Status Quo Congress

Democrats charged onto Capitol Hill a year ago ready to change the world, or at least America, only to run into President Bush's veto pen and the Republican filibuster machine in the Senate. After humiliating legislative losses (particularly on Iraq) and approval ratings that make Bush look like the prom king, you would think the congressional Democrats and their ringleader, House Speaker Nancy Pelosi, would be eager to make some changes. But they're miles ahead in fund-raising nationally, and most surveys that test votes for Congress have the Dems beating gop candidates. What's more, the media are focused on November's presidential contest, so there's little incentive to get much done in Washington these days. This could be "the most unproductive session of Congress in many, many years," laments Stephen Hess of the Brookings Institution.

But with the economy gone subprime and Americans clamoring for action, both parties agree on the need for some combination of spending and tax cuts designed to goose growth. Bush is expected to unveil his strategy, likely to include his perennial aim of making the 2001 and 2003 income-tax cuts permanent, in his Jan. 28 State of the Union address. Democrats, meanwhile, are building their own proposals around a tax refund for the middle class.

Even if the President and both parties in Congress try to hammer out a compromise package, there are still three Senators among the major presidential contenders—Hillary Clinton, Barack Obama and John McCain—whose competing agendas could spawn more gridlock. "Suddenly you have an issue that both sides agree is terribly important," Hess says. "It's not impossible to solve. So the question is, Will they?" If past is prelude, don't bet on it.