Cnbc's Melissa Francis explains how the move by the Federal Reserve to buy $600 billion of government debt is designed to lower interest rates.

Former Fed governor Larry Meyer discusses what could go wrong in the Fed’s controversial plan to purchase government bonds.

Live-blogging the president's press conference

1:57 ET: That's the conclusion of the press conference. Thanks for following along here on NBC's First Read.
1:56 ET: When he talks to regular Americans, Obama says, "I always come away from those interactions feeling so much more optimistic about this country."
1:53 ET: Self-reflective Obama says he need to make sure that he gets out of the White House to reach the American public.
But he alludes to Reagan and Clinton, who stood at the podium two years into their own presidencies "getting similar questions."
"This is something that every president needs to go through," he says.
Although "I am not recommending that every president takes a shellacking like they did last night," he adds with a bit of a wry smile.
1:51 ET: Asked if he thinks voters might have seen him as "out of touch," Obama responds that there's a danger to being "in the bubble" of the White House.
"Folks didn't have any complaints about my leadership style when I was running around Iowa for a year."
"How do I meet my responsibilities here in the White House .. but still have that opportunity to engage with the American people .. and give them confidence that I am listening to them."
1:50 ET: "The most important thing we can do is to boost and encourage our business sector and make sure that they're hiring."
1:48 ET: "The only way America succeeds is if businesses succeed."
1:45 ET: A moment of levity: Obama toys with idea of "Slurpee summit" with Boehner.
"They are delicious drinks."
1:44 ET: "When I came into office, this economy was in a freefall. The economy has stabilized. The economy is growing. ... It would hard to argue that we're going backwards." But, he adds, we might be "stuck in neutral."
1:41 ET: "The American people understand that we're still digging our way out of a pretty big ditch."
1:40 ET: On 'Don't Ask, Don't Tell' -- Obama notes that the "overwhelming majority" of Americans thinks that the policy should be confirmed. "We need to provide certainty" to the military on the issue. "This should not be a partisan issue"
1:38 ET: "Cap and trade was just one way of skinning the cat" on energy. The EPA wants help from the legislature on greenhouse gasses, he says.
1:37 ET: On health care negotiation, Obama regrets that "we couldn't have made the process ... healthier"
1:36 ET: Asked if he's willing to compromise on the question of allowing tax cuts for the very wealthy to expire -- which Republicans generally oppose and Obama has vehemently opposed -- Obama says "my goal is to make sure we don't have a huge spike in taxes for the middle class."
That answer doesn't address the highest tier of the tax cuts, perhaps showing some openness to extending those cuts.
He says his goal is to sit down with Boehner, McConnell, Reid, and Pelosi to "see where we can move forward in a way that first of all does no harm."
"How that negotiation works itself out, I think it's too early to say."
1:34 ET: "It feels bad," Obama says of watching "terrific public servants not have the opportunity to serve anymore."
He lauds Democrats who took tough votes and showed "courage" and "conviction" in their choices. He says there is some "questioning on my part as to whether I could have done something different or something more" to have helped the defeated lawmakers keep their seats.
1:31 ET: Obama says Americans want greater transparency, takes responsibility for "not having pushed harder on some of those issues"
1:30 ET: "Let's make some progress on those areas we do agree on," Obama says. Names energy policy.
1:29 ET: Obama acknowledges that the cap-and-trade bill that passed the House earlier this year will not have the votes to pass again in the new session.
1:27 ET: "I've been willing to compromise in the past, and I am willing to compromise going forward."
1:26 ET: He urges "intelligent, smart" budget cuts.
1:24 ET: Obama: The key is to be able to distinguish between stuff that isn't adding to our growth ... and things that are absolutely necessary to create jobs.
He also mentions keeping taxes low for middle-income families -- an allusion to the Bush tax cuts debate that looms during the upcoming lame duck session.
1:23 ET: CBS's Chip Reid asks what can be done to create jobs, especially if Republicans take stimulus spending off the table. "What are our priorities? What do we care about? That's going to be a tough debate."
1:21 ET: On health care revisions: "This is different than campaigning. This is now governing."
1:19 ET: But Obama still stands by the premise of the health care bill. "This was the right thing to do." He adds that he's open to Republican modifications that would bring down costs. "I'm happy to consider some of their ideas."
Obama acknowledges that the unpopular 1099 provision attached to the health care bill, which would require small businesses to file additional paperwork, could be "probably counterproductive"
"That's something we should take a look at."
1:19 ET: FOX reporter asks if the health care bill is in danger at this point? Obama's response: We'd be misreading the election if we said the American people wanted to see us relitigate things we've argued over the last two years.
1:19 ET: "Ultimately I'm going to be judged as president because of the bottom line: Results."
1:17 ET: "If right now we had five percent unemployment instead of 9.6 percent unemployment, people would have more confidence in [my] policy choices."
1:16 ET: The president says he signed bills with earmarks "in the rush to get things done" early in his presidency.
1:15 ET: Obama has not yet specifically mentioned the health care bill, focusing on unpopular "emergency" measures that were meant to help the economy.
1:12 ET: NBC's Savannah Guthrie asks whether Obama is reflecting on his policy decisions and whether voters may perceive him as just "not getting it."
"It felt as if government was getting much more intrusive in people's lives than they were accustomed to," Obama responds, but argues that the policies that prompted that feeling of overrreach were responses to crisis situations.
1:09 ET: "There are going to be areas where we disagree," says Obama. Voters' message was: "We want everybody to act responsily in Washington. We want you to work harder at arriving at consensus."
"I gotta do a better job, just like everyone in Washington does," he says.
1:08 ET: Asked if the election was a referendum on his policies, Obama says that voters were expressing frustration with the economy. Despite forward motion, "people across America are not feeling that progress. They're not seeing it."
1:07 ET: "I do believe there is hope for civility. I do believe there is hope for progress."
1:06 ET: Obama notes that there will be another election in 2012. "I'm not so naive as to think that everybody will put politics aside until then." We must work harder to build consenses, he says. "Including me."
1:06 ET: No party has "a monopoly on wisdom," Obama says. He adds that he wants a "civil" debate, "serious conversations about where we're going as a nation."
1:05 ET: To win economic competition against other countries, "we're going to have to be strong, and we're going to have to be united."
1:04 ET: Obama says that the country has made progress over the past two years. But, "Clearly, too many Americans have not felt that progress. Yesterday, they told us that."
"As president, I take responsibility for that."
1:03 ET: Voters expect Washington to work for them, not against them, Obama says. They want to know that their voices are not being drowned out.
1:02 ET: "Yesterday's vote confirmed what I've heard" in my travels across America. "People are frustrated."
1:02 ET: "Some election nights are more fun than others .. some are exhilarating, some are humbling"
1:01 ET: Obama: I told Boehner and McConnell that I look forward to working with them.
1:01 ET: The president has arrived.
12:55 p.m. ET: We'll be live-blogging the president's remarks scheduled for 1 p.m. ET in this space. Stay tuned.

