A democratic view: a few inches with seismic consequences. (U.S. Election Postmortem).

The election of 2002 is likely to be remembered as one in which a closely divided American electorate moved only a few inches, but with seismic consequences to how the country is governed.

By some measures, this was little more than a status quo election. After the 2000 election, the Senate was 50-50. Senator Jeffords' switch made it 51-49 Democratic. The 2002 election made it 51-49 Republican. Inches. But what a profound effect on the President's strength in governing.

A good deal of that effect has almost less to do with the result--the Republican takeover of the Senate, a body which, as Tom Daschle learned, is hard to manage without the super majority needed to cut off filibuster--and more to do with how the race was conducted.

Going into the election, President Bush and his team surveyed the landscape and saw that while the weak economy meant that Democrats were likely to pick up some important Governor's houses, redistricting made the House Republican majority all but safe, and that the Senate would be decided on the President's turf. Nine out of ten close Senate races were in so-called red states, states the President carded in 2002.

Given that line up, the President decided to put it all on the line, campaigning in an off-year like no previous President, masterfully controlling the fall congressional calendar to focus on Iraq and the Department of Homeland Security and to avoid any discussion of the economy. He pleaded to his Republican base that this election was a referendum on his leadership on national security affairs.

Against this, the Democrats ran a tactical race, critiquing the President's economic performance, but offering no compelling plan of where they would take the country.

The President rolled the dice, and he won--big time.

But what will the win mean for the country?

Judges. The most certain result of this election is that President Bush will be able to put a more conservative stamp on the federal courts, especially the important Circuit Courts of Appeal. The Senate will move on judges more quickly and the Senate Judiciary Committee is unlikely to vote down any of the President's selections, as they did two of his most conservative picks last Congress. While the press has focused on the potential impact on social issues such as abortion and school prayer, the impact on business-related issues, especially employment rights, workplace safety, environmental regulation, property takings, access to the courts, and tort reform is likely to be even more profound and long lasting.

Domestic Affairs and the Federal Budget. The only certain result here is that the balanced budgets and the budget surpluses that were so hard fought and hard won by Democrats in the 1990s are gone for as far as the eye can see. The combination of the President's tax cut, the sluggish economy, and increased defense spending will virtually guarantee budget deficits throughout the decade. While the President may get a short-term stimulus tax cut through the Congress, prospects for permanent extension of the tax cut are probably only slightly better than before the election. And Social Security reform is today even more remote than in the past several years, given that the money needed to fund a transition to a partially privatized system is long gone. Prospects for substantial reform of the Medicare system, however, may have improved, since Congress is likely to have to find real savings to offset the cost of an expensive prescription drug program.

The most counterintuitive result of the election, I believe, is that the President's success will actually strengthen the Democrats' opposition to his domestic program. Democrats came face-to-face with the hard electoral reality of trying to run against a popular President by blurring the differences on tax policy and with no real economic program of their own. That is unlikely to happen twice. Democrats, on the Presidential stump and on the House and Senate floors, will be offering proposals to stimulate the economy, to reorient the tax cut to the middle class through payroll tax relief, to expand health coverage, to lower the price of prescription drags, and to invest more in education and the environment.

Deregulation and Congressional Oversight. When Democrats lost the Senate majority, they not only lost the ability to set the legislative agenda, they lost the ability to do real oversight and investigations of the federal regulatory apparatus. Within days of the election, the Administration announced a series of environmental rollbacks on clean air, federal land management, forest policy, and energy development. Had Senator Joe Lieberman (CT) rather than Senator Susan Collins (ME) been chairing the Senate's key investigative committee, you could be certain that subpoenas would be flying in the new Congress. Instead, you can expect that the Administration can do pretty much any favor it wishes for its political allies and all will be quiet on the Capitol Hill front.

Homeland Security. President Bush campaigned on getting his new department exactly as he wanted it, and that's what he got. Now he and Secretary-designate Tom Ridge have to deliver and no blaming the unions or federal work rules if things don't work out. Making this department work is a monumental task, especially given how broken are some of its component agencies, such as the Immigration and Naturalization Service. The President deserves and will receive support from both parties in trying to make this work, but there is no question that he will be graded on the results and on his performance in 2004.

International Affairs. Perhaps the most surprising result of the election is not how much it strengthened the President at home, but how much it strengthened him overseas. When he went to the NATO summit in the wake of the election, he encountered foreign leaders who finally understood that he was not just tough, but shrewd and most importantly had the support of the American people, which they had questioned in the wake of the disputed 2000 election. Ministerial jokes now result in resignations.

Whether the President can convert the respect he has earned from foreign leaders into results, not just in the war on terrorism, but in peacekeeping, arms control, international financial management, and trade policy may just be the key to the 2004 election.

John D. Podesta is former White House chief of staff to President Clinton.