Story Highlights

  • Republicans seize control of U.S. House, gain in Senate
  • Democrats hold Senate, Reid wins Nevada race
  • Republicans gain 10 in governors races
  • Economy, discontent with Obama propel Republicans
  • Houste results: Republicans 239, Democrats 183, Undecided 13
  • Senate results: Democrats 51, Republicans 46, Undecided 3

Disenchanted U.S. voters swept Democrats from power in the House of Representatives and strengthened the ranks of Senate Republicans on Tuesday in an election rout that dealt a sharp rebuke to President Barack Obama.

Two years after Obama won the White House, voter anxiety about the struggling economy and discontent with his leadership fueled big Republican gains that toppled Democratic House Speaker Nancy Pelosi from power and ushered in a new era of divided government.

Networks projected Republicans would pick up at least 60 House seats, more than the 39 they needed for a majority that would elevate conservative John Boehner to House speaker, put Republicans in charge of House committees and slam the brakes  on Obama's agenda.

Current results for the House have the Republicans with 239 seats, Democrats with 183 and 13 races still to be decided. In the Senate, the Democrats have 51 seats, the Republicans have 46 and three races are still to be decided.

Tuesday's election surpassed the Republican sweep in 1994, when President Bill Clinton's Democrats lost 54 House seats, and was the biggest shift in power since Democrats lost 75 House seats in 1948.

"Our new majority will be prepared to do things differently," Boehner told supporters at a Washington hotel. "It starts with cutting spending instead of increasing it, reducing the size of government instead of increasing it, and reforming the way Congress works."

Obama made a late-night call to congratulate Boehner and discuss ways they could work together to create jobs and improve the economy, a Boehner aide said.

Senate Democratic leader Harry Reid won the country's most high-profile Senate race after a brutal battle with Tea Party favorite Sharron Angle in Nevada. He said he was determined to renew the struggle to create jobs and bolster the economy.

"The bell that just rang isn't the end of the fight, it's the start of the next round," he told jubilant supporters in Nevada.

Democrats also won key Senate races in West Virginia and California, where Senator Barbara Boxer won re-election, ensuring they would retain at least a slender Senate majority.

Senate Republicans gained six seats, and the re-election bids of two other Democratic incumbents - Michael Bennet in Colorado and Patty Murray in Washington - were too close to call.

Republican control of the House will likely spark legislative gridlock, weakening Obama's hand in fights over the extension of soon-to-expire income-tax cuts and the passage of comprehensive energy or immigration bills.

"The ability of this administration to get major new programs done was already limited. This just seals the deal," said Jaret Seiberg, policy analyst with the investment advisory
firm, Washington Research Group.

Markets attentive

U.S. stock futures pulled back from earlier gains as Republican chances of a Senate takeover waned. With opinion polls favoring Republicans, markets had factored in Republicans winning the House and Democrats holding the Senate.

Investors said the outcome of Wednesday's U.S. Federal Reserve meeting was of greater market importance. The Fed is expected to announce it will pump billions into the economy to speed the recovery.

All 435 House seats, 37 of the 100 Senate seats, and 37 of the 50 state governorships were at stake in Tuesday's voting.

Democrats battled a tough political climate all year, with persistent high unemployment and a growing budget deficit fueling voter anger at government in Washington. They were also fighting history - the party that holds the White House traditionally loses seats in a midterm election.

Exit polls found voters deeply worried about the economy, with eight in every 10 saying it was a chief concern. Four of every 10 voters said they supported the Tea Party, and nearly three-quarters believed government did not function properly.

The Republican rout extended from coast-to-coast and knocked at least 30 Democratic incumbents out of the House, including veterans Ike Skelton, chairman of the Armed Services Committee, and John Spratt, chairman of the Budget Committee.

In the Senate, Republicans picked up Democratic seats in Indiana, Wisconsin, North Dakota, Pennsylvania and Arkansas as well as Obama's former seat in Illinois.

The three-way race for the Republican-held Alaska Senate seat was too close to call with incumbent Lisa Murkowski running as an independent write-in candidate against Tea Party favorite Joe Miller and Democratic challenger Scott McAdams.

Tea Party rises

Florida Republican Marco Rubio and Kentucky Republican Rand Paul became the first Tea Party-backed candidates to win Senate seats, ensuring an influx of conservative views in the staid chamber. Another Tea Party favorite, Republican Christine
O'Donnell in Delaware, lost her race.

Grass-roots anger over government spending and economic weakness gave rise to the Tea Party, a loosely organized conservative movement that backed a message of smaller government and lower taxes.

"It's a message that I will carry with me on day one. It's a message of fiscal sanity. It's a message of limited constitutional government and balanced budgets," Paul told
supporters in Kentucky.

Republicans picked up at least 10 governorships from Democrats, including the battleground state of Ohio, and held the office in Texas in a race with vital implications for the once-a-decade redrawing of congressional districts that begins next year.

Democrat Jerry Brown won in California in the race to succeed Republican Governor Arnold Schwarzenegger.

Obama will hold a news conference at 1 p.m. EDT (19:00 Israel time) on Wednesday to talk about the post-election landscape.Dick Durbin, the No. 2 Senate Democrat, said no significant legislation would pass without input from Republicans. "We need
to move beyond filibusters and enter a real conversation about passing legislation that this country needs," he told Reuters.

Republican candidates had pushed an agenda of spending cuts and at least a partial repeal of Obama's healthcare and Wall Street reforms, but Obama could veto their efforts.

Stocks in health insurers like UnitedHealth Group Inc, WellPoint Inc and Aetna Inc are likely to rise on Republican gains, analysts said, even if a full repeal of healthcare
reform is unlikely.

Voters on Tuesday also weighed in on a variety of topics: in California, for example, CNN projected they rejected a measure that would legalize possession of marijuana.