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What the Election Means for You

Winners face challenges with health care, Social Security, tax cuts and more.

A "throw the bums out" tide swept the nation Tuesday night, vaulting the Republicans to control of the House of Representatives and scrambling the deck for issues important to older voters, who have much at stake in the new Congress.

Democrats held on to the Senate and many governorships, ushering in an era of divided government, with Democrat Barack Obama still in the White House and the stage set for a contentious 2012 election season. While split governments are often ripe for compromise, the newly elected Republicans, many of them members of the Tea Party, have said they will hold to their principles no matter what.

The incoming Republicans, who will be led by likely speaker John Boehner, R-Ohio, have pledged to roll back the new health care reform law, weigh changes to Social Security and Medicare, and take a tough look at federal spending on government programs.

"It's clear tonight who the winners really are and that's the American people," Boehner said at a Republican victory rally. "The American people's voice was heard at the ballot box."

He said the election was a "repudiation of big government and of politicians who refuse to listen." It is time to "seize that moment and make sure to reject spending sprees and bailouts and backroom deals and all the other nonsense," he told ecstatic partisans.

He began to choke up when he recounted his life of working odd jobs and sweeping the floor in his father's bar to make money for college, and called for a change in attitude.

"With their voices, the American people are demanding a new way forward in Washington — a new approach that hasn't been tried before. Cutting spending instead of increasing it, reducing the size of government instead of increasing it," he said.

Democratic Party leaders said they would fight GOP plans and never compromise on bedrock principles.

In addition to winning control of the House, Republicans took over the governorships in Michigan, Ohio, Pennsylvania and Tennessee, but Democrats held on in Maryland, New York, New Hampshire and Massachusetts, as well as in California, which is key to their hopes in 2012.

Governorships are also critically important to implementation of the new health reform law, as the states have to set up the insurance exchanges that are key to the program.

But for the most part, it was a Republican day. "I can almost feel the ground shaking here because there's an earthquake election going on all over this country," Sen. Jim DeMint, R-S.C., declared.

Rep. Eric Cantor, R-Va., the presumptive House majority leader in the new Congress, said on CNN that Republicans now have a "golden opportunity to … listen to the people, which is what the vote is all about. The American people felt they have been ignored."

He refused to be specific on what programs might get cut, saying only that the Republicans want to return to 2008 levels of discretionary spending.

AARP's John Rother said the role of government itself was at stake in the election. "Should government take an active role in managing the economy or providing a safety net for people, or should it take a more reduced role and leave greater room for the private sector and individual responsibility?" said Rother, executive vice president for political strategy and international affairs. "Everything else follows from that."

The House Republicans' "Pledge to America," while short on specifics, targets the new health care law. The document calls for "repeal and replace." Most analysts don't think repeal is possible, since that would be subject to President Obama's veto. Repeal may not even be practical, considering that some of the popular effects of the new health care law are already in place, such as keeping children on their parents' insurance plans until they reach age 26 and prohibiting lifetime limits on insurance benefits. But there are many intermediate steps that could have a severe impact on the law.

Brookings Institution health policy analyst Henry Aaron said a complete repeal is unlikely, but he sees a scenario in which the health law could be stymied if Congress cuts funding, refuses to approve staffing, or drags out the process of writing specific rules and regulations.

The law won't be fully implemented until 2014, so the 2012 elections will also have an effect, Aaron said. "Between now and 2014 the enormously difficult task of implementation has to take place both in Washington and in 50 state capitals," he said.

The states will be looking to Washington for funding as they set up the crucially important health insurance exchanges. The Congressional Budget Office predicted that by 2019, 24 million low-income people will get their insurance through these exchanges, and a large number of them (those with incomes up to four times the poverty level) will get federal subsidies. That means states will need to set up the exchanges and the federal government will have to fund them. Both those moves could be affected by Tuesday's results. Twenty states already have filed lawsuits opposing the health reform law.

In Washington, the new Congress could begin to satisfy demands to repeal the new health law by simply refusing to fund it. Aaron said there are funding holes in every aspect of the law. "Each one of them will have tens of millions or hundreds of millions [of dollars] necessary to make effective certain provisions of the bill," he said. "The larger issue is the appropriation of funds for implementation, which, if withheld, could cripple the whole bill."

On Other Fronts

Social Security and Medicare. Boehner has suggested raising the Social Security retirement age to 70. He said this would be phased in over 20 years, if approved. "We're all living a lot longer than anyone ever expected," Boehner said. He also put income- and inflation-indexing of benefits on the table.

In addition, Rep. Paul Ryan, R-Wis., the likely chairman of the Budget Committee, has drawn a "Roadmap" that would partially privatize Social Security and would set up a Medicare voucher system for those currently under 55. (People over 55 would keep the current program.) The GOP leadership has not signed on to Ryan's ideas.

Ryan is a member of the presidential deficit commission that will make recommendations on government spending, including Medicare and Social Security. Fifty-three million Americans receive Social Security benefits and 46 million receive Medicare.

William Galston, a budget analyst at the Brookings Institution, said plans to privatize parts of Social Security have gone nowhere, the most recent flop under former President George W. Bush. "His return on investment was less than zero," Galston said. "Seniors will worry about Social Security, but I honestly don't think as a political matter they have that much to worry about."

Jobs. In their campaign pledge, Republicans said they would make permanent the Bush-era tax cuts, not just for the middle class but for everyone. The GOP asserts the tax cuts will create jobs and help stabilize the economy.

Age discrimination in the workplace. Legislation died in Congress earlier this year that would have provided the same protection for older workers as for people of color and women. It stemmed from a 2009 Supreme Court ruling that an employee, in this case financial analyst Jack Gross, must prove by direct evidence that age was the main factor in his demotion.

Federal spending. Republican candidates have pledged to roll back federal spending to the levels in the 2008 budget. That would mean cuts in hundreds of federal programs affecting Americans of all ages, if the Republicans adhere to their pledge to make the cuts "across the board," exempting only national security. But in previous years, such pledges have been difficult to keep, so there may be a lot of horse trading over what programs actually get cut.

Taxes. Depending on how the current Congress addresses the pending expiration of the 2001 tax cuts in a post-election lame-duck session, the next Congress will likely have to consider what to do with the income and capital gains tax cuts scheduled to expire in January. Any extension of the tax cuts could increase the need to raise revenues to close a budget deficit projected at $1.4 trillion this fiscal year.

Elaine S. Povich is a veteran Washington-based correspondent.

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