Boxer: We beat the Texas Polluters tonight"

Reid: 'Gridlock will not do the trick'

The Senate majority Leader - who defended his seat from Tea Party Challenger Sharron Angle - points to history as evidence that a divided government doesn't necessarily lead to inaction, and reiterates his belief that the new congress can work together

Rand Paul declares 'Tea Party Tidal Wave'

The Senator-elect from Kentucky talks about the message he's planning to bring to Washington, "fiscal sanity,
limited Constitutional government and balanced budgets".

Steele: Country gave us 'one more chance'

Calling the Election Day gain "an enormous moment," RNC Chairman Michele Steele discusses the role Tea Party Party lawmakers will play in shaping the party's legislation.

Boehner claims mandate to repeal "monstrosity" health bill

The presumptive next speaker of the house tells reporters that Republican gains on Capital Hill is proof that the "Obama-Pelosi Agenda" has been rejected by the American People

Republican U.S. Senate candidate Christine O'Donnell, a favorite among the conservative Tea Party movement, appears at an election night rally in Dover, Delaware. Democrat Christopher Coons won the U.S. Senate race in Delaware on Tuesday, keeping for Democrats a seat once held by Vice President Joe Biden.


O'Donnell: 'Be encouraged. We have won'
In a somewhat confusing speech conceding defeat to Democrat Chris Coons, Republican Senate candidate Christine O'Donnell asserted that, despite her loss, political leadership in Delaware has been "drastically transformed" by her campaign.


Delaware hands Tea Party a resounding loss
An msnbc political panel talks about how the Democratic victories in Delaware will affect the Tea Party as well as the possibility of a GOP takeover of the House.

