REPORT: Obama faces challenge of partisan split

US President Barack Obama had little time to savor victory on Wednesday after voters gave him a second term in the White House where he faces urgent economic challenges, a looming fiscal showdown and a still-divided Congress able to block his every move.    

Despite a decisive win over Republican Mitt Romney in Tuesday's election, Obama must negotiate with a Republican majority in the House of Representatives to try to overcome the partisan gridlock that gripped Washington for much of his first term.  

Democrats on Wednesday strengthened their control of the U.S. Senate by pulling off an upset win in the conservative state of North Dakota, a final blow to Republicans who had once been favored to take control of the chamber.

The North Dakota race was the last to be called of Tuesday's 33 Senate contests. With it, Democrats increased their advantage in the chamber by two, to 55-45, counting two independents expected to align with them.  

However, the Republicans managed to win the majority in the House of Representatives with 233 out of the 435 members.  

In day-after-election remarks, Republicans on Wednesday signaled no readiness to give up on their ideological opposition to raising taxes on high-income Americans  as Obama has insisted  but instead were continuing to push for lower rates across the board. That theory, known as trickle-down economics and dating to the era of President Ronald Reagan, holds that cutting taxes will vastly increase the size of the income and profit pie, thereby producing more revenue even at lower tax rates.


AP/REUTERS