Washington - -- From San Francisco to North Dakota, Democrats were rocked to their core Wednesday by the loss of the late Edward Kennedy's Massachusetts Senate seat, presaging a sharp pivot from health care to creating jobs and cutting the enormous federal deficit, which has enraged voters.
That job creation and deficit reduction may be in conflict only deepens the challenge for Democrats. They face an urgent vote to increase the debt limit above $12.4 trillion while moderates are insisting on a special commission that could enact unpopular structural reforms to Social Security, Medicare and other popular programs.
The rebuke by independent voters was felt far beyond the blue Bay State. It reached California Sen. Barbara Boxer, who is battling what Democrats believe is a wave of anti-incumbent voter anger threatening to swamp them in November.
Every state 'in play'
"I think every state is now in play," Boxer said Wednesday. "Every race is a choice. ... You have to make the case that you're the one on the people's side, and you have to feel it in your heart, and people have to get it."
It is a shocking reversal from a year ago, when President Obama addressed a jubilant throng at his inauguration. "There are some who question the scale of our ambitions, who suggest that our system cannot tolerate too many big plans," Obama declared. "What the cynics fail to understand is that the ground has shifted beneath them."
On Tuesday, Democrats saw a ground shift in the opposite direction.
San Francisco Mayor Gavin Newsom, in Washington for the U.S. Conference of Mayors, described a "disconnect" between voter anxieties about the economy and deficits and Washington's "profligacy" and closed-door deal making for Nebraska, Louisiana, labor unions and drugmakers after Obama had promised that C-SPAN cameras would make the effort to transform health care transparent.
Sen. Dianne Feinstein, D-Calif., pronounced two key components of the Democratic agenda - health care and climate-change legislation - all but dead.
"I think we do go slow on health care," Feinstein said. "People do not understand it. It is so big it's beyond their comprehension. And if you don't understand it and somebody tells you it does this or it does that, you tend to believe it, even though it isn't true. It's hard to debunk all of the myths out there."
As for the climate-change legislation she supported: "A large cap-and-trade bill isn't going to go ahead at this time," she said.
Scale back health plan
Abandoning the Senate and House health care bills was unthinkable when the week began, but on Wednesday, Obama promised to scale back the effort, saying he would not try to "jam" the Senate bill through the House.
"The people of Massachusetts spoke," Obama said, and Senator-elect Scott Brown has "got to be part of that process."
House Speaker Nancy Pelosi, D-San Francisco, said the concerns of Massachusetts voters would be heeded, but vowed that some form of health care legislation would be passed. Obama promised to regroup around popular ideas such as insurance reform.
Still, the retreat is remarkable. Health care was Obama's top priority, a key plank in his yearlong primary battle with Hillary Rodham Clinton and a 40-year dream of Democrats.
The ambitious undertaking consumed most of Obama's first year in office and was central to his plan to tackle long-term deficits. Moderate Democrats cast career-killing votes to pass bills through the House and Senate with no room to spare.
But Democrats clearly want to shift their main focus to jobs and deficit reduction after a year of unpopular bailouts of Wall Street and automakers.
Voters 'worried'
Voters "didn't like the stimulus, they didn't like the TARP (Troubled Asset Relief Program), they didn't like the automobile bailout," Feinstein said. "They're worried. People are smart. They understand what's happening in their lives and their neighbors' lives, and they see it on a downhill trajectory."
Democrats readily acknowledged that their $787 billion stimulus has fallen short on job creation while contributing to a record-shattering $1.4 trillion deficit and leaving few avenues for Democrats to deliver millions of jobs by November.
Newsom talked up a program he says is working, a direct-subsidy program for businesses and nonprofits that create new jobs called "Jobs Now." It is in the stimulus but has gotten little publicity, and rather than costing "hundreds of millions of dollars for a few thousand jobs" like other stimulus programs, he said, "This is millions of dollars for thousands of jobs."
Democrats will be hunting for such programs, but Obama's new budget is due in early February and the administration is expected to call for a freeze in discretionary programs outside of defense.
Feinstein said rising federal debt is scaring voters. "They see their debt, they see our nation's debt, and it makes them all the more insecure," she said.
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