Election night phone call

President Barack Obama makes an election night phone call to Rep. John Boehner from his Treaty Room office in the White House residence.

Boehner to GOP: Sober Up!

— By Suzy Khimm

| Tue Nov. 2, 2010 11:59 PM PDT

By the time John Boehner took the podium at the Grand Hyatt in Washington, DC, the stage was set for the Republican restoration. The major networks had called a GOP takeover of the House hours earlier—with even more freshmen than came to Capitol Hill during Newt Gingrich's 1994 revolution. But amid the jubilant shouts from the crowd—"I love you!" "That's my boy"! "USA! USA! USA!"—the future House majority leader attempted to send the message that his supporters needed to sober up for a moment.
"This is not a time for celebration...not when we have buried our children under a mountain of debt," Boehner said as the crowd cheered and held up cell phone cameras. He repeated the "get serious" mantra moments later: "Let's start right now by recognizing this is not a time for celebration. This is a time to roll up our sleeves and go to work."
Even before Election Day, the National Republican Campaign Committee insisted that it wasn't going to be popping campaign corks on Tuesday night. The Grand Hyatt event "is not a 'party'—even if voters remove Democrats from power, you don't celebrate at a time when one in 10 Americans are out of work," a NRCC spokesman said last week.
The message, in other words, is that the Republicans will be serious about governing once they take power—and will vow to show restraint, despite having an obscenely large majority. But GOPers have already begun to list some of the obstructionist hijinks they could resort to once they take the House: ceaseless investigations into federal agencies, threats of impeachment, and anything it takes for Obama to end up being a one-term president.
Moreover, the influx of far-right and tea party-backed House members could encourage the GOP to pursue ideological crusades that end up consuming the party's agenda. And at least one veteran of the 1994 Republican revolution warned the GOP about venturing down such a path. "We had gotten distracted by some symbolic battles...government-subsidized art, for instance," says Michael Paranzino, a staffer for former Arizona GOP Rep. Matt Salmon, a member of Gingrich's freshmen class.
Paranzino warned the reborn GOP against launching small-bore, yet ideologically inflammatory crusades such as probes of PBS funding. "It's a lot of energy for a few million dollars here or there," he says, adding that Gingrich's 1998 downfall in the House gave him "the taste of disenchantment with a do-nothing Congress."
But despite early vows of restraint from ascendant leaders like Rep. Darrell Issa, the fist-pumping crowd at the Grand Hyatt made it harder to believe that the new Republican majority would be inclined to hold back. "It's a fucking bloodbath!" yelped one young attendee as more House results came up on the screen. When I asked a tight-lipped Hill staffer what he expected from a GOP-controlled House, he simply replied: "It's going to be entertaining."

After the Disaster, What's Obama's Next Act?

— White House photo/Pete Souza (US Government Work).

The president has a tough decision to make: how confrontational to be in opposing the more extreme and more powerful Republicans.

By David Corn | Wed Nov. 3, 2010 3:00 AM PDT

---

Now comes Act III for Obama, and the critical question: will he change the script?
The election results on Tuesday night were no surprise: a tea party-fueled tsunami of discontent washed away the House Democratic majority and eroded much of the Democrats' territory in the Senate. It was a historic rout. The initial returns indicated the Republicans would pick up five dozen or so House seats and end up with a commanding majority in that chamber. Prominent House Democrats—Florida's Alan Grayson [1], South Carolina's John Spratt, Virginia's Tom Perriello [2]—lost. Tea party favorite Rand Paul [3] dominated the early returns, winning the Kentucky Senate seat. Sen. Russ Feingold, a three-term, non-establishment Democratic progressive from Wisconsin—gone. Republican candidates with lobbying and corporate ties waltzed into office. A reelected Rep. Michele Bachmann (R-Minn.) will be commanding a sizable tea party caucus in the House. Republicans made signficant gains in gubernatorial races and state legislative contests, placing the party in a strong position to consolidate power by redrawing congressional districts in key states.
And all this was utterly predictable. With high unemployment persisting, polling had made it clear for months—perhaps over a year—that Obama and the Democrats had backed themselves onto the edge of a cliff. Yet the president and his strategists—David Axelrod, Rahm Emanuel, and others—failed to plot a path to safety. At times, it even appeared they were not exerting themselves fully—such as this past August when the White House did nothing special to prepare for the coming elections.

