meeting with her leadership team. "We will have a healthcare reform bill, and it will be soon."

For Democrats facing tough reelection fights in swing districts this November, however, the spectacle of their party losing in a liberal bastion has been chilling.

Even before Tuesday, party leaders had been under pressure to pivot toward other issues high on the agenda of an angry and impatient electorate: job creation and fiscal responsibility.

"It is really time now," said Rep. Rick Boucher (D-Va.), "for Democrats to shift their attention to issues that will enjoy broad public support."

Most worrisome for the party is polling data that indicates Obama's healthcare bill has helped turn independent voters -- who fueled his presidential campaign to victory -- into antagonists.

"If the Democrats can't win in a state they carried by 26 points in 2008, then they have to ask themselves: Where in the world is it safe to be a Democrat running for federal office in 2010?" said Bill McInturff, a Republican pollster whose firm worked with the Brown campaign. "The answer is nowhere."

Another factor that could shift the Democrats' legislative course is recognition of the anti-establishment fervor Brown's victory represented.

"The strongest dynamic in politics today is . . . about outsiders versus insiders," Democratic pollster Geoff Garin said.

The pickup-driving Brown, Garin said, skillfully portrayed opponent Martha Coakley, the Massachusetts attorney general, as someone who would do little to change Washington.

Amid that anti-establishment sentiment, the final stages of the healthcare negotiations have been riddled with the kind of elements that stoke anger at Washington: special provisions to corral support from individual senators, behind-the-scenes negotiations by a handful of leaders and a deal cut to win over organized labor.

Brown's election is also likely to alter the debate over the jobs bill that the House passed last month and companion legislation taking shape in the Senate.

Not a single Republican supported the House bill, and Senate Democrats now face a strategic choice: draft a similar measure and dare Republicans to kill it, or make changes -- such as adding business tax breaks -- to make it more acceptable to GOP lawmakers.

But some Democrats worry that the Massachusetts election will scare lawmakers from taking what they consider necessary steps to curb unemployment, steps that involve more spending and government involvement in the economy.

"Interpreting the Massachusetts result as a call to do nothing in terms of the economy would be a big mistake," said Rep. Joe Courtney (D-Conn.).

Another Obama priority is an overhaul of financial regulations -- an issue that has become more partisan as the president has ramped up his anti-Wall Street rhetoric and proposed a new tax on large banks.

One business lobbyist predicted Brown's victory may make Republicans even less likely to cooperate in moving the bill along, because they will anticipate party gains in the midterm elections.

But even Democrats who are urging a shift of legislative focus to job creation and fiscal responsibility see political danger in abandoning healthcare legislation entirely.

Their advice to party leaders: Finish it up, pronto, and then do something about the budget deficit.

In a sign of their determination to turn that page, Democratic leaders and the White House on Tuesday reached a tentative deal to resolve long-standing differences on creating a commission to propose ways to reduce the deficit and strengthen congressional budget rules against deficit spending.

"Focus on the healthcare thing," said Florida Rep. Allen Boyd, a leading Blue Dog Democrat. "Get the healthcare thing right and get it out of here. And then focus on the budget stuff."