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Jim Malone | Washington 23 December 2010

President Barack Obama arrives at Hickam Air Force base in Honolulu, Hawaii, for a holiday vacation, Dec. 23, 2010 本科

President Barack Obama arrives at Hickam Air Force base in Honolulu, Hawaii, for a holiday vacation, Dec. 23, 2010

In U.S. politics, both sides in the ongoing domestic policy debates are taking a break over the Christmas holiday, following an unexpectedly productive final session of the outgoing Congress. When they return in January they will face the new political reality of Republicans controlling the House of Representatives and having an increased minority in the Senate.

What a difference a few weeks makes in President Obama's political fortunes. Shortly after the Republican rout in the November midterm congressional elections, Obama acknowledged he and his fellow Democrats got a shellacking at the polls.

It was a much more upbeat President Obama, however, who spoke to reporters at the White House after a productive so-called lame duck session of Congress that included dozens of Democrats who were defeated in November.

"If there is any lesson to draw from these past few weeks, it is that we are not doomed to endless gridlock," said Obama. "We have shown in the wake of the November elections that we have the capacity not only to make progress, but to make progress together. And I am not naïve. I know there will be tough fights in the months ahead. But my hope heading into the New Year is that we can continue to heed the message of the American people and hold to a spirit of common purpose in 2011 and beyond."

The list of compromise agreements includes extending tax cuts for all Americans first approved by President George W. Bush, ratification of a new nuclear arms treaty with Russia, and ending a long-standing policy that prevents homosexuals from openly serving in the U.S. military.

Not everyone was happy. Republican Senator Lindsey Graham of South Carolina complained that Democrats rammed through a number of measures in the waning days of the session, especially the law that overturns the "Don't ask, don't tell" policy that had barred gays and lesbians from openly serving in the armed forces.

"To those who are pushing this process, it is not appreciated," said Graham. "It is not appreciated by your fellow senators and I do no think it is going to be appreciated by the men and women who are going to have to live under this kind of change."

Democrats were eager to celebrate their legislative victories, fully aware that they will lose their House majority in January.

Maryland Representative Steny Hoyer is the number-two ranking Democrat in the House. He said both parties in Congress were able to find common ground once the heat of the November election faded.

"I think the fact that the politics are somewhat over," said Hoyer. "They are never fully over, but the election is not facing us and people were prepared to come together and work together for progress."

Perhaps the most important moment came when the president agreed to a compromise with Republicans on extending the Bush era tax cuts for all Americans, even the very wealthy. As a presidential candidate, Obama had promised to let the tax cuts for the wealthy expire, and his change of heart angered liberal Democrats.

Tom DeFrank is a longtime observer of U.S. politics and Washington Bureau Chief for the New York Daily News. He said, "Had Obama not been able to cut this deal, he would have looked helpless. He at least lives to fight another day now. And I believe there are some, and I am one of them, who believe that if Obama somehow finds a way to get reelected in 2012, we will all be saying that the seeds of that comeback began with this (tax) deal."

The president's willingness to compromise on the tax deal and his ability to win at least some Republican support for the START Treaty with Russia and repeal of the military's "Don't ask, don't tell" policy is a sign of a political shift to the center, said political analyst Richard Wolffe.

"The middle ground, these independent voters who do not like partisan politics, are his group," said Wolffe. "They backed him in 2008 and they turned strongly against Democrats in 2010. He has got to win those back if he is going to get reelected, so speaking to them, as well as obviously to Democrats, is very important."

Analysts do question how long this newfound willingness to compromise will last, especially given the new political reality in Washington come January when Republicans take control of the House and increase their minority in the Senate.

Some newly elected Republicans are eager for a showdown with the president over the federal budget, spurred on by conservative Tea Party activists who helped elect them in November.

Political strategist Mark Penn, a former adviser to former president Bill Clinton, expects Obama to continue to position himself as a political centrist as he looks toward his own re-election battle in 2012.

"The president, I think, in moving to the center, has got to be able to say to the left and the right, that 'look, the voters want to see some accomplishments here and that if we fail to bring accomplishments, no one is going to be the winner here.'"

The first big test for President Obama in the New Year will come later in January when he delivers the annual State of Union Address to a joint session of Congress.