In his first eighteen months in office, Obama racked up impressive achievements: a stimulus bill that saved or created millions of jobs (though not enough), health care reform legislation that contained significant improvements (though it also included hard-to-understand provisions and eschewed a public option), and a Wall Street reform measure that set up a new consumer financial protection agency (though it did not tighten up the rules of the road sufficiently). But the president, who had presented such a compelling tale as a candidate, allowed Rep. John Boehner (R-Ohio) and Sen. Mitch McConnell (R-Ky.) to outfox and outmaneuver him. The GOP did all it could to block Obama's agenda and then claimed he had not succeeded. Its leaders lied about the stimulus (claiming it had literally produced no new jobs), and they enabled and cheered on tea party critics of health care reform, who decried nonexistent "death panels" and who compared Democratic supporters of the bill to "Nazis." And Obama never fully called them out.

If Obama—the guy with the bully pulpit— fails to define the opposition in clear terms, it will keep on defining him.

In the face of GOP demagoguery, subversion, and obstruction, Obama won legislative battles—his margins in Congress were large enough for that—but he never managed to win the story.
Republican narratives [4] ("socialism," "no new jobs," "too much spending") triumphed and fed the tea party fires, while Obama, staying true to his 2008 vow to transcend partisan wrangling, kept insisting that he could do business with the other side for the common good of the nation. He did occasionally poke the GOPers in the eye for it's drumbeat of "no," but he went back and forth, sometimes denouncing them, sometimes negotiating with them (often for naught). At best, he presented a mixed message. And the results are obvious. The Republican's stark rallying cry (No to Obama) subsumed Obama's balancing act (We Must Work Together and Have Patience, But The Other Side Sometimes Doesn't Really Try).
Now Obama has a tough choice. Does he continue with this approach, even as the Republican caucuses in the House and Senate shift toward the right and greater extremism, or does he recalibrate and set a more confrontational tone? It's true, as the conventional pundits say, that American voters don't like confrontation in Washington. But if Obama—the guy with the bully pulpit—fails to define the opposition in clear terms, it will keep on defining him and his initiatives to their advantage.
This is not just about politics—and winning in 2012. It's about policy. With the Republicans in charge of the House, Obama's accomplishments are in jeopardy. The GOPers may not attempt to repeal the entire health care reform act—though Bachmann and Rep. Marsha Blackburn (R-Tenn.) vowed to do so on election night. But the Republicans can try to limit or restrict funding for the implementation of various provisions of that bill. Ditto for the enacted Wall Street reform legislation and parts of the stimulus package. To protect these and other policy victories, Obama is going to have to engage in divisive battle with the Republicans. (In the Senate, Rand Paul [5] can use a variety of parliamentary rules to bring any and all action to a halt. And if he blocks raising the debt ceiling, he could singlehandedly precipitate a global economic crisis.)
Yet in the days before the elections, Obama was still sending I-can-work-with-them smoke signals. He told [6] the New York Times he was optimistic he could find common cause with Republicans after the elections: "It may be that regardless of what happens after this election, they feel more responsible, either because they didn't do as well as they anticipated, and so the strategy of just saying no to everything and sitting on the sidelines and throwing bombs didn't work for them, or they did reasonably well, in which case the American people are going to be looking to them to offer serious proposals and work with me in a serious way."
In other words, Obama didn't recognize that the tea party-ized GOP, which has striven to block his key initiatives and catered to corporate interests, is not likely to change its inclinations after these elections. In fact, the tea party influence is likely to be stronger, and that means the Republican impulse to obstruct will be more intense. (After that interview became public, a prominent Democratic strategist angrily complained to me: he was signing Democratic fundraising emails that slammed the GOP as implacable opponents to Obama's policies, yet the president was undercutting this message by describing the Rs as reasonable foes.)
Last week, when asked [7] how the president will be able to work with empowered and more conservative congressional Republicans, White House press secretary Robert Gibbs didn't have much to say: "We are going to be in a situation…that will require progress to be made only by working—where that’s possible—only through working together." He didn't acknowledge that Obama would be facing a brick wall of opposition. Moreover, this opposition will have two bedeviling (for the White House) components to it. The newly elected Republicans are more ideologically obdurate than the current band in Congress, and the House leaders are veterans who presumably learned from the excesses of the 1990s, when Newt Gingrich bumbled the job. An opposition with more ideological fervor and more savvy—that's not a good recipe for the White House.
In Obama's first act—as candidate—he effectively sold himself as a pol who could change Washington rancorous ways. In his second act—as president with whopping majorities in the House and Senate—he won the legislative battles with his nuanced tactics but lost the political war to a fierce and blunt opposition. His next act—as a president facing tremendous national problems but challenged by a hostile House—requires a significant rewrite. If he doesn't get it right, there may not be an Act IV.

Tea Partiers: Can You Hear Us Now?

— By Stephanie Mencimer

| Tue Nov. 2, 2010 9:17 PM PDT

George Washington, a tea partier who is fighting the death penalty, from home in Mt Vernon (really!) : Photo: Stephanie MencimerLeaders of the Tea Party Patriots, one of the nation's largest tea party umbrella groups, traveled the country (in a private jet) in the final days before the election to rally the grassroots and get out the vote. "Patriot One" landed at Washington's Dulles Airport Monday night, in time for the group to rest up before planting a Gadsen flag on the grounds of the Capitol Tuesday and hosting an election night party at the nearby Hyatt hotel. The tea party leaders picked a good spot for their soiree: the Hyatt is directly across the street from the hotel House Speaker Nanci Pelosi chose for her election night event. The contrast was pretty striking. While the tea party party had almost a 1:1 tea partier to press ratio, the Democrats apparently kicked out most of the media from their event, preferring to mourn in private. Inside the Hyatt, the tea partiers were happily cheering the Dems' demise. Debbie Dooley, one of TPP's national coordinators, told the gathered crowd, "Welcome to Nancy Pelosi's retirement party."
The event had all the trappings of the Washington establishment—$10 drinks, megatrons, swank hotel. It was decidedly lacking in star power, with local activists having their moment in the sun rather than say, Dick Morris. But there were a few highlights: "George Washington," in full Revolutionary War garb, on hand to talk liberty, pose for pictures, and give all the reporters someone to interview. Ditto for "Captain America," who's become a regular at these DC events. There was a Dartmouth student who made a tea party rap song and other patriotic singers.
The gathered tea partiers cheered the news of each new GOP victory: Marco Rubio in Florida, the defeat of Rep. Alan Grayson (D-Fla.). Occasionally they'd break into chants of "USA! USA!" or "Can you hear us now?" Most of the speakers expressed their intent to ensure that all those newly elected conservatives in Congress remain true to the cause. National coordinator Mark Meckler shouted out at one point, "Anybody committed to the movement for the long term?" To which many responded with raised fists and cheers. There was talk of a 40-year plan, indoctrination sessions for incoming freshmen in Congress, and veiled threats to candidates elected with the help of the movement (who might not stay true to tea party principles).
Kerry Scott of the Alexandria, Virginia, tea party said, "I think people are very leery" of being part of the establishment now that their candidates have won. "We're going to do everything in our power to keep the pressure on them. We don't want them to get too comfortable." Scott also suggested that the tea party might change its focus to local issues now that the election is over, out of concern that it won't be able to influence the national debate that much. I asked whether activists worried that they might have trouble keeping people motivated and involved once Congress is in Republican hands. Scott admitted that's a real concern: "I have 200 people on my email list. Only 20 show up for a meeting."
One tea partier at the victory party thought that there was one subgroup of activists who might become more engaged after the election: disabled conservatives. Hard to believe, perhaps, but there is a fairly good-sized contingent of tea party activists in that camp, and Melissa Ortiz is one of them. Co-chair of the Can-Do Conservatives—whose motto is "A hand up, not a hand out!"—Ortiz has been organizing a small army of wheelchair users like herself and other disabled folks to support the movement. She suspects that as health care reform really kicks in, and people start to see "rationing of care or lack of care all together," the normally liberal disabled community will start to get angry. "We've only just begun to fight," Ortiz said, as she sat with her service dog Lucy. She noted that it's not surprising that the disabled would be drawn to the tea party, which is all about personal responsibility and "being able to make your own choices." That, she added, is what most disabled people want: "I don't need the government to take care of me." Currently unemployed and working some freelance jobs, Ortiz is one of the few tea party activists I've met who wants a job on the Hill after the election. I suspect there will be more of them on Wednesday.